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Housing: building more, helping young people and saving money, the government unveils its strategy

Ⓒ AFP – PASCAL GUYOT – | Photo taken on September 20, 2017 from a sign indicating “Studio à Louer” on the facade of a university residence in the city of Montpellier.

After weeks of partial announcements, the government unveiled on Wednesday its “strategy” for housing made of shock tax measures on the transfer of land, more targeted state aid and cuts in the resources of HLM agencies.

Jacques Mézard and his Secretary of State Julien Denormandie announced a drain on the resources of the HLM organizations, in order to “build more, better and cheaper” and “protect the most fragile” which house 10 million people, one-third of whom have resources below the poverty line.

Controversial, the 5-month monthly drop in personal housing assistance (APL), which will come into force on 1 October, will be complemented by a larger decline in the social sector, which is expected to generate “1.4 billion savings” and will be compensated for the tenants by a reduction in rents imposed on social landlords.

This “will jeopardize the financial equilibrium of HLM organizations, thus engaging the guarantees of local authorities”, reacted social landlords. By cutting their resources by “three-quarters of their investment capacity in the production of new housing”, this measure “threatens the 250,000 jobs that the HLM organizations generate in the building”.

Ⓒ AFP – PASCAL PAVANI – | Building under construction in Borderouge, Toulouse, September 20, 2017.

For HLM organizations, their 2.2 million tenant households benefiting from the PLA, social housing applicants and local authorities will be the “big losers” with the construction industry.

“The efforts are only asked of our most fragile citizens,” insists the association of defense of the consumers CLCV. “There is a risk of creating new homeless people,” said Christophe Robert, spokesman for the foundation Abbé Pierre, interrogated by AFP, while the National Confederation of Housing (CNL) said “No to the break of the century! “.

In order to promote “mobility”, the shortage of housing in tight zones hinders employment, the government intends “to liberate the construction, to lift the brakes, to release the land”.

A tax allowance will be granted on real estate gains for the sale of land in tense areas for three years: 100% if the sale allows the construction of social housing, 85% for intermediate housing, and 70% for housing free housing.

– Contrast reactions –

And two public subsidies, the zero-interest loan (PTZ) granted to households accessing the property and the tax benefit “Pinel”, granted to individuals purchasing housing to rent, will be “extended for four years”, but mainly refocused on tense areas.

To “unblock” construction, appeals against building permits will have to be “motivated as soon as they are filed”, and abusive procedures will be “more sanctioned”.

And no “new technical standard” will emerge during the five-year period, which will not concern “security issues”, while “100% of new housing will henceforth have to be evolutionary” – made easily accessible to the disabled – and not more adapted to the disability (only 10% will be).

The reactions of the professionals were contrasted: the refocusing of public subsidies will “break the dynamics of growth of housing regained two years and consequently to destroy jobs”, estimated the developers-developers (LCA-FFB), while CEO of the Nexity group predicted a “sharp decline in construction in the periurban zone”, of “50,000 housing units within two years”.

On the other hand, the French Building Federation (FFB) welcomed a “very positive framework”, while declaring to wait for the “detail of the measures” to pronounce itself, like the Federation of property developers (FPI), satisfied to see the ” real blocking points “.

In addition, 80,000 housing units for active students and young people will be built over the five-year period, and a “mobility lease for 1 to 10 months” will be created.

For Jean-Claude Driant, a professor at the Ecole d’urbanisme de Paris and a specialist in housing policy, “these measures, except for the APL, go in the right direction but the supply shock is out of reach.”

Ⓒ AFP – PASCAL GUYOT – | University residence in Montpellier on September 20th. 80,000 homes for students and young active will be built in France

“We are still on adjustments, not reforms – and there is nothing on the private park,” notes the researcher at the OFCE Pierre Madec.

Budgetary measures expected on 27 September will complement these announcements. Housing should make a major contribution to the savings of € 16 billion in the 2018 Budget Bill.

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