The government is testing the ground in the face of rising rents

The government is testing the ground in the face of rising rents
Written by madishthestylebar

How to curb rising rents? The government consulted real estate players on Wednesday on this sensitive issue which affects a heavy expenditure constraint on the part of the French, in the midst of an inflationary surge.

With purchasing power emerging as the first priority of the French, the subject is crucial for the government of Elisabeth Borne, which must imperatively win the legislative elections on June 12 and 19 to stay in place. Because inflation, notably under the effect of the war in Ukraine, is soaring to levels not seen for thirty years (+5.2% over one year for consumer prices).

Costly emergency measures

The executive has so far responded with emergency measures, often costly: “middle class allowance”, energy check, blocking of gas prices… There remains the cost of housing, one of the heaviest and caught up expense items in turn by rising prices.

In the first quarter, the reference rent index (IRL), which sets the annual increase authorized for landlords, jumped to 2.48%, a level not seen since 2008. Indexed to the evolution of prices at the consumption (excluding tobacco and rents) over the last 12 months, it will therefore continue to increase if nothing is done.

No rent freeze

On Wednesday, it was this IRL that was at the heart of discussions between representatives of real estate professionals and ministers Bruno Le Maire (Economy) and Amélie de Montchalin (Ecological transition), according to several participants interviewed by AFP. It was above all “an exercise in consultation, where the goal was to let the actors speak”, underlines one in the entourage of Montchalin, whose attributions include housing. The ideas expressed should help the Prime Minister to decide with a view to a bill on purchasing power which must be presented on June 29.

The proposal to freeze rents, put forward by consumer and tenant associations but rejected by professionals, seems to have been discarded. “Very clearly, they told us that they were not going towards a total freeze on rents because they are aware of the weight that this will have on landlords”, explained to AFP the president of the Social Union. for housing (USH), Emmanuelle Cosse, who represented social landlords. “Everyone agreed that the rent freeze was not good,” also testified Danielle Dubrac, president of the union of professionals United.

Lots of ideas

The participants nevertheless put forward ideas to make the rise in the IRL less painful: no longer reassess it for a year from this summer, smooth it by taking into account the average index of the last four quarters, or reform its method of calculation to exclude energy prices, which contribute to accelerating inflation. Without any solution being preferred for the time being.

On the government side, it is emphasized that the actors were polled on the purchasing power of tenants, but also on the need to support the construction of housing in order to lower prices. This measure, rather focused on the medium term, is a constant claim of the Federation of real estate developers.

The USH also called for a revaluation of housing aid (APL), trimmed during Emmanuel Macron’s first term, so as not to undermine the financial capacity of social landlords to renovate buildings. A request also made by the Abbé-Pierre Foundation (not present at the meeting), for which the increase in APL and social minima would make it possible to target the households most in difficulty.

Thursday afternoon events

The meeting will be quickly followed by discussions with other housing stakeholders, such as associations for the defense of tenants and the fight against poor housing.

The most marked on the left, such as Droit au Logement (DAL), have already called for demonstrations on Thursday afternoon to demand strong measures: freezing rents, increasing APL, stopping evictions…

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