Paris

The housing situation is contrasted in the city of Paris, and more broadly at the scale of Greater Paris (the metropolitan area, institutionalized in 2016).

Housing construction has more than doubled in the Greater Paris area over the last decade (23,687 units permitted in 2008, 48,580 in 2017). Through a complex model of housing governance, the French State and the Ile de France Region have played a key role in this dynamic by defining and imposing (to the related local authorities) an objective of constructing 70,000 units per year at the regional scale (Ile de France), including 36,000 units in the metropolitan area. These objectives have been reached and surpassed since 2016 at both scales.

Allocation of social housing stock

The portion of social housing in the total number of main residences is also increasing in the Greater Paris, boosted by the law SRU (Solidarity and urban renewal act). Despite an inequal allocation of social housing stock in the cities comprising the metropolitan area, the average percentage corresponds more or less to the public objective (25%). Even in Paris’s city centre, social housing construction is increasing including highly social ones.

At the same time, the growth of the demographic seems under control: the number of inhabitants in the metropolitan area has been stable for 20 years (around 7 million). This number is even slightly decreasing in the city of Paris, according to the most recent demographic statistics (-45,000 inhabitants from 2011 to 2016).

Epicenter of the French housing crisis

Nevertheless, Paris is the epicenter of the French housing crisis. One can see increased financial efforts to own or rent a flat in central areas, while prices are reaching historical levels (+273% between 1996 and 2018). To get an idea of the specificity in the area of Paris, the Greater Paris area is 75% more expensive than the following metropolitan area in terms of price per square metre (7,000 euros in 2018 vs 4,000 euros in Nice).

In this context, some upcoming changes could impact the investment landscape in both the public and private housing sectors shortly. At the national level, the last law on housing (the Elan act) could have a negative impact on the traditional social housing financing system. And regarding the private sector, one can foresee the renewal of interest of institutional investors or the emergence of new actors.

Paris researchers

Antoine Guironnet, Francesca Artioli, Julie Pollard, Marco Cremaschi, Nordine Kireche, Patrick Le Galès and Pierre-Henri Bono