How France Engineered Its Housing Crisis

Each year, demographic needs would require the construction of approximately 500,000 new housing units to keep pace with population growth, changes in family structures and the renewal of the existing housing stock.

Yet France is now far from this target. Housing starts have reached their lowest level since the 1950s, while building permits continue to decline. The crisis no longer affects only major metropolitan areas; it has now spread to medium-sized cities and suburban areas.

A Gridlocked Market

In practical terms, this shortage is reflected in widespread strain across the entire market. There is an ever-increasing number of prospective renters competing for the same housing unit, sales prices remain high despite the slowdown in transactions and waiting lists for public housing continue to grow.

In some college towns, dozens of applications are submitted for a single available apartment, illustrating the extent of the imbalance between supply and demand. In Paris, real estate agencies are sounding the alarm. For example, the Foncia network reports having only 70 units available for rent.

One of the most concerning trends is the gradual withdrawal of private investors. For several decades, they were one of the main drivers of the rental supply. Today, many of them are choosing to sell their properties rather than continue to rent them out.

The private rental stock, which accounts for nearly a quarter of French housing, is thus ceasing to grow even as demand increases. Tenants are giving up on moving, and the system has completely ground to a halt.

The rise in interest rates, which began in 2022, has certainly severely eroded the profitability of real estate investments by increasing the cost of credit and reducing households’ borrowing capacity. But industry professionals point out that this explanation is no longer sufficient. Even though rates have stabilized, investors are not returning to the market – a sign that the reasons for their withdrawal run deeper.

Among these causes is real estate taxation, regularly criticized as one of the heaviest in Europe. The continuous rise in property tax, taxation of rental income, social security contributions, capital gains tax and the growing cost of regulatory obligations significantly reduce the economic appeal of rental investments. For many landlords, the net return no longer compensates for the risks involved.

Green Ideology and Normative Obsession

The Energy Performance Certificate (EPC) now plays a central role in this debate. Designed to accelerate the energy transition of the housing stock, it is gradually banning the rental of the most energy-inefficient homes. As of 1 January 2025, homes classified as G can no longer be offered for rent, while homes classified as F and then E will be phased out over the coming years.

Industry organizations estimate that the reform has caused a sharp reduction in the rental supply. It is estimated that approximately 1.6 million homes are currently rated F or G, a large portion of which are owned by small landlords. For many of them, the required renovations represent investments of tens of thousands of euros – often impossible to finance. Unable to carry out these renovations, some prefer to remove their properties from the rental market or sell them. This trend directly contributes to the decline in available supply.

The Paris City Council’s decision, backed by the city’s new Socialist mayor, Emmanuel Grégoire, to nearly double the tax on vacant homes from 1 January 2027 risks exacerbating the situation even further.

The difficulties encountered with the Energy Performance Certificate have, in fact, led the government itself to revise its calculation method. Starting in 2026, a change in the assessment method will allow nearly 700,000 homes to automatically be removed from categories F and G without the required renovations being carried out. This revision constitutes an implicit admission of the flaws in the initial system – though no one dares to openly criticize it for fear of being seen as a reactionary hostile to the climate cause.

Landlords also criticize a legal environment that has become particularly unfavorable. The 2023 law aimed at combating squatting has strengthened criminal penalties against illegal occupations, but evictions remain difficult to obtain. Eviction proceedings are lengthy and costly, both for squatters and for tenants who fail to pay rent.

Between court delays, the winter moratorium, and collection difficulties, a landlord may find themselves deprived of income for many months with no guarantee of recovering the amounts owed. This legal uncertainty is now one of the main barriers to rental investment, particularly for small landlords who lack the financial resources to absorb such losses.

Beyond these specific challenges, industry professionals point to a continuous increase in regulatory standards that significantly drives up construction costs. Environmental requirements, the growing complexity of zoning documents, the rise in legal challenges and administrative delays all contribute to slowing down projects and increasing their final cost. Under these conditions, developers are building less, prices are rising and homeownership is becoming increasingly difficult.

Toward a Concrete-Covered, Soulless France

In response to this crisis, the government has chosen to prioritize a policy aimed at reviving the construction sector. The bill sponsored by Housing Minister Vincent Jeanbrun aims to simplify administrative procedures and relax several urban planning regulations in order to accelerate housing production. For the government, the gravity of the situation justifies reducing the constraints that currently hinder real estate projects.

However, this approach is meeting with strong reservations from the heritage community. In a widely noted op-ed, heritage advocate Stéphane Bern warned against the risk of sacrificing architectural quality and the built heritage – distinctively French characteristics – in the name of a quantitative urgency. He fears that weakening heritage protections will lead to the gradual homogenization of historic city centers and the disappearance of many elements that define the identity of French cities – a key draw for visitors from around the world.

As a consequence of the government’s negligence regarding housing, the goal of building more in an effort to urgently catch up risks causing irreversible damage to architectural heritage.

The housing crisis thus illustrates the contradictions in French public policy. On the one hand, the government pursues seemingly generous goals of ecological transition and tenant protection. On the other hand, the accumulation of these constraints ultimately produces the opposite effect of what is intended: it discourages investors, reduces the available supply and exacerbates the shortage.

In this sector, as in so many others, the crisis is not an inevitable fate; it is the product of harmful policies designed to satisfy ideological obsessions, championed by a political class steeped in socialist and environmentalist views that share a common disregard for reality and for people.