Public Policy Constraints Deepen France's Housing Crisis, Experts Warn

France is facing an acute housing crisis made worse by public policy barriers and rising inflation, which have significantly increased construction costs and halted new housing developments. Young professionals, in particular, are trapped in the rental market due to their inability to afford home purchases, leading to rental shortages and higher prices, especially for students and new tenants.

Policies aimed at environmental goals, such as the zero net land artificialization (ZAN) target from the Climate and Resilience Law, have impeded building projects in rural and suburban areas despite rising demand. Additionally, the SRU law's social housing quotas mandate that a portion of new developments be affordable housing, resulting in an estimated 10-15% price inflation per square meter for new buyers. This inflates costs further and shifts the financial burden onto individuals purchasing homes.

The problem is compounded by restrictions preventing rental of small, energy-inefficient properties, with rental bans on poorly rated energy performance diagnostics (DPE) removing many units from the market. In cities like Paris, a substantial number of small apartments remain vacant due to these regulations.

Rental market imbalances discourage landlords from offering properties due to weak tenant default protections and lengthy eviction procedures, leading to more selective renting practices. Critics also argue that mortgage interest rate hikes tie to fiscal mismanagement, which exacerbates affordability issues.

Proposed remedies focus on easing construction norms, curbing excessive mayoral power to block development projects, and revising social housing policies to improve market liquidity. These adjustments aim to balance legitimate ecological and social objectives with urgent housing accessibility and affordability needs.

Experts agree that while inflation and construction costs are influenced by broader economic factors, policy constraints play a pivotal role in restricting housing supply and increasing prices. Without reform, the housing crisis is expected to persist, impacting households across France.