Does rent control really benefit households? Has it, as its critics predicted, restricted rental supply in markets where this was already failing to meet demand? A Ministry of Housing evaluation report was expected at the end of 2023. It won't actually be released until... 2026.
However, based on official data and statistics supplied by various private players, Le Monde has sketched out an overview of the situation in five major cities with rent ceilings: Paris, Lille, Lyon, Bordeaux and Montpellier.
An initial observation is that the introduction of the regulation corresponds, more or less, with a slowdown in the rise in median rent per square meter in three cities. In Paris, where the mechanism was put in place in 2015, then suspended in 2017, "we saw rents rise very quickly when the first phase of the cap was canceled," recalled Manuel Domergue, director of studies at the Fondation Abbé Pierre charitable organization. As soon as it was reinstated in 2019, "they began to stagnate or fall again," he added.
The same slowdown in rent inflation can be seen in Lille, where the plan, also revoked in 2017, has been put in force again since 2020, as well as in Lyon, which adopted its framework in 2021.
For other cities, it's difficult to judge: Bordeaux only introduced the system in the summer of 2022, and data for 2023 are not yet available from the local rent monitoring body. In Montpellier, prices had already been stable since 2020, that is, two years before the introduction of the framework.
Where observed, the slowdown in increases is probably due as much to the regulation as to small changes in the rent reference index (IRL). "In high-demand areas, accelerations and slumps in rent levels are often strongly linked to the IRL," pointed out Clément Pavard, studies and observation project manager at the National Agency for Information on Housing (ANIL).
Calculated each quarter by the National Institute of Statistics and Economic Studies (INSEE) on the basis of inflation, the evolution of this index constitutes the maximum level of annual rent increase that a landlord can apply. In 2020 and 2021, it often remained below 1% and sometimes even came close to 0%, due to low inflation. Then, since mid-2022, the maximum variation in rents has been frozen at 3.50% by the "rent shield," a rate lower than the increase in consumer prices.
Nevertheless, the new regulations seem to have eliminated, or almost eliminated, extreme rents. In Paris, "over the past 10 years, prices for a studio apartment have been as high as €45 per square meter," said Geneviève Prandi, director of the Paris Area Rent Observatory (OLAP). The new reference rents, based in part on the number of rooms in the property, have had the effect of evening out this fluctuation.
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