“It was, for me, a commitment to the stewardship campaign for the private rental market.“With rent control implemented in Bordeaux, Environmental Mayor Pierre Hormec finally wants something to flesh out his work on housing. On June 23, a city council member announced, during a press conference, the launch of rent control from July 15, 2022. Any new lease entered into as of This date should apply prices per square meter as defined by Bordeaux Metropole and validated by the county. For residences that will see their rents drop, elected officials are promoting regulations that will “Improving the quality and accessibility of the private marketIt was also introduced by Alain Anziani, President of the capital. But as in other cities where the device was launched, it was denounced by the opposition and some owners.
How are reference prices calculated?
The Nouvelle-Aquitaine Prefecture published on June 22, 2022, a decree establishing the level of average rents in Bordeaux. This law endorses the launch of the rent control policy, which environmentalists and elected leftists have desired for many years to deal with the high prices in the rental stock. To define new regulatory standards, Bordeaux Metropole – which is leading the project even if it is only applied to the city center for the time being – was able to rely on the local Observatory of Rents Europe (Urban Planning Agency of Bordeaux-Aquitaine).
The organization, which has been documenting the development of rental stock for more than 20 years in the capital, is tasked with identifying homogeneous geographical sectors in terms of housing classification. Thus four types of areas are identified in Bordeaux, ranging from those in which dwellings mainly contain large rooftops (Z1), to those with the smallest dwellings (Z4). Each area was given a reference price per square meter according to five criteria: geographical sector location, year of construction, number of rooms, type of dwelling (apartment or house) and type of rent (empty or furnished).
Click on the map (credits: Bordeaux Metropole).
Thus, the godmother refers to four reference prices, for example:
- In the zone 1: 18 EUR / m2 per month for an empty T1 building built before 1946.
- In the zone 2: 14 EUR / m2 per month for a furnished three-room house built after 1990.
- In Zone 3: 11.7 EUR / m2 per month for an empty one-bedroom apartment from the 80s.
- In the zone 4: 12.2 EUR / m2 per month for a furnished three-room apartment built after 1990.
For example, while today, one-bedroom apartments of 19 square meters are rented for more than 500 euros in the Saint-Pierre area of Bordeaux, it cannot exceed 420 euros per month according to management procedures, according to our calculations.
To be able to rent out their property, owners must not exceed 20% reference rates, with some exceptions. In the event of non-compliance and recourse by the tenant, the offenders are subject to a fine of 5,000 euros for natural persons and 15,000 euros for legal persons. A platform will be open from 5 July for the reference prices set according to each region and according to all possible property types in Bordeaux.
What dwellings are affected mainly?
While Bordeaux Metropole remains particularly attractive to businesses, employees as well as students, the high prices over the past 10 years have made the rental property market particularly tight. “Housing is still too expensive in Bordeaux Metropole and we don’t have land availableCEO, Alain Anziani.Inflation rises again, and purchasing power decreases. Bordeaux ranks fifth in terms of rents in France.“According to Europe, the average rent in Bordeaux is 12.7 euros per square metre. Not the Lyon level, which is 17 euros according to Seliger, but the city of Gironde only close to it.
Over the past 10 years, it has been housing T1 and T2 in particular that has experienced strong inflation. Elected officials say rent control is primarily for them. “Small dwellings of less than 20 square meters are the most affected“But the measure, on the contrary, will not reduce the competition between the candidates for the lease. Especially since it will be necessary to wait several years before drawing conclusions because only lease contracts will be subject to the framework. The leases concluded from July 15, 2022.”The system will get stronger over the years, we will have to wait for lease renewals to see the effects‘,” explains Stefan Pfeiffer, MP with Special Responsibility for the Housing and Housing Public Service.
Why is the administration severely criticized by the opposition and its owners?
On the right, the opposition is taking action.From a managed economy and against a market economy“.”That the law allows, in the field of housing, a framework, I support it. It is called social housing, in which the rent ceiling is fixed, and the legislator has also provided for the rental investment scheme. Anyone can take advantage of a tax advantage once they rent it to someone via the Controlled Rentals appsays Nicholas Florian, leader of the municipal opposition group Bordeaux Ensemble.
Like the former mayor of Bordeaux, the landlords have stood against this new legal framework. In November 2021, representatives appealed to the Council of State arguing that the measure could not be applied in Bordeaux because the market was considered properly regulated. Their request has not been validated by the Supreme Court. Then he warned the landlords of the difficulties that they might encounter, in the case of rent regulation, in carrying out renovation work in the rented housing. In this case, the quality of rental inventory will decrease.
To counter this adverse effect, Bordeaux Métropole has introduced a rental permit with effect from 1 January 2022. Under these regulations, any new housing offered on the market must meet health conditions in order to be rented. In fact, only six residence permits have been denied since the beginning of the year according to figures from the capital.
Another negative effect is the excessive restrictions that would burden the owners that would motivate them to move towards seasonal furnished rentals. In other words, seeking income by renting via AirBnb. But in Bordeaux, any housing that leaves the classic private rental stock, with a year-round lease, must be offset on a seasonal rental platform by offering it to the classic rental market for another residence in the same neighborhood. Weight requirement which should limit housing leakage.
Currently, the rent control measure is only effective in Bordeaux, and if other municipalities in the capital wish to implement it, they will also have to adopt these barrier measures to avoid adverse effects. The mayor of Bordeaux is hoping, however, that this measure will include landlords to make private rental growth more palatable. “We want to show that the public authorities, the city hall and the metropolis are concerned about having a responsible and regulated rental price. It is an educational and symbolic virtue‘, he remembers.