Rents in Paris: the Council of State revokes their supervision, a boon for owners?

The Council of State has just rejected an appeal from the government against the annulment of a decree of June 3, 2020 regulating rents in Paris. What can landlords expect from this decision?

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Established by the Elan law of 2019 in tense areas, where the demand for housing is much higher than the supply, the experiment in rent control, which will end in 2026, weighs on the profitability of the investment rental. The National Union of Real Estate Owners (Unpi) therefore did not hesitate to shout “victory” after the publication, on November 18, of a decision by the Council of State canceling the rent control order which was taken on June 3, 2020 by the prefect of Paris for the period from July 1, 2020 to June 30, 2021. The rent control orders are in fact issued annually.

But what “victory” can Parisian owners exactly take advantage of this? A reminder of the facts is necessary. Denouncing a calculation “opaque, unscientific and therefore very questionable” rent ceilings not to be exceeded in the capital, Unpi and the National Real Estate Federation (Fnaim) had asked the courts to annul the decree of June 3, 2020. They had won their case in October 2023 but the Ministry of Ecological Transition, which then oversaw that of Housing, filed an appeal in December 2023.

A decision on the form, not on the substance of rent control

It is this appeal that the Council of State rejected on Monday November 18, therefore confirming the annulment of the decree governing rents in Paris between July 1, 2020 and June 30, 2021. On the grounds that this decree is based on “A old administrative division of the city of Paris (in 14 zones bringing together 80 neighborhoods) which no longer corresponds to the current reality of the Parisian rental market”explains to Capital Loïc Cantin, president of Fnaim. “The distribution of the 80 neighborhoods in the 14 zones covered by the decree does not make it possible to form homogeneous zones in terms of rent levels”continues Maître Manon Bellin, of the GCMB Avocats firm. In the Grandes-Carrières district, for example, in the 18th arrondissement, the rent not to exceed is 29.5 euros per square meter, whether the accommodation is located near the popular Porte de Clignancourt district or not far from the very chic Montmartre. Another example, cited by Maître Bellin, “the border between the Marais and Strasbourg-Saint Denis”an upscale neighborhood for the first and much less so for the second, separated only by a street.

“It is not the rent control which is called into question by the decision of the Council of State. This is his methodology”specifies Loïc Cantin. “The decision of the Council of State concerns on form, not on substance”adds the office of the Minister of Housing, Valérie Létard. If you are an owner-lessor of accommodation in Paris, do not expect the end of rent controls to be decreed any time soon! Nor to receive, from the State and even less from your tenants, compensation for the shortfall resulting from rent control between July 1, 2020 and June 30, 2021…

The Minister of Housing wishes to evaluate rent control

“The decision of the Council of State will not have no financial consequences for owners»confirms Unpi to Capital. The association, however, sees in this decision a “little kick against rent control”to the extent that the methodology of this system, in Paris and in the other large metropolises which are experimenting with it, will undoubtedly have to be reviewed if the Paris administrative court of appeal confirms the decision of the Council of State, which remanded the case. “The territorial divisions (on which the system is based) must be reviewed”adds Loïc Cantin. “Landlords could obtain a review of the calculation method” of rent ceilings, agrees Maître Bellin.

The Minister of Housing “will request, in June 2025, the initiation of a evaluation mission of the rent control experimentin order to have a clear and objective vision of the system” and to decide whether or not to continue it after 2026, his office tells Capital.