Increasing the private rental stock: the absolute priority of Valérie Létard, Minister of Housing

During the HLM Congress which took place from September 24 to 26, the new Minister of Housing, Valérie Létard, warned that, despite all her determination, she did not have a magic wand in the face of the housing crisis. Increasing the supply of housing in the private rental stock should nevertheless constitute its very first priority, insists our columnist Henry Buzy-Cazaux, president of the Institute of Real Estate Services Management.

The new Minister of Housing and Urban Renewal has her work cut out for her. We also know that she will hardly have any butter to spread and she is delicately beginning to warn the community of housing stakeholders. His metaphors from the speeches at the HLM Congress which has just ended were clear: no magic wand, but a pilgrim’s staff, that is to say nothing other than his conviction and his energy in the face of a drying up of public finances finally revealed. It will be necessary to distinguish the priorities and major actions to be carried out for the benefit of these priority areas. Two market segments are more affected than all the others, first-time ownership and rental investment. In existing housing, which is not directly managed by financial or fiscal measures as is new housing, in short, much more left to its own devices, the observation is just as overwhelming: a halving of the number of operations .

Relaunching first-time homeownership through a booster is beyond the means: let’s talk about the measure presented by Gabriel Attal during the legislative campaign, the abolition of transfer rights for payment for households making a first acquisition of less than €250,000, which would cost 8 billion euros, or the deductibility of loan interest, which would cost the same over five budgetary years, or a zero-interest loan for the existing one, which would weigh no less than two or three billion, nothing is feasible in the current context, whether we like it or not. In short, for this market, two hopes, the fall in prices and above all a view of the world financial markets on France which spares us a rise in rates, the moderation at work constituting the best news for young borrowers. Public action will undoubtedly not go further, and this requires controlling spending. And whatever anyone says, this period will not see the great return of first-time buyers: the banks, in fact more relaxed with regard to private real estate, require levels of personal contribution which in fact exclude first-time buyers, a significant fraction of the population. Besides, they are not wrong and the past, with
100% and 110% funding, was not healthy.

HCSF rules are unsuitable for rental investors

Except that this structural, rather than cyclical, reduction in first-time home ownership has a consequence: the postponement of demand for rentals, which are lacking. This also results in tensions on rents, which even supervision where it is decided cannot correct: we will recall that this mechanism starts from the observation of market values ​​and that the median reference rents
are calculated based on the observed reality. Enhancing the rental supply by boosting household investment is an absolute priority. Two levers, the criteria of the High Financial Stability Council, and the nationalization of taxation.

The first subject has now been passed over in silence, since the deputy Lionel Causse, then president of the National Housing Council, failed to reform its composition and its functioning so that his decisions gain in pragmatism and are not disconnected from reality. potential risk or housing needs. Its failure is also relative: the HCSF has integrated into the circle of its experts, without fanfare, an economist specializing in real estate, Ingrid Nappi, professor at the École des Ponts, from whom we can expect that it is both guardian of economic and banking orthodoxy, and shares the awareness that the market must not be paralyzed by the prudential approach. It must be said and reiterated that the design of the HCSF is unsuitable for investors : stricto sensu banks can no longer consider future rental income as non-existent when assessing the solvency of a candidate for investment! Yet this is the case. It is not the rise in rates – investors deduct them for tax purposes – which reduced the proportion of investors in old property from 20% to around 10% in two years, it is the restrictive criterion imposed on banks. From now on, they can only finance these households by using the 20% of exemption files granted to them, reserved for their most loyal customers or the wealthiest profiles.

A tax project

And then there is the tax project. We can understand that the promoters are demanding an extension of the Pinel system, but the probability that they will obtain it is reduced, even very reduced. Previously, they joined forces with a collective demand of a different nature: in return for the end of all tax loopholes, a single common law depreciation system, not subject to questioning in each finance law, open to investments in new and old buildings subject to work, particularly the environment, with two variables, energy efficiency, and the level of rent. Work to improve the ecological quality of the property and below-market rents would thus give rise to accelerated depreciation. Of course, as with any business investment, operating expenses would be fully deductible. Logically, the
Taxation of the capital gain on sale will be carried out according to normal rules: for fully depreciated housing, taxation will be calculated without reduction, but with exemptions in the event of rental reuse, for example. Another interest of this innovation lies in…the innovation itself: it is necessary to surprise investors, more than to give them a high return. A tax break will revive the investment market without delay. It will be more effective than repeating the same recipes.

Finally, we must carry out a major information campaign for landlords on rental security. The average knowledge of individual investors about existing tools, Visale and private guarantees, is very low. Legal recourse against unpaid situations is also poorly understood. We know that the Kasbarian law strengthened them, without further details. The consequences of supervision must also be played down: the system limits excesses but does not reduce performance. And then there is the rental ban schedule : another campaign must provide information on solutions to get households out of the psychosis of work obligations, in particular by explaining what is at least possible in private areas. Madame Létard has discernment. When choosing the most economical sites and the best
report to reactivate the market and quickly provide housing solutions to the French, it will identify
private rental investment as a decisive and timely path.