Rent Control Experiment Intensifies in 69 Cities: What's the Deal?
Property management: Is the end of rental management soon approaching?
By Christine Lejoux Head of Real Estate Service Published on , last modified at
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With the rent control permit and the ban on renting energy-gobbling properties, rent control has become a major obstacle for property investment. As predicted by the 2018 Elan law, the rent control experiment is underway in 69 cities in high-demand areas, battered by skyrocketing housing demand. These cities include Paris, Lille, Lyon, Villeurbanne, Montpellier, Bordeaux, the Seine-Saint-Denis intercommunalities of Plaine Commune and Est Ensemble, and some Basque Country communes.
This trial is expected to end in November 2026, but a government decision on whether to extend it or not is still pending. A mission led by François Bayrou, entrusted to academics Gabrielle Fack and Guillaume Chapelle, has just started to evaluate its effectiveness. The National Assembly's Economic Affairs Committee launched a separate evaluation mission last week, set to report findings in September.
Will Rent Control Get the Boot?
Several local authorities and the Foundation for Housing the Disadvantaged (formerly the Abbé Pierre Foundation) have voiced concerns that the "durability" of this public policy is at risk, as no extension announcement has come from the government yet. However, the mayors of Paris, Lille, Lyon, Annecy, and the Basque Country metropolitan area are banding together to push for the continuation of rent control, claiming its benefits are obvious.
According to a study by the Foundation for Housing the Disadvantaged published last September, 28% of rental ads don't comply with rent control regulations in the cities where the experiment is ongoing. This figure dropped by 2 points compared to 2023. In Paris, the proportion of ads surpassing the rent ceiling set by the prefectural decree has increased to 30%, up from 28% in 2023. Paris City Hall continues to believe that tenants have saved an average of €984 euros per year between July 1, 2019, and June 30, 2024, due to rent control, leading to a 4.4% decrease in rents over the same period in cities like Lille, Lyon, Villeurbanne, Bordeaux, and Montpellier.
However, critics argue that rent control exacerbates the scarcity of rental housing by deterring real estate investment. Paul Hatte, a councilor from the 17th arrondissement, suggested that abolishing rent control would be disastrous, potentially sparking an unfortunate rent spike in Paris. On the other hand, the left-wing majority on the Paris Council has rejected this proposal.
Permanent Rent Control on the Table
Left-wing legislators proposed a bill to make rent control permanent in both the National Assembly and the Senate on June 12, giving cities the freedom to experiment without deadlines. Supporter Senator Ian Brossat denounced the idea of abolishing rent control in a city like Paris as "criminal," sentencing tenants to a steep rent hike. It remains uncertain whether the government will adopt this proposal. If not, it might be inserted into the parliamentary agenda of one of the left-wing groups or during a cross-party week in the Assembly, but the next opportunity won't present itself until December.
- The rent control experiment, currently underway in 69 high-demand cities, has become a significant concern in the realm of property investment due to the rent control permit and the ban on energy-gobbling properties.
- As the rent control experiment is set to end in November 2026, politics plays a critical role in determining if it will be extended, with left-wing legislators proposing a bill to make rent control permanent to provide cities the freedom to experiment without deadlines.
