Real estate: France suffers from a serious shortage of affordable housing

To analyse. Housing is becoming an intolerable burden for French households: the poorest 10% devote 40% of their budget to it. The evolution of real estate prices (+ 154% since 2000 on average) has nothing to do with that of incomes, which, according to the Organization for Economic Coordination and Development (OECD), peaked at + 18% during the same period. The phenomenon is exacerbated in Ile-de-France, where real estate inflation has reached 300% since 2000, and affects all major Western cities. It is even amplified by the health crisis, as noted by the OECD, which measures a record increase in real estate prices of on average 9.4% in the first quarter of 2021, in rich countries such as the United States, the United Kingdom. United, Canada, New Zealand or South Korea. The same movement, encouraged by the abundance of credit, widens the gaps between those who have access to property and the others, between the old, who had bought at a reasonable price, and the young, between the urbanites, who pay the high price, and rural people.

Until 2008, most liberal economists considered this inflation to be a godsend, a “wealth effect” for households. In 2004, the OECD held a colloquium on this triumphant theme, while France was then rather lagging behind, but not Spain, then affected by real estate frenzy and which saw itself becoming the richest in Europe. The subprime crisis quickly wiped out any “wealth effect” and the public authorities began to realize the social damage caused by the high cost of housing.

Today, it is reflected in the rapid development of “homelessness”, the massive indebtedness of households which forces them to arbitrate between housing and education, culture, leisure or transport, and the difficulty of companies to recruit, in the cities, the famous key workers who keep the economic machine running but can no longer live there. The inhabitants of tourist cities like Paris, Amsterdam, Barcelona or Berlin are, moreover, placed in unfair competition with tourists, ready to pay astronomical rents on Airbnb-type platforms. In Paris, tourists pay three times more than residents … To transport these key workers from their remote suburbs, Greater Paris must invest 35 billion euros in a supermetro.

“Poverty effect”

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