This “shield” must prevent a surge in costs equivalent to inflation. At the same time, the APL should also be revalued on July 1.
While inflation could reach 6.8% in September and should settle at 5.5% on average annually, the government is trying to act to avoid too strong a spread of price increases in rents. After consultation with representatives of tenants and owners, the teams from the Ministry of the Economy and Ecological Transition finally proposed “a shield“, to cap the increase at 3.5% over one year. At the same time, a revaluation of the same rate of personalized housing aid (APL) on July 1 should be proposed.
“Our goal was to absolutely avoid an increase in rents equal to the level of inflation“, we explain to Bercy. Indeed, the rent reference index (IRL), which sets the annual increase authorized for landlords, is indexed to the evolution of consumer prices (excluding tobacco and rents) over the last 12 months. The surge in current prices therefore risked being passed on to tenants with a lag of a few months. In the first quarter, the IRL has also jumped to 2.48%. A level that had not been seen since 2008.
Revaluation of APLs
The 3.5% figure that should apply for the last two quarters of 2022 and the first two of 2023, is “a compromise, between the wishes of the representatives of the tenants who demanded a total freeze and those of the owners who did not want to touch the formula for calculating the IRL“, we argue in the entourage of the Minister of the Economy. The first solution was quickly discarded by the executive who saw in it “A false good idea”, arguing that the owners were also affected by inflation and suffered increases in their charges (works, property taxes, etc.). “With a gel we will seize up renovations and construction starts“, we underline.
After passing before the National Council of the inhabitant, which must render an advisory opinion, the measure will be the subject of an article in the amending finance bill expected in July. However, the consultation will continue. In charge of the file, the Minister of Territorial Cohesion, Amélie de Montchalin but rather her or his successor, must soon receive the tenant associations. At the same time, the executive plans to revalue the APLs by 3.5% also from July. An additional cost estimated at 168 million euros over the year 2022.
On the side of professionals in the sector, these decisions are rather positively received. “That’s pretty wise», Estimates Stéphane Fritz, President of Guy Hoquet. “It wasquickly too high a rise in rents and revaluing aid protects both landlords and tenants“, he underlines. Nevertheless, he points out that these measures, if they are effective in the short term, cannot be a solution to solve the problem of price inflation facing the sector.
SEE ALSO – Real estate: will it still go up?