Does rent control really benefit households? Has it, as its detractors predicted, restricted rental supply in markets where it already did not meet demand? An evaluation report from the Ministry of Housing was expected at the end of 2023. It should ultimately not be revealed before… 2026.
Based on official data and statistics provided by different private actors, The world However, it is drawing up an inventory of the situation in five large cities that already cap rents: Paris, Lille, Lyon, Bordeaux and Montpellier.
First observation: the implementation of the framework coincides, more or less, with a slowdown in the increase in median rent per square meter in three cities. In Paris, where the system was applied in 2015, then suspended in 2017, “we saw rents rise very quickly when the first phase of the capping was canceled”, remembers Manuel Domergue, the director of studies at the Abbé Pierre Foundation. As soon as it was put back in place in 2019, “they started to stagnate or decline again”he adds.
Same slowdown in rent inflation in Lille, where the system, also revoked in 2017, has been applied again since 2020, as well as in Lyon, which adopted the framework in 2021.
For other cities, it is difficult to judge: Bordeaux only implemented the system in summer 2022, and the data for 2023 from the local rent observatory is not yet available. In Montpellier, prices had already been stable since 2020, two years before the introduction of the framework.
Low inflation and “rent shield”
Where it is observed, the slowdown in the increase is undoubtedly due as much to management and to weak developments in the rent reference index (IRL). “The accelerations and reductions in the level of rents in tense areas are often strongly linked to the IRL”points out Clément Pavard, studies and observation project manager at the National Agency for Housing Information (ANIL).
Calculated each quarter by INSEE based on inflation, the evolution of this index constitutes the maximum level of annual increase in rent that an owner can practice. In 2020 and 2021, it often remained below 1% and sometimes even came close to 0%, due to low inflation. Then, since mid-2022, the maximum variation in rents has been frozen at 3.50% by the “rent shield”, a rate lower than that of the increase in consumer prices.
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