Rent control in Paris, a subject that divides as much as it fascinates, has just experienced a new twist. On November 18, 2024, the Council of State annulled a judgment of the Paris administrative court of appeal which had validated, in October 2023, the prefectural decree of May 28, 2019 setting the reference rents in the capital. A look back at an emblematic case which raises crucial questions for housing stakeholders.
A legal battle over rent control
The case began in May 2019, when the prefect of the Île-de-France region, in application of the ÉLAN law of November 23, 2018, set up an experimental rent control system throughout the territory. Parisian. This decree sets increased, reduced and median reference rents depending on the characteristics of the housing (size, location, year of construction, etc.). However, several professional associations, including the National Real Estate Federation (FNAIM) and the National Union of Real Estate Property (UNPI), challenged these measures before the administrative courts.
In July 2022, the Paris administrative court ruled in their favor and annulled the decree, considering that certain criteria for applying the measure were not sufficiently well-founded. But there was a twist: in October 2023, the Paris administrative court of appeal overturned this judgment, thus reinstating the prefectural decree. This decision does not satisfy the applicants, who then turn to the Council of State, the highest French administrative court.
A legal error at the heart of the cancellation
The Council of State ultimately ruled in favor of the FNAIM and the other applicants, noting an error of law in the judgment of the administrative court of appeal. According to the decision, the court did not correctly evaluate an essential element: the homogeneity of the geographical sectors taken into account for establishing reference rents.
Article 140 of the ÉLAN law requires that the areas demarcated for supervision be homogeneous in terms of rents recorded. However, the court relied solely on the differences between the median rents calculated by the decree, without analyzing whether the rents charged in the sectors were actually homogeneous. This analysis, deemed insufficient, led to the cancellation of the 2023 judgment.
The financial and political consequences
In addition to the annulment, the Council of State ordered the State and the City of Paris to pay 375 euros to each of the applicant associations, for legal costs. If the amounts appear symbolic, the issue is much larger: this decision could weaken the application of the rent control system, widely supported by the public authorities but criticized by real estate professionals.
This case also reopens the debate on the effectiveness and relevance of this measure. Supporters of the framework say it is an essential tool to combat soaring housing prices in big cities. Conversely, its detractors denounce a rigidity which would slow down rental investment and reduce the available supply.
And now ?
The case has now been referred to the Paris Administrative Court of Appeal, which will have to re-examine the case in light of the observations of the Council of State. In the meantime, rent control remains a sensitive area, oscillating between social imperatives and economic constraints.
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