Pre-emptions are going well in the capital. Newmark, an international real estate consultancy, counts 84 private housing units purchased by the City of Paris and social landlords between January 2023 and the end of October 2024, in a study devoted to the action of cities and social landlords in the face of the housing crisis. housing and its consequences for the residential investment market. Among these 84 housing units, 69 are pre-emptions, exercised by the City.
Pre-emptions, which allow a community to acquire as a priority a property put up for sale before the owner can transfer it to another buyer, therefore represent 82% of the total number of housing acquired by the City or delegated to social landlords. . “These 84 operations represent a total of 1.1 billion euros, including just under 650 million euros for pre-emptions, which makes public players the main players in the market, ahead of private and institutional players.», explains David Bourla, director of studies and research at Newmark. More than a billion euros of real estate were thus acquired or pre-empted by the City of Paris and social landlords during this period. This significant sum represents 41% of all investments in residential real estate in Paris. Paris.
Pre-emption has become one of the preferred solutions to the difficulties in relaunching new construction and the rise in real estate prices. Using the existing fleet makes it possible to achieve greater production objectives. The goal? Create more social housing. In Paris the objective is to reach 40% public housing by 2035, including 30% social rental housing and 10% “affordable” housing. Nearly 300,000 requests for social housing were recorded in 2023 in Paris (+ 7.2% in one year).
Towards increased rental tension?
«The City's main lever is therefore accelerating the transformation of private housing stock into social and affordable housing » explains David Bourla. Especially since the market is more favorable to social landlords: “Between 2020 and 2022, these were constrained by high prices and competition from other types of buyers. In 2023, the context has evolved, with lower demand from institutional and private investors and market values corrected downwards.», continues David Bourla.
The City does not think on the scale of the district but that of the neighborhood: certain neighborhoods may be in deficit, even if they belong to a district whose social housing rate is greater than 25%, which leads it to create more social housing. 43% of the number of acquisitions and pre-emptions recorded are concentrated in districts which have already reached, or even exceeded, the threshold of 25% of social housing (13th, 18th, 20th, etc.). . “For example, the City pre-empted 38-40 avenue des Gobelins, located in a district, the 13th, which is generally oversupplied, but in a deficit district.», specifies David Bourla.
This interventionism by the city of Paris impacts the assets of institutional and private investors. This policy would contract the private rental stock by limiting the potential number of homes to be acquired by private or institutional investors and by driving a large number of assets out of the private market. An acceleration of pre-emptions by the City would increase rental tension and lead to an increase in real estate prices, according to Newmark.
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