France Property News

France may force investors to put money into residential property

France may force investors to put money into residential property
Possible plans by the French government may mean that institutional real estate investors are obliged to invest in residential property, according to a report by Property Investor Europe.
Housing Minister Cécile Duflot announced the strategies, which would be put in place in order to create more institutional capital to support the government’s house-building program.
"Institutional investors have not abandoned property investment but they have focused on office real estate rather than on residential. We need to be able to get a better balance," said the minister.

The new home construction targets include increasing house-building in Paris to 500,000 units a year, including 150,000 social housing units.

This comes after the Capital’s new social housing law was placed onto the statute book.
Under the law, the provision of social housing required by local authorities has risen from 20% to 25%, while the penalties imposed on authorities who fail to comply has increased five-fold.
Land may also be transferred from central government and public operators to local authorities and social landlords, in the hope of building an additional 110,000 homes by 2016.

The government is still dubious as to whether the changes will be compulsory.

"The question of making this obligatory is being studied so that all investors are put on an equal footing," Cécile Duflot confirmed.

The new – slightly modified – bill is the second of its kind, after the first version was blocked by the constitutional council in October owing to procedural irregularities in the National Assembly parliament.