Parisian Authorities Crack Down on Pied-à-Terre Rentals
In recent weeks, Paris City Council intensified its efforts to enforce an old—and long-overlooked—law that forbids short term apartment rentals in the City of Light, as well as in other French cities with more than 200,000 inhabitants. According to this law, residential properties may be let for a minimum of a year; an exception is made for student-tenants who are allowed to rent apartments for nine months. Because of this law, the short term rental market has remained partially clandestine for many years. As it is not easy to prove that a tenant is a “paying guest” rather than a “family friend”, it is not known for sure how many apartments are being rented as short term alternative to hotels. Estimates vary from 20,000 to double that number. Experts in the housing industry also believe that the numbers are growing rapidly as new owners—many of whom do not live in Paris or even in France—are buying properties with the explicit goal of renting them out for short term. Such rentals bring good return on investment: a studio or a one-bedroom apartment rented on a daily or weekly basis (assuming it is rented out for only 70% of the time) brings in triple or even quadruple the income compared to the same apartment being rented for a year or longer. Although short term rentals must be decorated and furnished, and require more maintenance and marketing, the increased income amply covers the higher overhead, while the Internet has made it easier to find potential renters.
The growth of the short term rentals market has led to a sharp rise in housing prices, especially in central Paris. It also means that fewer apartments are available for long-term rentals and at higher prices, claim the Parisian authorities, now bent on enforcing the law that has been on the books for over a decade. Earlier attempts to enforce this law have been delegated to the police and consisted mostly of sending letters to apartment owners whose neighbors complained about the frequent comings and goings of temporary tenants. Very few cases have been brought to court so far. Recently, Paris transferred enforcement to the mayor’s housing agency, the Bureau de la Protection des Locaux d’Habitation (the Office for the Protection of Residential Property). The bureau’s new strategy has been to look for owners through vacation rental websites and to threaten agencies that help owners and prospective tenants find each other. However, the agency is short-staffed, so not much progress has been made so far. Still, for owners who get caught the penalties can be steep. Conviction can result in a fine of as much as 25,000 euros; continued violation can result in additional fines of as much as 1,000 euros per a square meter per a day. Many owners are now worried, but only a few have pulled their properties off the market, while others have deleted addresses or other identifying details from Internet listings. But for most owners it is “business as usual”: the law provides little solution for those who want to rent their properties short term. The only way to do so legally is to have the apartment zoned as a commercial property. But permits to do so are expensive, with the average costs of €80,000 for a 20 square meter studio, which is prohibitive. The rezoning procedure also involves finding and purchasing a commercial property nearby and converting it into a residential one. Once a residential property is rezoned as a commercial one, the owner can no longer occupy the property, even for a short period of time, nor can it be let as a long-term rental.
A group of over 30 rental agencies have banded together, forming the Association des Professionnels de la Location Meublée to try to save their lucrative business while operating within the law. The association has commissioned a market study to show that short term rentals “correspond to a social and economic need for a city like Paris”, said the group’s president, Jean-Marc Agnes. This study underscored that tenants for short term rentals include not only tourists coming to stay for a week or less, but also professors, research scholars, and businessmen in international companies who may come for several months. Moreover, furnished rental accommodations offer a solution for tenants’ in emergency situations such as divorces, family problems, a need for specialized medical treatments that can be obtained only in the capital, delays in finding long-term housing, and so on. The association’s latest attempt to change the authorities’ mind is by circulating a petition which can be signed here.
On a more personal note, I must confess that I prefer staying at a furnished apartment or bed-and-breakfast whenever I travel, and I have done so in Paris on several occasions. Such accommodations are not only cheaper than a standard hotel room, but they allow a visitor a glimpse of the real Parisian life. And having regular folks as your hosts beats any hotel concierge. My many thanks to Jean-Pierre, Benedicte, and Olivier, for making my visits to the City of Light an unforgettable experience. (I am omitting their last names, just in case!)
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