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Institutionally speaking, authority over housing in France is largely a state, i.e. central government, matter. Nonetheless, local authorities have necessity by law to contribute to the implementation of housing policy "to the extent of their powers". Nowadays in fact, responsibility for housing is increasingly shared between the state and local authorities. While the latter have extensive powers over urban planning, land use and social measures, central government controls the housing finance system, operates a policy of partnership with local authorities and defines technical standards.

Housing finance system
Right to housing
Housing strategy - urban dimension
Promotion of better quality housing
Background statistics

Central government action is designed to encourage a diversified supply of housing: from detached houses to apartments, in urban and rural areas, in the social housing and private sectors; every household must be able to find an affordable home appropriate to their needs.

Altogether, more than three quarters of the around 300,000 dwellings built in France every year benefit from state aid.

• A basic necessity. state aid goes primarily into constituting and developing a stock of social housing. Social housing is thus regarded as a basic necessity and has enjoyed a reduced VAT rate of 5.5% for some years on both new buildings and renovations.

• Conditions governing social housing: there is an upper income limit for applicants (determining their eligibility for this type of housing) and a rental ceiling imposing an upper limit on social landlords. These limits are set nationally for the various types of household and family and then adjusted according to geographical location. The current income limits allow two thirds of the population access to social housing.

• Specialist operators and state-aided building loans. Another feature of the social housing sector is the involvement of specialist operators, the social housing bodies, of which there are more than 1,200. Three quarters of these are organismes d’habitations à loyer modéré (HLM - moderate rent housing agencies) and one quarter, sociétés d’économie mixte à activité immobilière (semi-public property companies). The HLM agencies can be public or private bodies, depending on whether they are public limited companies, cooperative societies or local public corporations.

These agencies enjoy a number of advantages and are subject to certain statutory duties. To build social housing, the agencies use a cheap long-term loan: the loan for building low-cost housing, ("PLUS" - prêt locatif à usage social), with an interest rate which stood at 3.45% in 2000. The loan is financed from the deposits savers put into their National Savings Bank (Caisse d'Épargne) or French Post Office "Livret A", France’s most popular savings account. These deposits are managed by a special state-owned financial institution, the Caisse des dépôts et consignations [official deposits, investments, savings management, etc.]. The agencies also benefit from a state subsidy, at a rate varying between 5 and 12% (exceptionally 25%) depending on the operation.

Today, the social housing stock which has been built up in this way over the decades consists of 4,700,000 dwellings and is growing by around 60,000 dwellings a year.

While the social housing agency benefits from "construction aid" (aide à la pierre), tenants on low incomes may receive a special allowance (APL - aide personnalisée au logement or AL - allocation logement). The aid covers all or part of the rent depending on the tenant’s disposable income and type of household or family. Since 1997, the APL and AL have been updated each year. In 1999, almost 6.3 million households were receiving housing assistance which totalled EUR 12.09 billion.

• Incentives to encourage the letting of private property. The state has recently begun encouraging private-sector landlords to afford property (both old and new) to people whose income is above the upper income limit for obtaining an HLM, but not high enough to get housing in the traditional private sector. In return for tax-breaks, these landlords must ask moderate rents for a minimum of 9 years. This balance between tax-breaks and letting restrictions makes up what is known as the "private landlord’s charter".

• Another incentive to reduce the number of vacant dwellings is the tax levied since 1999 on dwellings deliberately left vacant by their owners for two years or more. The tax has been introduced in 8 conurbations covering 708 communes (lowest local government tier) and had brought in Eur 11.69 millions by 30 June 2000. It is paid into the budget of the National Home Improvement Agency (ANAH - Agence nationale pour l’amélioration de l’habitat), a public body which allocates aid for building work (repayable loans, subsidies). Owners can receive an additional amount EUR 3048.98 in 2000), over and above the ordinary ANAH subsidy, for vacant dwellings they relet after building works under the "private landlord’s charter".

• Support for home ownership. Concurrently, the state supports a scheme to enable modest-income households who so wish to own their own homes through a special loan (PAS - prêt à l’accession sociale). Granted on condition that the householder's income is not above a certain limit, and that the building cost does not exceed a certain threshold, this loan allows the recipient to benefit from a lower interest rate and a housing grant to cover part of the monthly repayments. In addition, it can be combined with another loan, the "zero per cent loan" ("prêt à zero pour cent"). This interest-free loan is also means-tested, but is available to a larger fraction of the population and covers up to 20% of the total cost. Around 115,000 loans of this kind are granted each year by credit institutions which have signed an agreement with the state.

• A home ownership savings system. The home ownership savings accounts and savings plans, available to all, enable savers to enjoy tax relief on the interest earned from these accounts and to receive a bonus from the state when they take out a loan to buy property.

Apart from providing assistance for house building, public funds are also used to finance schemes for the improvement of the existing housing stock and are granted to both social landlords and private owners, including owner-occupiers.

In the social housing sector, agencies can get special financial help for major renovation work. In the private sector, there are two public funding mechanisms: for owner-occupiers, there is the means-tested home improvement grant (prime à l’amélioration de l’habitat) while landlords can apply for an ANAH subsidy.

- Assistances in the provision of housing for employees. As well as this state aid for housing, there is a system financed by companies with more than ten employees, known as "employers’ participation in the building effort" (participation des employeurs à l'effort de construction). Funded by a 0.45% levy on the payroll, the monies deposited with special agencies are used to provide low-interest loans for employees who want to buy a home and loans or subsidies for HLM agencies building social housing. In the latter case, companies have long-term rights to housing for their employees in the housing schemes built by these agencies.

- Assistance in the payment of rents and provision of loans for employees. This employer-funded assistance helps employees having difficulty paying their rent and also provides temporary help for people on low incomes who are purchasing property and encounter exceptional difficulties in repaying their mortgages, for example, if they are unemployed.

Key statistics

In 2000, the breakdown for the housing finance system overall was as follows:

• state expenditure: EUR 19.27 billion

- construction subsidies: EUR 2.05 billion

- aid to individuals: EUR 5.34 billion

- tax relief: EUR 9.39 billion

- other expenditure: EUR 2.48 billion

• Spending by employers and unions (French social security system, employers' contributions): EUR 10.02 billion
  

For the last ten years, with the growth in various forms of poverty and vulnerability, the idea that access to housing, and help to remain in it, is an essential plank in any policy to combat social exclusion has increasingly come to be regarded as imperative: guaranteeing the right to a home has become a government priority.

- Recent legislation. Housing is now considered to be a national responsibility - it is not just a matter for the state. Several legal texts bear this out: for example, an Act of 6 July 1989 recognized the right to housing as a "basic right" and one of 31 May 1990 expressly stipulated that "guaranteeing the right to housing is a duty for the whole nation in the name of solidarity".

- A scheme to help those in difficulty. Recognition of this right has thus led to the setting up at local level of Housing Solidarity Funds (FSL - Fonds de solidarité logement), with matched funding from central government and the departments (second local government tier). Designed to make it easier for people in difficult circumstances to get housing and remain in it, these funds provide the necessary supporting measures (financial assistance, social assistance for the family, etc.). Since they were set up in 1990, they have helped 1.5 million households in difficulty (500,000 of them since the entry into force of the 1998 Act to combat the various forms of exclusion).

- Reform of the social housing allocation system. The system for allocating HLM housing was also radically reformed in 2000. The reform had three objectives: greater transparency in the allocation procedures; more attention to meeting the needs of those identified by the commune authorities as disadvantaged; and a greater social mix in conurbations to prevent the ghettoizing of certain areas. Following the reform, a single departmental registration system ensures that all housing applications are assessed and dealt with in a reasonable period of time and local communes hold joint conferences on housing (CIL - Conférences Intercommunales du Logement).

Towns, their suburbs and the surrounding countryside are today regarded as a single area (bassin d'habitat) where people live and work there exists a social mix and solidarity between the various sections of the population
When the imbalance between the geographical distribution of social housing within conurbations became glaringly obvious, proactive measures to combat it were deemed necessary. The 1991 Town Planning Outline Act was a first response. It made the provision of a minimum specific quota of social housing mandatory for communes in conurbations of a certain size which had deficits of this type of housing. Then the Outline Act of 29 July 1998 on the Prevention of the Various Forms of Exclusion highlighted the need for a concerted policy on the allocation of social housing. Indeed, the Act urges the local partners within defined areas (local authorities, social landlords, non-profit-making bodies, [e.g. housing associations in UK]) to cooperate on housing and town planning policy and organize conferences between the above-mentioned partners of local communes (i.e. CIL - Conférences Intercommunales du Logement).

The Urban Solidarity and Renewal Act of 13 December 2000 also includes several measures designed to give every commune an effective right to provide social housing within its boundaries. This legislation strengthens the obligations on locally elected representatives which had been set out in the 1991 Act, but in some cases had remained a dead letter. Communes without a minimum quota of social housing (20%) will now be obliged to provide this by a certain deadline or face penalties.

Partnership between central and local government

Concurrently, especially under the "planning contracts" drawn up between central government and the different regions (top local government tier), various contractual arrangements between the state and local government authorities have been set up or are in the process of being so: city contracts, conurbation contracts, and contracts involving larger groups of communes (pays) generally include a significant housing element. Central government is thus under strong pressure to help locally with the financing of studies and major projects to restructure the built environment. These schemes, which can even include demolition of large housing estates, clearly fall within the framework of a social urban programme. Other programmes are also being implemented with state assistance. These include the Housing Improvement Programmes (OPAH - Opérations programmées d’amélioration de l’habitat), involving a joint contract between a local authority, the National Home Improvement Agency (ANAH) and the state, which enable the renovation work on a group of housing units to be coordinated so as to revitalize an urban area and encourage a greater social mix. Similarly, Conservation Plans help finance the renovation of dilapidated housing in co-ownership.

The state also encourages professionals - architects, town planners, consultancies, companies, manufacturers, contracting authorities - to improve the quality of building products and processes. Through its support for experimental schemes and creation of incentivizing standards such as the Qualitel seal of approval, it encourages them to innovate in order to meet the economic, social and technical challenges of the building sector. Moreover, the creation of the European Single Market makes it imperative to ensure the rapid adaptation of French regulations and bring in supporting measures to prepare businesses for this market. The public authorities' main efforts are directed towards preventing risks and improving safety, health and environmental protection through the "Building and Health" programme, reducing noise levels and increasing thermal efficiency, and controlling investment and running costs.

Overall, in 1999, the construction industry had a turnover of more than EUR 76.22 billion, excluding tax and employed over 1.2 million people.

Technical regulations

Controlling costs. Easy management and maintenance of the final building are increasingly sought right from the design stage. In the social housing sector in particular, where decisions used to be made on the sole criterion of the immediate building cost, people are increasingly thinking in terms of "global cost" with a view to reducing or at least containing the twin elements of rent and other charges (maintenance, utilities, etc.).

Technical performance indicators. One lever the government can use is regulation and particularly technical regulations. In addition to regulations on fire safety and accessibility for the disabled, France also has rules governing noise levels and thermal efficiency. The specifications in these areas will soon be made stricter making France a European leader in this field. These measures are wholly in line with the government’s programme to control energy use and combat the greenhouse effect. Moreover, the fact that technical regulations often impose performance levels has a dual advantage: it encourages both in situ checks and research into innovative products and processes.

Research and innovation

- Government research incentives. Managed by the Ministry for Capital Works and Housing, the Urban Development, Building and Architecture Plan (PUCA - Plan urbanisme - construction - architecture) provides a framework for the implementation of interministerial action to stimulate research, experiments and innovation in the field of town planning, architecture and building.

The Plan has a Steering Committee, made up of representatives of the relevant professions, and a Scientific Council. Within the framework of specific programmes set up by PUCA's Permanent Secretariat, research and experiments are carried out by teams from the National Centre for Scientific Research (CNRS - Centre national de la recherche scientifique), universities and grandes écoles [prestigious higher education institutes with competitive entrance examinations], and by independent researchers, private consultancies, local authority housing departments, private-sector social housing organizations, construction companies and town planning departments.

- Experiments and R & D on products and processes. A national body, the Science and Technology Centre for the Building Industry (CSTB - Centre scientifique et technique du Bâtiment), helps the authorities draft technical regulations and has responsibility for materials testing. It is involved in research and practical work to improve construction technology and building design tools. It also runs programmes to exploit the results of R & D in association with manufacturers.

- Private-sector technological research. This is carried out both in large and medium-sized companies and in four "technology centres" funded by special levies: the Timber Technology Centre (Centre technique du bois), Tile and Brick Technology Centre (Centre technique des tuiles et briques), Metal Construction Study and Research Centre (Centre d’études et de recherche de la construction métallique) and Concrete Industries' Study and Research Centre (Centre d’études et de recherche des industries du béton).

Construction product certification

Implementation of the provisions of the European Construction Products Directive is also contributing to improving quality, as is the whole international standards system. This is why the government strongly encourages companies to seek the certification of their products.

An increasing number of manufacturers are thus applying for approval and certification of their products by Qualibat, a specialist body bringing together all those involved in the construction industry (entrepreneurs, architects, project managers, etc.). Qualibat awards three levels of approval, with the highest corresponding to ISO 9000 certification.

In the case of new products, for which there are not yet any technical standards, CSTB experts can make technical recommendations. These provide some security for the inventor-manufacturer and act as a benchmark for engineers and the insurance industry.

• With a current population of 60.7 million, France has a housing stock of 29.3 million dwellings, 24.3 million of which are main residences, the remainder being second homes (3 million) and vacant dwellings (2 million). The stock of main residences increased in the last decade by 10.5%.

• The main features of the housing stock are:

- more than half (54.5%) of French people are now home-owners, compared with 51% in 1984;

- 58% of dwellings are detached houses,

- 3% (11% in 1984) of dwellings lack minimum modern conveniences (inside toilet and shower),

- more than 65% of dwellings were built after 1948.

Housing’s contribution to the economy:

In 1998, households spent 22% of their disposable income on current expenses for their homes and 44% of their gross savings on property investment. Total housing expenditure amounted to Eur 261.91. billion, i.e. almost 20% of GDP.