EN FINIR AVEC LA CRISE DU LOGEMENT [ARGENT MAGIQUE]

Poor housing conditions are widespread: 9 m² apartments without heating or insulation, roofs with holes letting rain in, mold and structural issues are common problems people face.

Renters spend 50% of their salary on housing in some cases, creating severe financial strain on household budgets.

The state provides 211 billion euros in public funds to housing companies but must regulate their use since citizens ultimately pay for this money through taxes.

There is no magic money to solve the crisis; any solutions require understanding and addressing root causes rather than temporary fixes.

• Owners with no mortgage (propriétaire non accédent) • Owners with active mortgage (propriétaire accédent) • Renters in social or private housing • People housed for free (rare, about 2% of population)

Among people over 70, 70% own their homes outright; for those under 40, less than 5% are mortgage-free owners. Renters represent 40% of the French population overall.

Approximately 60% of French citizens are potentially affected by the housing crisis: both renters and people with active mortgages face significant housing expenses.

• For renters and mortgage holders, housing costs approach 30% of household income on average • For the poorest 25% of renters and owners, the rate exceeds 40% • The OECD defines 40% as the threshold where housing becomes unsustainable

Finding rental housing in mid to large cities is nearly impossible; real estate agencies report fewer properties available and people often resort to lying on applications to be considered.

• Real estate prices excluding inflation increased 88% over 20 years • First-time buyers now need 29-year mortgages versus 15 years in 1965 • 24% of households own 68% of properties, showing extreme inequality

• In 2023, nearly one in three people experienced cold homes versus one in seven in 2020 • 19,023 evictions with law enforcement involvement (record high, +17% in one year) • 350,000 homeless people, increasing annually • 735 deaths on streets or without shelter in 2023

Political leaders promised solutions for the homeless crisis nearly 10 years ago but have failed to deliver meaningful change despite continued deterioration.

Building standards and environmental norms are widely blamed as the primary cause of the housing crisis, with property owners and politicians consistently citing regulation overload.

• Since 2017, Macron proposed solving the housing crisis by reducing environmental and social norms • Current government repeats the same argument: excessive norms on energy efficiency (DPE standards) suffocate the market • Ministry positions prioritize loosening regulations over protecting housing quality

When a tenant describes living in an unsaleable thermal passthrough for 7 years with children getting pneumonia, authorities focus the discussion back on regulations rather than addressing the housing quality crisis.

The argument assumes that reducing norms would increase supply and lower prices, but this ignores that norms ensure basic livability like heating, water, and sanitation that were major improvements from 1970s housing.

Spain built massively between 1995-2007 (14,000 homes per million residents in 2007) yet experienced one of the strongest real estate price increases; prices only fell when construction stopped in 2008.

The Netherlands builds relatively little and saw stable housing-per-person ratios, yet real estate prices tripled, proving no correlation between supply and price changes.

• The housing crisis is international across 38 OECD countries with completely different building codes • Countries with weaker tenant protections (USA, Australia) also face affordability crises • Housing price elasticity to supply is low: 1% more housing only reduces prices by 1-2%

An 88% price increase over 20 years cannot be explained by small supply elasticity, indicating a different mechanism drives prices beyond simple supply-demand logic.

Real estate transactions involve a crucial third party: the banker with their own logic and interests that determine whether buyers can afford properties.

In modern capitalism, housing prices are primarily determined by the supply of financing available, not by the number of homes. This shift happened around 2000.

• Economist Jacques Frigitte: 1% increase in housing only reduces prices 1-2% (low elasticity) • Researcher Manuel Alber: Housing became a political drug that allowed temporary solutions to capitalist contradictions • The correlation between loan duration extension and price inflation is striking

For governments, extended credit enabled consumption growth without raising wages, increased fiscal receipts through notary fees, and boosted GDP through real estate sector revenues.

Real estate prices were closely tied to household incomes; banks offered rigid conditions with about 15-year maximum terms; interest rate changes determined price movements.

After 2000, banks realized they could increase profits by extending mortgage durations beyond 15 years, allowing them to lend more to more people and generate higher interest revenues.

• Financial innovations like securitization promised to reduce banker risk • Banks now believed they could safely extend credit terms beyond historical limits • Duration increased from 15 to 23 years on average, then further to 27+ years in recent proposals

A first-time buyer buying today's equivalent home to what parents bought needs 23-year debt instead of 15 years, leaving no financial flexibility when children are young and need support for education.

Between 2000-2007, real estate prices surged 70% relative to household incomes while construction loan durations lengthened, showing causation between credit extension and price inflation.

In 2008, households reached their borrowing limit and the financial crisis hit; prices stabilized but never fell, leaving burden trapped at unsustainably high levels.

• Politicians became dependent on housing price inflation to generate growth • Homeowners' wealth depends on continued price appreciation • Real estate sector employs many workers and generates significant tax revenue • Any price decline threatens financial stability and political support

Prices remained frozen at extreme heights requiring 23-year mortgages, creating permanent financial strain on households with no solution that doesn't risk economic collapse.

Average renter income declined 50% relative to national average since 1970; renters became disproportionately poor as ownership became a mark of wealth.

• In the 1970s, about 40% of all income groups rented homes • Neoliberalism made ownership desirable as the way to build financial assets • Richer groups became owners while poorer groups were forced into rental markets • Now 80% of the poorest 10% are renters versus 12% of the richest 10%

The average renter today is a minimum wage worker, pensioner on minimum income, or young person on short contracts/unemployed; entirely different from the mixed-income renter base of 1970.

• Housing quality improved significantly since 1970 (heating, plumbing, bathrooms) • At constant quality, rents to income ratio stayed stable • But overall rents increased because housing quality genuinely improved • Reducing norms would mean eliminating these basic standards, not solving affordability

When property prices require unsustainable mortgages but renters cannot afford proportional rent increases, landlords face an impossible risk-return ratio that makes rental investment unattractive.

• Some convert rental properties to Airbnb or vacation rentals for higher returns • Others stop renting altogether, further reducing supply • Government expects private landlords to house the French population despite these economics

• January 2025 housing plan offers tax shocks to encourage confidence • Simplification shock to speed construction • Fiscal shock providing tax advantages to real estate investors • Implicit message: we will not reduce prices

The plan's actual commitment is maintaining profitable rental investment by allowing property price inflation to continue, while renters remain trapped in unsustainable cost situations.

Millions of households are deeply indebted on absurd timelines with zero financial flexibility; any job loss immediately stops mortgage payments, threatening bank viability.

• Banks finance not just mortgages but also business operations • When banks fail, they pull credit from entire economy • Local real estate crisis becomes global economic crisis • This is what happened in 2008

European Central Bank raised interest rates after COVID, making mortgages more expensive; governments cannot control this variable but must maintain prices anyway.

• Bruno Lemer extended maximum loan durations to 27 years in some cases • Renaissance group tried to increase debt-to-income ratio caps from 35% • These measures prop up prices temporarily but increase crisis risk when it arrives

A functioning market requires prices that can fall without causing crises; the current system where prices must always rise is not a real market but a speculative bubble.

• Do not increase household debt beyond income-aligned levels • Implement aggressive taxation of vacant properties to force circulation • Reduce purchase taxes penalizing young first-time buyers • Encourage Bail Réel Solidaire (BRS) model for affordable ownership

• Vienna: 60% of residents rent public housing with amenities; 44% spend over 25% of income on housing • Paris: 67% spend over 25% of income on housing • London: 86% spend over 25% of income on housing • Singapore and Vienna demonstrate that public intervention stabilizes affordability

The housing market must be definarcialized; housing must stop being a speculative financial asset with systematic price appreciation and become only a place to live.

• Housing discrimination and exclusion from ownership • Unsustainable effort rates in household budgets • Poor and inadequate housing conditions • Homelessness and deaths in the streets

The current model is a house of cards dependent on ever-increasing household debt and price inflation; the first strong wind will collapse it completely.

While the financialized system creates inequality and crisis risk, public-led models like Vienna's actually work better at providing affordable, dignified housing without generating systemic risk.

There is substantial work to do; renters and first-time buyers must unite politically to demand definarcialization and public investment in housing as essential public infrastructure.