The National Housing Council approved the cap on rent increases at 3.5% on Monday, June 27, despite opposition from tenant association who consider it an “untenable situation”.
The question of purchasing power will still be an important topic in these debates. However, Parliament will vote on the amendment finance bill this summer, which will include the “rent shield” provided by the government.
According to Amelie de Montchalin, Minister for Ecological Transition and Territorial Cohesion this measure must be in place for one year. It is meant to “protect the purchasing power of tenants who must continue investing in the energy renovations of their homes despite inflation”
Bruno Le Maire, Minister of Economy, described the measure as the “best compromise for all” in the morning. He pleaded with BFMTV that this “makes it possible for us to continue to build”.
The benchmark rent index could rise to 5.5% by the end, and even higher by 2023’s first half. However, rents would only increase by 3.5% if the measure is applied for one year.
The National Housing Council (CNH), an organization that brings together housing stakeholders, invited them to comment on the system on Monday afternoon.
Jean-Marc Torrolion (President of Fnaim) said that temporarily controlling rents’ rise is a reasonable approach. He also stated that “we consider everyone is making an attempt”. He stated that “the bet is reasonable” because “the time when inflation decreases, it will make a cushion the effects of inflation over this extraordinary painful period” and make it possible for the government to address the “enormous energy renovation challenges”.
Jean-Marc Torrolion, whose estimates indicate that nearly 1.4 million accommodation units are affected by the ban on indexing rents of thermal colanders F and G, which was implemented in August. Tenant organizations in the CNH opposed the “rent-shield” mechanism, claiming it was “unsustainable long term”.
Alexandre Guillemaud (project manager at the National Union of Independent Tenants) said that they were concerned about future rent arrears from tenants who wouldn’t have the financial resources to pay the increased rent. To which must be added a slippage of rental charges (gas and electricity, etc. ).
On Tuesday, the minister will meet with tenant associations to present her measure and argue that a freeze of undifferentiated rentals would have particularly “penalized” a modest landlord who relies on rental income to supplement his retirement (…)”..
Alexandre Guillemaud replies, “Intermediate landlords don’t need rent to live”, and is also unhappy with the revaluation personal housing aid (APL), which “doesn’t sufficiently follow inflation”. According to sources from the Ministries of Economy and Ecological Transition, APLs will rise by 3.5% starting July 1. This would add 168 million euros to the state budget.
Legally, the framework for rents will be in effect from October 15. The Ministry of Transition stated that the legal framework will apply to rents starting October 15. Ecology and Territorial Cohesion
The government must present its purchasing power bill within 10 working days to address the problem of purchasing power. This package must be in addition to any measures that have been in place since the fall. Last (energy vouchers, inflation compensation, tariff protection on energy, etc. ).
