A - The market for furnished rental
Is Furnished responsible for soaring prices on Paris?
- In the districts little concerned with furnished apartments, the price increase is the same as in the heart of the capital (where it is more developed).
Higher prices in Paris is related to many other factors including low interest rates in recent years, a vision of the real estate market as a safe haven, or more specifically Paris, the number of unoccupied housing left ( more than 100 000 to the present time).
Over the past five years, property prices in districts favorable for furnished rental (especially in the center of Paris, namely the 1st, 2nd and 3rd district) and those less attractive for this type of rent (as 18 or 19th) had the same percentages of increase (source of notaries).
Is Furnished a key to the housing crisis in Paris?
- The furnished rental is a very small part of the Parisian housing stock (or approximately 20,000) and seasonal rental an even smaller share (or 5 to 7000).
Conversely, the furnished rental meets needs, multiple real, accommodation tourism, education and training, temporary transfer, medical accompaniment of a relative, transitional housing after a divorce or separation, renovations a residence ...
In fact, the housing crisis in Paris has deeper causes. To remedy this, other avenues should be explored, particularly of vacant dwellings and residential buildings converted into offices.
The furnished rental that meets a real demand observed internationally in all major cities, and of a limited number of properties, must not be the scapegoat of a problem that goes beyond it.
What is a furnished rental?
- The term furnished rental defines all types of rentals for the whole duration, although it is most often used to describe rentals over 3 months.
For rentals of less than 3 months, we prefer to use the term holiday rental.
Thus in Paris, it is estimated the total number of apartments to 20,000 (up to one year). Of these, only 5-7000 furnished apartments are only seasonal rentals.
B - The tourist rental market
Why is the tourist rental booming?
- The short-term rental represents a new tourist demand that could be met by conventional hotel services.
The motivations of these tourists are many and varied:
- The desire to make a long stay (the average length of a stay in a Paris hotel is 2.9 days).
- The need for equipment (eg kitchen) more compatible with family life in the case of tourists with young children.
- The desire to "live like a Parisian."
- Business tourism, knowing that when the Parisian trade fairs, offering supplement that is furnished rentals is required to meet the needs of tens of thousands of exhibitors and visitors.
Who benefits from the tremendous growth of this market tourist rental?
- There are two markets:
- For real estate professionals meeting within the SPLM, there is no significant growth. In fact, they are very selective in their apartment management in terms of locations and or quality. The number of properties matching their criteria is limited.
- The owners conversely market, there is strong growth.
This is currently an unbridled market, without supervision or regulation. This development was made possible thanks to the Internet, which provides a showcase for any owner wishing to make tourist rental.
Overall demand on the tourist rental market is strong. It should regulate to avoid excesses. It is the wish of the SPLM.
C - Furnished rentals, a lucrative market?
This Is sector became one of the most lucrative veins in the property sector with the entry of big investors attracted by the prospects?
- The sector is composed of small owners (with usually one good) and owners 'industrial' (real estate investors, pension funds ...).
95% of the players in this sector are small owners. For them, the goal is to combine rental income and flexibility of use. In general, income is slightly higher than they would get on long term rentals.
Regarding the "big players" in the industrial approach, furnished rentals can indeed provide for them an attractive area, with higher returns, while avoiding constraints of hotel.
D - Is furnished legal?
Is it specifically seasonal rentals and short term that is illegal?
- The interpretation that the Paris City Council makes the law (L 631-7 and L-632-1 of the Construction and Housing Code) is extremely restrictive: it does not in effect renting the residence main tenant, and this over a period of one year minimum.
This therefore makes it impossible to rent furnished holiday residence of Paris. It is not seasonal tourist rental or the Mayor of Paris condemns today is any form of furnished rental (other than principal residence).
This extremely restrictive interpretation of the law rests solely with the Mayor of Paris. No other municipality in France is not in this direction, leading to prohibit renting furnished second home.
Justice she condemns furnished rentals?
- It should be remembered a few simple given:
- The City of Paris has an interpretation of the law, which is not that of other local authorities. It derives its position from a combined interpretation of two sections of laws (L 631-7 and L 632-1 - the construction code and housing). The question of the obligation of prior authorization and use of compensation is questionable effect.
- The SPLM notes that in other cities over 200 000 inhabitants, where the law applies, no municipality made the same interpretation as the Mayor of Paris.
- Only summary proceedings have yet been pronounced on the question of furnished rentals, following complaints from the City of Paris against owners renting their well furnished.
However, the Court can not have the authority of res judicata. The interim relief is a temporary court decision. - The intention of the SPLM is to support owners who wish to engage in substantive discussion. For this interpretation of the city of Paris on the issue of furnished rental has been submitted to the Administrative Court and the State Council.
- Decisions on the substance should take place in 2013 and 2014.
Furnished rentals Does not it constitute unfair competition against hoteliers?
- Tout d’abord, les besoins des clients des hôtels et des locations meublées diffèrent.
En effet, la durée de séjour des locations meublées est beaucoup plus longue que celle des hôtels. La durée de séjour dans les hôtels parisiens dure en moyenne 1,7 jour pour un Français et 2,9 jours pour un étranger. Or, les clients des locations meublées recherchent en général de plus long séjour pouvant aller d’une semaine à trois mois.
Il faut ensuite rappeler le taux de remplissage exceptionnel dont bénéficient les hôtels parisiens (de l’ordre de 90%). Les meublés saisonniers n’impactent pas sur leur activité. A l’inverse, les hôtels parisiens peinent souvent à satisfaire l’ensemble de la demande de logements, notamment durant les foires et les salons.
Enfin, l’SPLM souhaite que la location meublée intègre aussi des normes de qualités élevées pour satisfaire les attentes de la clientèle. Ainsi, des chartes sont en cours de conception afin de garantir un niveau d’accueil satisfaisant sur tout le parc géré par les acteurs de l’SPLM.
Why the compensation requested by the Mayor Is not applied, with rare exceptions, by the owners?
- Paris City Hall asking owners making the furnished rental compensate by buying commerciality. The SPLM believes that the law does not require it.
This demand can not be met by the owners for the following reasons:
- Compensation is to buy commerciality. The use in furnished rental and tantamount to a passage in offices. But this is of course not the case, as well clearly remains habitable.
- The requested compensation amounts to giving a dimension to the irreversible change in use (such as for offices). Or conversely, the owner's decision to make the furnished rental has a temporary duration.
- This heavy and complex requirement of compensation by the Paris City Council is inapplicable in the state by the majority of players, which are small owners.
Compensation may therefore provide a satisfactory regulatory response to smallholders to the question of furnished rentals.