What is a “tight housing market”?
The French real estate market is experiencing significant strain, particularly in major metropolitan areas. A “tight housing market” refers to areas where the housing crisis is severe, with steadily rising rents and a shortage of available housing.
To combat this crisis, the government has implemented several measures through the Alur law:
- Rent control
- Shortened notice periods
- Housing surcharge for second homes
- Tax on vacant housing
High-demand areas: priority for traditional rentals
In these areas, measures favor long-term rentals over short-term tourist rentals. Landlords are encouraged to rent to permanent residents.
Obstacles to short-term rentals in high-demand areas
Short-term rentals = commercial activity
Short-term rentals to tourists are considered a commercial activity. A municipal permit is required, often limited in duration (e.g., two years in Lille, renewable twice).
Change of use and compensation
Some municipalities require compensation for the change of use. This may involve converting commercial space into housing or purchasing commercial rights from a social housing provider.
Crackdown on undeclared furnished rentals
Inspections are intensifying. Violators face:
- Fines of up to €50,000 per unit
- Daily penalties of up to €1,000 per square meter
- Possible criminal prosecution
French cities in high-demand areas
The 2014 Alur Law identified 1,149 cities in high-demand areas according to Decree No. 2013-392 of May 10, 2013; this list was updated in 2015 and has remained unchanged since then.
