The rent control had a “real but limited” effect in Paris in 2022, according to the Paris Metropolitan Area Rents Observatory (Olap), which stated that “more than one in four” newly rented apartments are still being rented above the ceiling.
This means that initial rents – before relocation – that are above the ceiling increased less rapidly (1.7% on average) than the rent reference index (2.5%), which is “proof of an undeniable, albeit modest, effect of rent control,” according to Olap’s statement shared with AFP. The rent control scope, defined by “contracts signed in 2022,” represents about 136,000 moves and lease renewals, “accounting for 37% of the entire non-furnished private rental housing stock in the capital,” Olap specified.
However, in a sample of nearly 500 cases, “69% of the moves concluded in 2022 had a rent within the range, while 28% were above the ceiling,” Olap wrote. Therefore, “more than one in four apartments in the capital are above the ceiling,” as summarized by Olap. Very small units, where landlords can charge “high per square meter rents while offering an affordable monthly rent,” are particularly affected, with “seven units of less than 20m2 out of ten” exceeding the ceiling.
During relocations, there were “more rents (14%) going above the ceiling than rents (4%) coming back within the range,” Olap also emphasized. Olap also reminded that “exceeding the ceiling does not necessarily indicate a violation of the law” because it “may result from the application of a supplementary rent.”
The rent cap, which prohibits, with some exceptions, renting a property beyond a reference rent, is enforced in Paris, Lille, Lyon, Villeurbanne, Montpellier, Bordeaux, and in the inter-municipalities of Seine-Saint-Denis Plaine Commune and Est Ensemble. It will soon be in effect in 24 municipalities in the French Basque Country, including Biarritz and Bayonne. The first city to implement rent control in 2015 before it was overturned by the court in 2017 and made a comeback in mid-2019, Paris has been the first to directly enforce this rent control since January 1st.
