Expensive housing is the source of social anger

Dec. 10, 2018, By DAL federation

Housing is the largest and most important item of household spending in recent decades. However, this central question on purchasing power, raised by yellow vests, is ignored in public debates. Tenants and first-time buyers are tightening their belts, and are facing taxes, income cuts or PLAs… We must lower rents and tax real estate speculation.

The yellow vests have triggered a large-scale social movement on the deterioration of the living conditions of the working classes and the small and medium-sized classes. The social question is at the centre of the conflict, particularly the purchasing power and the anguish of the end of the month, which can be concluded by the bailiffs and the throwing people out on the street. Obviously, the abandonment of diesel fuel taxes or an end-of-year bonus will not be enough to ease social pain, or even an increase in the minimum wage, because for many, expensive housing is a gaping wound that swallows up the family budget.

In 1973, tenants spent on average 10% of their national income on net rent, once the PLA had been deducted, and in 1963 it cost only… 6.3%![1]

40 years later and according to INSEE, in 2013, rent takes an average of about 26% of income: 24.1 for low-cost housing tenants, 28.4% for private tenants and 26.6% for first-time home buyers[2].

Housing crushes even more heavily the less wealthy half of the population, the one who nowadays manifests itself: the least wealthy quarter of households (1st quartile) spend on average 40.7% of their income on rent in the private sector and 48% on payments for home purchase payments, often for poor quality housing. The 2nd lowest wealth quartile spends on average just over 30% on private housing or home ownership, and is not immune to a higher effort rate and an incident. These figures are averages and indicate that they are very often exceeded, especially in urban areas where rents and real estate are higher.

On the other hand, the richest quarter of households devotes only 21.3% of their budget to private rental and 22.8% to home ownership, for better quality housing. The effort rate of the richest 10% is even lower, while they are infinitely better housed…

Governments since 1918, faced with the political and trade union structure of the working classes and until the progressive deregulation of rents in the 1980s, have taken care to limit the price of rents and real estate, in order to preserve or improve the purchasing power of the working classes. Thus, rental and real estate profits were sacrificed on the altar of social peace.

This has not been the case since the mid-1980s, when Chirac completed the rent control measures (law of 48) and encouraged property speculation (Reconquest of eastern Paris). This is even less the case since the arrival of Macron, who, with the ELAN law promulgated at the end of November, has opened up a new wave of speculation, thanks in particular to the non-renewable 1 to 10-month mobility lease in the private rental sector, which should gradually replace the 1 or 3-year renewable lease in force today.

As for the decline in APLs, not only is it increasing in 2018, but it is also increasing in 2019, severely punishing private and public housing tenants, modest first-time buyers and social landlords, since it is partly financed by the drain on the cash of public housing bodies, representing a total saving of around 3.5 billion euros per year.

Although France is at the top of the high housing prices in rich countries in terms of household incomes[3], a new general increase in real estate and rents is possible, at the cost of increased precariousness of inhabitants, the sale of low-cost housing, and also thanks to major urban development projects such as the Greater Paris area, international investors, tourism, the 2024 Olympic Games, the brexit and other hazards of neoliberal globalization…

This pressure of expensive housing on the family budget no longer allows new increases in basic necessities, forcing people to sacrifice care or leisure for children, at best. For many, the spectre of manual military-led expulsion and being thrown out on the street is looming. The refusal to do so is one of the causes of the yellow vest revolt.

Some are older and have therefore completed paying for their housing, but they still have to help their children, or even their grandchildren, to find a place to live (joint guarantee, occasional assistance, etc.).

However, the subject of expensive housing has not entered into the public debate, quite the contrary, it is hidden. There are of course solutions, such as those claimed by the yellow vests: homeless zeros, vigorous rent control, requisitioning vacant housing, massive production of social housing, powerful thermal insulation program.

To these points should also be added the massive debt repayment of first-time homeowners, the end of evictions, the increase in the PLA, the taxation of speculative land and property profits, the repeal of the ELAN law, the dismantling of Airbnb-type tourist leases, compliance with the DALO law, the maintenance of working-class districts, etc.

In short, housing expenditure should not exceed 20% of the resources of each household… as for the rich.

In the meantime, action must be taken, and if necessary, concrete and effective forms of action must be considered to obtain a reduction in rents or the requisition of vacant housing…..

Jean Baptiste Eyraud

Spokesperson for the LAD

[1] https://www.persee.fr/doc/estat_0336-1454_1975_num_73_1_2268

[2] https://www.insee.fr/fr/statistiques/2586026?sommaire=2586377

[3] friggit 2018 prix immobilier maison appartement loyer