In what is being described as one of the most radical proposals that Europe has ever seen, Paris is redesigning the way that cities can offer affordable housing in the future. In June of 2015, Paris city officials allocated three new pre-existing mixed-income buildings to French social housing, in the first and eighth arrondissements – two of Paris’ wealthiest neighbourhoods.
This push comes as part of France’s newly designed affordable housing strategy to meet the 20 per cent social housing minimum threshold, as required under French law. In an effort to change the way social housing is allocated, the city has campaigned for more social housing availability in Paris’ most affluent neighbourhoods. The city has footed the €16.5 million bill to renovate the three buildings in preparation for their new tenants.
Traditionally, like many other cities, social housing in Paris has been restricted to low-income inner-city pockets and the suburbs. However, as part of this new strategy, the city has allocated 12 mixed income housing units that will be reserved for those earning less than €12,722 ($CAD 18, 323) per year. Two of the apartments are found on rue Saint-Honoré, in the first arrondissement of Paris. The exterior of the buildings are considered historical monuments and are found on streets lined with boutiques like Hermès, Yves Saint-Laurent, and Chanel. The goal of the strategy is to diversify the social and aesthetic elements of social housing, in an effort to move away from the traditional high-rise and concentrated styles used in the 1980’s.
Tenants were selected to live in these glamorous buildings in accordance with a point system based on their former living situations and salaries. Understandably, the new tenants have been extremely supportive of the new policy. However, not everyone in the city—especially those who are perceived as high-income— has been so encouraging.
Local residents and officials have been largely unsupportive of these development plans and have made efforts to push these projects back to lower income areas of the city. Despite this “not in my backyard” pushback, it appears that mixed income buildings in affluent Parisian neighbourhoods are here to stay. These mixed income neighbourhoods have been described as more satisfying to live in, safer, and with better access to services when compared to the isolated neighbourhoods where social housing units were built in the 1970’s and 80’s. With the host of benefits associated with mixed income neighborhoods, they have become the new trend for policy-makers designing affordable housing strategies.
Like many other European cities, socially mixed neighbourhoods in Paris have often been considered a thing of the past. Instead, cities have become small-scale models of income inequality, with clusters of rich residents living in separate neighborhoods from the low-income folk. To help slow down this rising concentration of wealth, and the rising phenomenon of displacement as a result of gentrification, in 2014, the city of Paris announced a plan to counter the rise of these “rich ghettos” throughout the city. As part of this plan, the city released a list of 257 addresses with over 8,000 apartments that the city would have a “right of first-refusal” to buy and transform into affordable housing units chosen based on
The way it works is that when any of the apartments in these 257 addresses are listed for sale, the city of Paris has first dibs. The apartment prices range from €5,282 per square metre to €13,406 per square metre with the Parisian average ringing in at roughly €8,400 per square metre. By law, these apartments must be offered to the city at a price decided by the city, not the seller. If the seller is not happy with the city’s offer, he or she can appeal to an independent judge to have the apartment re-valued or pulled from the market. But the landlord is legally forbidden from selling the apartment to anyone else unless the city declines to purchase the apartment.
The question of the hour is whether or not this plan is going to work, and whether its benefits justify its high cost. The city has allocated €850 million for the purchase of new apartments to be used as social housing; that’s a 70 per cent increase from the previous government. However, the current municipal government, led by Deputy Mayor Ian Brossart, who is responsible for the city’s housing, argues that not all of these 8,000 apartments will necessarily be purchased. In reality, only 100 apartments or so will be bought in the 6-year tenure of current Paris mayor Anne Hidalgo. The right of first refusal policy is primarily to give the city the ability to monitor the level of social housing stock, and to have the ability to step in and expand it if need be.
The buy-back plan comes as part of a larger strategy to improve access to affordable housing in Paris. The current municipal government has pledged €10 billion over the next 6 years to build 10,000 new apartments every year, 7,000 of which would be allocated to subsidized housing. Additionally, commitments have been made to convert office space to housing and to increase building height limits, which would allow for more units to be built per building.
Critics argue that this new government buy-back strategy could exacerbate an already sluggish real estate market in Paris. Current owners of the apartments on government lists might be discouraged from selling, given that they would be forced to accept low, non-market government prices. In addition, there is the question of whether the exorbitant purchase of such luxurious properties is the best allocation of public funds.
However, in a city where income inequality is pronounced and housing prices are some of the highest in all of Europe, the city should be commended for its innovative efforts. The creation of mixed-income neighbourhoods have proven to be successful in other countries, and have largely been defined as the new Gold Standard for affordable housing design. Although this policy is difficult to evaluate right now, it has the potential to restore the diversity and liveability in Paris, and its impact will likely be even more pronounced down the road.
Brynne Moore is a 2016 Master of Public Policy candidate at the School of Public Policy and Governance, University of Toronto. She holds a Bachelor of Arts in Political Science from McGill University, and has recently worked for both the House of Commons and the City of Ottawa. Her main areas of policy interest include health policy and fiscal policy.