The French rental housing market is facing significant turbulence as legislative efforts aim to address the growing concern over energy efficiency classifications of rental properties. On January 29, 2025, the French Assembly witnessed the rejection of a key proposal aimed at amending the stringent regulations surrounding properties classified as energy inefficient, particularly those categorized under classes F and G by the Diagnostic de Performance Énergétique (DPE).
This proposal, which had gathered bipartisan support initially, sought to introduce flexibility for landlords who own units within co-owned properties. The primary article of this proposal, which aimed to ease rental restrictions for energy inefficient homes, was voted down by 72 deputies, against 65 who supported it. Following the rejection, the proposal's rapporteurs, Iñaki Echaniz from the Socialist Party and Bastien Marchive from Macron's party, deemed it "emptied of its meaning" and withdrew it from the parliamentary agenda.
Valérie Létard, France's Minister for Housing, expressed her disappointment, stating, "Common sense lost tonight. This bill could have offered legal clarifications for owners and tenants, as well as adjustments for properties with shared ownership. Today, where the bill could have provided flexibility and pragmatism, its rejection will not address the realities on the ground!" Her sentiments were echoed by industry representatives, including Loïc Cantin, president of the Fédération nationale de l'immobilier (Fnaim), who warned about the imminent risk of hundreds of thousands of tenants facing housing insecurity due to these regulatory hurdles.
According to recent government estimates, nearly 5 million homes across France are currently classified as energy inefficient, putting severe pressure on the rental market, especially as the ban on renting these properties begins on January 1, 2025. The situation is dire, particularly with around 250,000 of these homes located within co-ownership structures, where compliance with energy performance may require significant investment and collective action through tenants' associations.
The broader contextual backdrop for these discussions includes the mounting influence of rental platforms like Airbnb, which have reshaped housing dynamics by incentivizing short-term rentals over traditional long-term leases. Following the passage of the Le Meur Law on November 19, 2024, new restrictions were placed on furnished tourist rentals, including mandatory registration with local authorities and limitations on rental durations, aimed at curbing the disruption to permanent housing availability caused by short-term lettings.
This combination of legislative efforts from both sides—addressing energy efficiency and regulating short-term rentals—illustrates the complexity of French housing policy where various stakeholders, including landlords, tenants, and municipalities, grapple with these contentious issues. The proposed law aimed to clarify specific conditions under which properties may still be rented even if classified as energy inefficient, which would have provided much-needed relief amid looming regulatory deadlines.
Yet, divisions remain sharp within the Assembly, particularly with representatives from the left arguing the proposals do not go far enough, whilst those on the right claim they venture too far. An unnamed macronist cadre was noted for their comments, stating, "For the left, we’re going too far, and for the right, we're not going far enough." This highlights the challenge of forming cohesive policy solutions amid competing interests.
Currently, the municipal governments are left with the task of implementing housing regulations practically, and there’s uncertainty about how aggressively they might enforce the rules, particularly surrounding the mandatory certification of energy performance. From January 1, 2034, all tourist rental properties will need to be rated between classes A and D on the energy performance scale.
Létard called for immediate collaboration from all actors involved, urging them to work together to avoid the harsh consequences of failing to address this pressing issue comprehensively. Given the recent rejection and the potential for future legislative efforts, stakeholders remain hopeful for more pragmatic solutions to emerge as the housing crisis continues to exacerbate.
This latest development poses important questions about the future of rental housing regulations and the welfare of both landlords and tenants. With such pressing concerns on the horizon, it might be only a matter of time before these discussions reemerge before the French legislature.