Climate law: avoiding an imbalance in the real estate market


The Climate and Resilience bill has placed real estate at the heart of its concerns, with numerous measures aimed at making it more respectful of the environment, in particular by putting an end to energy-intensive housing. Resulting from the work of the Citizen’s Convention for the Climate, this text requires the renovation of half of the French private rental stock (properties classified E, F and G) by 2034, under penalty of being withdrawn from the market.

The objective is ambitious, but it is for the moment unrealistic insofar as several micro-economic parameters come to alert us as professionals of the financial matter where this asset has a preponderant place with the investors. Indeed, real estate is now approached in a dismembered manner in public policies whereas it should be considered as a whole, to ensure the coherence of the reforms and the stability of its economic model. This would therefore imply clarifying the future of the Pinel device, the term of which is known but not the device which will replace it. It is damaging that the new and the old are not approached within the framework of a more global reflection.

Market effects

Then, this vast plan to decarbonize real estate raises questions about its scope. The park is not uniform according to the territories or confronted with the same issues, such as the tension between supply and demand, for example. Likewise, the reform does not respond to a double constraint with which we have been confronted for nearly a decade: the extent of the housing shortage and the number of vacant housing. In the absence of a national impact study, the players in the real estate chain will be singularly lacking in visibility. Likewise, the constraint being strong and limited in time, it could lead to a geographical imbalance and to a more limited demand. In fact, owners who are unable to receive rental income in the future will opt for other strategies. In particular, anticipate the withdrawal of their property from the market, consider short-term rental, less restrictive and more profitable, for example.

Human constraints

Insofar as it will be necessary to renovate 450,000 housing units per year, for twelve years, we are also wondering how the construction industry, affected by a skilled labor crisis, will be able to respond to the volume to be treated. Indeed, according to a Pôle Emploi barometer, more than 300,000 vacancies, due to a lack of sufficient skills, could not be filled in 2018. Achieving environmental excellence requires men and women who master the materials and renovation processes. . It is therefore a pitfall that the public authorities will quickly face.

Unsymmetrical aids

With regard to State aid, the Government has chosen to create a public service dedicated to this renovation plan. That is to say, legal, technical and financial support for owners. But co-ownership, an essential link in real estate, is much less advantaged. However, banking products suitable for the renovation of condominiums are rare and little distributed by financial institutions, as FNAIM also points out. Likewise, the financial provisions encouraging renovation are concentrated around the remainder to be borne by the State, for modest incomes who would undertake work. However, if we want the French to invest in energy renovation, the tax incentive must be sufficiently promising to create a mobilization of their savings towards the economy. Indeed, in one year, triple confinement requires, 44 billion were collected on the Livret A and the LDD according to data published last week by the Caisse des Dépôts et Consignations. Signs could be imagined for the benefit of real estate, which, let us remember, has benefited little from the Recovery Plan. In an economy shaken by the epidemic crisis, this reform will have a cost. The question is therefore to know who will bear the rest: the owner or the tenant? It is not obvious that the aid will be enough to cover it!

Incite rather than punish

No doubt it would have been necessary to remove the ceiling on State aid for renovation so as to have a real ecological gain, which cannot be done to the detriment of savers, as has been the case with the carbon tax. More generally, the punitive ecology that this text carries, will not serve the recovery by taxes and penalties. It can only lead to degrowth. However, we must reconcile environmental issues with the economic performance of our country, through a positive ecology, geared towards innovation, bonuses and incentives.

On this text, we expect more flexibility but also less contradictions so that our professionals in contact with consumers can do financial education, without the excess of centralism and regulations breaking the economic recovery. Failing to have ambitious objectives, this bill must focus on achievable objectives without exacerbating the problems that we experienced before and during the pandemic and which are those of financing, the scarcity of goods, areas of tension. , delay in the execution of the works. And many other warning signs that let us think that we should not, by ideology, add to the health crisis, a housing crisis. All the more so as the shortage could be accentuated if we are to believe the concerns of developers who noted, following the last municipal elections, a reduction in urban operations, under pressure from residents. In addition, the abolition of the housing tax would weigh on the enthusiasm of mayors to develop real estate projects.

Finally, to give new impetus to real estate investment, it would be interesting for the French public authorities to observe the incentive tax system implemented in the United States – particularly in Florida – where the real costs incurred in the context of the management of a goods are deductible from gross rents (management fees, insurance, works, property tax, etc.). We could then develop a model similar and specific to renovation in France to compensate or even replace previous or future devices, which no longer seem to be satisfactory.