The president of the Social Union for Housing denounces a drain of 1.3 billion euros by the State from the coffers of social landlords. “A crazy scandal.”
Lack of housing for students, insufficient buildings to house the entire population, some 154 municipalities placed in “tense zones” and missing social housing for those who need it most… France is currently experiencing a deep housing crisis at the point that the first president of the Court of Auditors Pierre Moscovici estimated on franceinfo Tuesday October 3 that it was necessary “rethink almost completely” housing policy.
The low-income housing (HLM) sector is particularly scrutinized, while its congress was held on Tuesday in Nantes. The president of the Social Union for Housing Emmanuelle Cosse, former environmentalist Minister of Housing, denounced on franceinfo the “crazy scandal” of the State’s drain on donors’ budgets which prevents them from investing. “Since 2018, the State has taken 1.3 billion euros of our rental revenue (…) to reinject them into the national State budget”, she says. True or false ?
Reduction in APL supported by HLM
Emmanuelle Cosse rather tells the truth, even if the process she describes is not entirely accurate. This is not a direct drain from the State but a kind of indirect withholding.
All this is linked to the 2018 finance law which caused a lot of talk at the time. To save money, the State had decided to reduce personalized housing assistance (APL) by five euros per month per household. Very controversial measure which had aroused anger in particular from student organizations.
This State saving on APLs had a completely different consequence in HLMs. Not wanting the residents of social housing, who already have little money, to suffer this reduction in aid, the State forced social landlords to lower HLM rents in the same proportions. The system was called the solidarity rent reduction (RLS). This way, even if tenants receive less APL, they do not have more money to pay every month to pay their rent.
From 800 million to 1.3 billion euros
The revenues of social landlords are therefore burdened. In a report published in December 2020, presenting initial findings on this RLS, the Court of Auditors revealed that the total amount of the reduction was equivalent to “4.5% of rental yields”. In other words, these rental yields fell by 4.5% due to the implementation of the State system.
The figures given by Emmanuelle Cosse are not entirely the right ones. Initially, the State wanted to save 1.5 billion euros per year on APL paid to residents of social housing. But after negotiations, this amount was lowered to 800 million euros per year in 2018 and 2019, before being raised to 1.3 billion euros the following year, therefore at the level that the president of the Social Union for Housing.
Investments by social landlords on the decline
The Court of Auditors estimated in 2020 that the financial impact of this RLS on lessors had no “immediately visible consequence”in particular because the State has implemented two support plans in parallel to help finance social housing investments, but it called for close observation “certain warning signs that have appeared since 2018”.
“If the financial potential of lessors remains almost stable, the self-financing of the HLM sector has nevertheless decreased, leading to a reduction in investments” and an increase in the debt of social landlords, she warned, pointing the finger at “delay in donor commitment to the new urban renovation program (NPNRU)”. This is reflected in the figures. According to the Vie publique website, while the government objective was to finance the construction of 120,000 new housing units in 2021, only 104,800 were approved, in a context of emerging from the peak of the health crisis. The Court also warned of a drop in maintenance expenses.