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Rent controls backfire in France

Rent controls aren’t just a flawed experiment in Spain, where they predictably harm more people by excluding them from the rental market than they help with lower rents. They’re also creating problems in France, as a recent Le Figaro article explains, revealing how these measures fail to curb rent hikes, discourage investment, and frustrate landlords—raising serious questions about their future.

A recent article in Le Figaro has ignited debate about the effectiveness of rent control measures (encadrement des loyers) in France. Drawing on data from the Fédération nationale de l’immobilier (Fnaim), the article claims that rent controls have not succeeded in limiting rent increases and may, in fact, be counterproductive. The article and its accompanying reader comments highlight concerns that rent control is more of a political gesture than an effective policy tool. Spain, it seems, is not alone in facing challenges with rent controls, as the French experience illustrates how such policies often fail wherever they are implemented.

Key arguments against rent control

Rent control does not limit rent increases effectively

The central argument of the Le Figaro article is that rent controls in areas of high housing demand (zones tendues) have not led to rent increases that are significantly different from those in uncontrolled areas. According to Fnaim, “Les loyers évoluent de manière semblable entre les communes où le loyer est encadré et les zones tendues où il n’est pas encadré” (“Rents are evolving similarly between municipalities where rent is controlled and tense areas where it is not controlled”).

The article cites data from January to October 2024 showing similar rent increases in both regulated and unregulated areas. For example:

  • Controlled areas: Paris (+2.5%), Bordeaux (+3.7%)
  • Uncontrolled areas: Nantes (+3%), Marseille (+2.2%)

Fnaim argues that the Indice de Référence des Loyers (IRL), an inflation-linked index dictating maximum annual rent increases, already provides sufficient tenant protection. They explain that the IRL reflects the median rent and moves in step with inflation, acting as a natural check on excessive rent hikes.

Rent control creates complexity and discourages investment

Fnaim’s president, Loïc Cantin, describes rent control as “une machine à gaz épouvantable qui se prend dans ses propres contradictions” (“a terrible machine that gets caught in its own contradictions”). Critics argue that the policy adds layers of bureaucratic complexity while fostering distrust between landlords and tenants.

Moreover, the policy is viewed as a deterrent for property investment. Fnaim warns that rent control has become a “nouvel épouvantail pour les investisseurs” (“a new scarecrow for investors”). By limiting the financial returns landlords can expect, the scheme discourages investment in rental housing—a trend that exacerbates housing shortages in the long term.

Rent control hinders energy efficiency renovations

Fnaim also highlights how rent control undermines the push for energy efficiency. They question, “Comment peut-on vouloir encourager un propriétaire à faire des travaux de rénovation énergétique s’il ne peut pas appliquer d’augmentation de loyer?” (“How can we want to encourage an owner to carry out energy renovation work if he cannot apply a rent increase?”).

Landlords argue that if they cannot recoup renovation costs through higher rents, they are unlikely to undertake energy efficiency upgrades. This poses a significant problem as France aims to meet climate and energy targets.

Lack of evaluation and delay in assessment

Critics are frustrated by the lack of rigorous evaluation of rent control measures. Fnaim calls for an urgent review, while the government has announced an evaluation scheduled for June 2025. A decision on whether to extend rent control beyond 2026 will follow, but for many, this timeline feels too slow.

Reader perspectives: polarised and passionate

The reader comments on Le Figaro’s article reflect a range of perspectives, many of them strongly worded.

Critiques of rent control as ideological: Some readers dismiss rent control as a flawed left-wing idea. Comments like “Quelqu’un a déjà vu une idée de gauche fonctionner ?” (“Has anyone ever seen a left-wing idea work?”) and “une taxe déguisée” (“a disguised tax”) suggest scepticism about the policy’s effectiveness and intentions.

Landlord frustrations: Many landlords voiced their dissatisfaction, noting how rent controls, combined with rising property taxes and new regulations, are driving them to sell their properties. One commenter explained, “j’ai arrêté à Lille de faire des travaux dans les logements que je loue … s’ils ne sont pas contents je les envoie à la mairie pour grogner” (“I stopped doing work in the housing I rent in Lille… if they’re not happy, I send them to the town hall to complain”).

Increased competition and inequality: Rent control appears to have intensified competition for rental properties, with landlords favouring tenants who offer the best financial guarantees. One commenter noted, “Depuis le blocage des loyers ils [sont] 35 à attendre … Je prends celui qui a les meilleures garanties donc LE plus riche” (“Since the rent freeze, there are 35 people waiting… I take the one with the best guarantees, therefore the richest”). This leaves lower-income renters pushed to the suburbs.

Scepticism about the data: Not all commenters agreed with the article’s arguments. One sceptical reader noted, “On peut être contre l’encadrement des loyers mais les arguments présentés ici ne tiennent pas la route” (“One can be against rent control, but the arguments presented here do not hold up”), challenging the validity of the data.

French rent control experiment is failing

The Le Figaro article, alongside its reader comments, paints a picture of rent control as a deeply divisive issue in France. While Fnaim argues that rent control is an ineffective and counterproductive policy, reader comments reveal the depth of frustration among landlords and highlight unintended consequences such as reduced renovations, discouraged investment, and intensified competition for properties.

With an evaluation planned for 2025, the future of rent control in France remains uncertain. However, the general sentiment from both the article and its readers is that the policy may be causing more problems than it solves. France’s struggle with rent control may serve as a cautionary tale for other countries considering similar measures.

Spanish rent controls also backfire, like they did last time they were tried

In Catalonia, where rent controls have been in place since March 2023, two quarters of data allow us to evaluate the policy’s impact in Barcelona. While rents in the city did not rise during this period, as you might expect under rental caps, the number of new rental contracts also fell significantly as landlords pulled their properties from the rental market. This means that for every tenant who benefited from lower rents, at least as many were unable to find a rental home. Yes, some were fortunate to pay less, but just as many were effectively pushed out of the market, left without a home. Proponents of rent control consistently ignore this harmful side effect, which arguably does far greater societal damage than the modest benefits of slightly lower rents for others.