When we mention the building sector, we immediately think about China which is going through a serious crisis which could have heavy financial consequences and affect growth. In France it is quite also worrying but with a different nature. Its effects on families contribute to the deep discontent which has leaded to elections results giving to extremist parties a place they had never reached in the past. Yet, in the public debate and inside party different proposals, housing only occupies a secondary position because the political class seems not to have perceived the extent of the problem and its economic and social consequences.
During the last twelve months, the delivered construction permits of new homes and the housing starts numbers have been respectively 348 000 and 273 000 units, i.e. a 12% and a 20% fall compared to the previous twelve months. During the 2015-2020 period, housing starts fluctuated between 350 and 400 000 units. After the rebound registered at the end of the Covid-19 pandemic, a downward trend started in July 2022 which has become worse since 2024 beginning. The reasons of this fall have been wrongly understood by the successive governments. No significant measure has been adopted. Regarding the programs of the political parties which pretend to participate to the next government, only are mentioned statemen recalling the importance of the home in the household daily life.
This fall has been attributed to the interest rates increases which would have made more costly the acquisition of a property and which would affect both household and real estate investors. But it is not convincing because, in real terms, i.e. after having taken off inflation, rates are still very low and sometimes negative. If the cost of a credit for a household is a condition of his indebtedness capacity, that concerns only modest families who want to build a house and definitely not real estate companies or household having revenues above the average. During this year 2nd quarter, the household financial saving rate has reached a record level with 8.5% of the gross available revenue and the deposits collect is not stopping to increase to the point that their net financial assets will overpass 6 000 billion euros before the end of this year. The resources so are not missing.
A much more important and worrying cause is the change of the attitude of the local authorities, who are in charge of delivering housing permits. Without going as far as the Bordeaux mayor who prefers planting trees instead of building homes, a general trend with an ecologic inspiration proposes to limit the use of the lands and to protect nature in the name of the biodiversity and of the respect of environment. Behind this ideologic choice, we can find ulterior motives regarding the political belonging of the new inhabitants and also the hostility of these who live near the works which would affect their daily life. The mayors power in the delivering of housing permits is so not without link with the new buildings fall.
The consequences of this situation are first heavy for the economy. We remember the formula “When building is OK, everything is OK”. It has not lost its actuality. The home building fall means less growth points and tens of thousands of jobs lost at a time of, precisely, France knows a near-stagnation with an average growth under 1% for now several years. Atop of that, this demand, generated by the construction, creates few imports and could contribute to the reduction of the CO2 emissions thanks to well isolated buildings having the new technologies which allow to optimizing the energy consumption. Instead of giving subventions for buying Tesla, the State would favor the development of the installation in these new homes of these technologies.
That building fall comes at a moment when French population is still rising and soon will be near 70 million inhabitants. But we build 30% less homes than when it reached 60 million. The increase of the life duration has, as a consequence, that homes are occupied during a more and more long period. The growth of the number of single-parent families constitutes another factor of the demand increase. At last, and it is maybe the most worrying factor, the localization of the vacant homes corresponds less and less to the demand connected with employment which is concentrating around big metropoles. How to succeed the reindustrialization when local authorities refuse to put at an enterprise disposal the necessary plots of land and when the future workers will meet difficulties to get a home?
Last factor of the supply scarcity, the use of a real estate asset, not to live into it, but as a diversification tool of investment, frequently by foreign owners. The asset remains most of the time unoccupied but its value increases. Their number does not stop to rise in the large metropoles and in the touristic zones, to the detriment of their inhabitants.
To remedy to this crisis which affects family life when they want to inscribed their children in a school or to live near their jobs, the State has several tools at its disposal which it would use without any delay. The first one regards the procedure of the housing permits delivery which is necessary to simplify and especially the possibility to launch recourse which must be restricted. Decentralization has given the mayors a full power. To put an end to the excesses of the ecologist Malthusianism, the State must entrust the prefects with the mission to control that the decisions taken by the local authorities are not in contradiction with the expressed needs and to allow them to correcting the disequilibrium.
Great social housing construction programs must also be launched. The organisms have at their disposal the resources to finance them and the State and the public institutions, when it is needed, can grant them with guarantees if it is necessary. The energetic renovation of the existing homes is made more difficult by the diversity of the situations, a rented flat or an occupied home by his owner, a joint-ownership or a building owned by an investor, which is the cause of the slowness of the process. To the contrary, subventions for new homes with a good isolation and the energy optimization consumption technologies would be much more efficient and would obtain significant results in the reduction of the greenhouse gas emissions.
To grant the population satisfying housing conditions should constitute one of the top priorities of a government. It is not any more the case for several years and the worsening of the difficulties household are facing to get a home is not without link with the deep social discontent. The costs associated with a home, rents or yearly loans reimbursement, heating and transportation costs when it is too far from the working sites, constitute the most important components of the family expenditures. The purchasing power improvement is obtained as much by their stabilization or even by their reduction than by the increase of the wages and the social benefits.
The State, with the adoption of a dynamic construction policy would be the winner on the two points: growth which would result would contribute to the improvement of the public accounts and the household satisfaction which would come from housing better conditions would reestablish a trust which too is indispensable to the recovery of the economic and social situation.