Paris Sees “Ten Years of Crazy Rents”

PARIS—A New Yorker reading the news here would find it depressingly familiar. On Oct. 31, the front-page headline in the leftist daily newspaper Libération was “Dix ans de loyers fous”—”Ten Years of Crazy Rents.”

The paper looked through its classified ads for apartments for September, and then compared them with its ads from September 2001. It found that average rents advertised had jumped by 50 percent in Paris, and 43 percent in the inner suburbs.

Of the 143 studio apartments advertised in the Sept. 29 issue, less than 20 percent were renting for less than 600 euros (about $825, “considered relatively affordable in the Parisian context”), compared with 80 percent ten years before. Even adjusting for inflation, the paper said, “the difference is enormous.”

In the Marx-Dormoy neighborhood, which Libération described as “tres populaire” (very working-class), a small studio (20 square meters, about 200 square feet) went for 900 euros. A larger one-bedroom apartment in the 11th arrondissement, on the city’s east side, was going for 1,580 euros. In 2001, a similar apartment had been advertised for less than 840 euros.

Paris rents are still somewhat cheaper than New York’s, but the stories tenants told the paper would be familiar to New Yorkers. Victor and Charlotte, a 24-year-old couple, spend half their 2,000-euro monthly income on a studio in the 13th arrondissement, a working-class area on the city’s southeastern edge with many Vietnamese immigrants. Before they moved in, they looked at a smaller studio with moldy walls that rented for 1,200 euros. Parisian landlords, they said, are “inhuman and unscrupulous.”

Laurence, a 41-year-old child-care worker with a degree in photography, pays 795 euros for a studio in the inner suburb of Vincennes—almost two-thirds of her income. “I am very rigorous,” she told Libération. “I note every expense.” Still, she fears finding herself in difficulty one day—”there are a lot of people in the street.”

Like New York, Paris has had rent controls since shortly after World War II, but its regulations are closer to San Francisco’s “decontrol-recontrol” system than to New York’s. Landlords can charge new tenants as much as they can get, according to the Global Property Guide investment Web site, but annual increases are limited to a “rent reference index.” That index, determined quarterly by the National Institute of Statistics and Economic Studies, has ranged from nothing to about 3 percent over the last four years. As in New York, a small, mostly elderly minority still lives in apartments that have not had vacancy increases.

The city’s overall real-estate situation is quite similar to New York’s. Paris is a small, densely populated city with good public transportation and one of the top places the world’s economic elite want to live. Therefore, working-class and poor people have been pushed to the city’s outskirts and inner suburbs.

In the Marais, the old Jewish quarter just east of the Hotel de Ville (city hall), a bakery is being replaced by a spa, and a boutique selling 99-euro jeans (about $140) occupies the corner where a thrift shop was last year. Cranes loom over the 13th arrondissement, which is dotted with new and under-construction high-rises.

These new buildings are not helping the shortage of affordable housing. On Oct. 25, the national housing agency reported that the cost of new housing in France had more than doubled since 1995, far above the increase in construction costs and the overall rate of inflation. With prices around 12,000 euros per square meter (about $495,000 for a 300-square-foot one-bedroom apartment), the Paris mayor’s housing assistant told Le Monde, it “is available only to the richest 3 percent of the population.” The newspaper estimated that 80 percent or more of new homes were sold at prices that only this minority can afford.

“The luxury property market is doing brisk business, even though unemployment is 9.5 percent,” the British Guardian Weekly reported on Oct. 28. It cited a report by the high-end auction house Sotheby’s that it had sold 130 homes in France and Monaco for more than $1 million in the third quarter of 2011, up 38 percent over the previous three-month period.