Paris, France’s economic capital, is an expensive place to live. Because of that, successive governments have been trying to artificially bring rent down over the years to avoid tenants’ defaulting on their payments. That’s an impossible task, and so the government has embraced full-scale control of the issue.
In France, rent is already controlled by default; once a tenant signs a lease, the landlord can only raise rent up to a value indexed on inflation and set by the government. This results in landlords not being able to afford regular maintenance and refusing to do basic repairs unless required by law. It is common for French tenants to have to paint their apartment, call and pay for handymen themselves. On the other hand, it takes a hefty legal bill and a minimum of a year for a landlord to be able to evict a tenant who defaulted on rent.
To protect themselves, landlords screen their applicants and demand very strong financial credentials from prospective tenants and guarantors alike, as well as large deposit. This deadlock situation is creating one of the toughest rental markets on earth. Applicants who do not have wealthy relatives as guarantors are denied apartments they could otherwise afford and landlords are not willing to rent decent apartments. The rental market in Paris is thus left with overrun condos in bad conditions and overpriced to account for the risk of default. With the new law, and landlords not even able to raise rent at a new lease, signature things are about to get worse.