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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsParis Wants Landlords to Turn Vacant Office Space Into Apartments—Or Else
http://www.citylab.com/politics/2014/07/paris-wants-landlords-to-turn-vacant-office-space-into-apartmentsor-else/374388/Leave your office space unrented and well fine you. Thats the new rule declared by the city of Paris last week. Currently, between six and seven percent of Paris' 18 million square meters of office space is unused, and the city wants to get this vacant office space revamped and occupied by residents. The penalties for unrented space will be as follows: 20 percent of the propertys rental value in the first year of vacancy, 30 percent in the second year and 40 percent in the third year. The plan is to free up about 200,000 square meters of office space for homes, which would still leave a substantial amount of office space available should demand pick up. The city insists that, while the sums involved are potentially large, this isnt a new tax but an incentive. And, if it has the right effect in getting property re-occupied, may end up being little-used.
Landlords' groups are taking the new plan as well as can be expected. Theyve pointed out that, while the cost of the fines might be high, it could still cost them less to pay them than to convert their properties to homes. According to a property investor quoted in Le Figaro, the cost of transforming an office into apartments can actually be 20 to 25 percent more expensive than constructing an entirely new building. Many landlords might be unwilling or unable to undertake such a process and thus be forced to sell in a market where, thanks to a glut of available real estate, prices are falling. There is also the question of how easy the law will be to enforce: Landlords could rent out vacant properties at a token rent simply to avoid the vacancy fine.
Its too early to see if these predictions will come true, but past experience in smaller French property markets suggests it wont. The fines have already been introduced elsewhere in France: in the countrys fourth city of Lille (governed by the Socialist party) and in the Parisian satellite town of St Quentin-en-Yvelines (governed by the right wing UMP). So far, neither has experienced a legislation-exacerbated property slump....
But will it all work? At the very least, Paris deserves recognition for being proactive, especially on a continent where many cities grip on the property sector is floundering. Berlin has recently had major new homebuilding plans rejected by residents (for good reasonthey were due to get a bad deal), while the U.K.s number of newly built homes has actually gone down, despite property prices continuing to rise sharply. As Paris becomes a laboratory for new legislation to make homes more plentiful and affordable, other European cities would do well to watch it carefully.
Landlords' groups are taking the new plan as well as can be expected. Theyve pointed out that, while the cost of the fines might be high, it could still cost them less to pay them than to convert their properties to homes. According to a property investor quoted in Le Figaro, the cost of transforming an office into apartments can actually be 20 to 25 percent more expensive than constructing an entirely new building. Many landlords might be unwilling or unable to undertake such a process and thus be forced to sell in a market where, thanks to a glut of available real estate, prices are falling. There is also the question of how easy the law will be to enforce: Landlords could rent out vacant properties at a token rent simply to avoid the vacancy fine.
Its too early to see if these predictions will come true, but past experience in smaller French property markets suggests it wont. The fines have already been introduced elsewhere in France: in the countrys fourth city of Lille (governed by the Socialist party) and in the Parisian satellite town of St Quentin-en-Yvelines (governed by the right wing UMP). So far, neither has experienced a legislation-exacerbated property slump....
But will it all work? At the very least, Paris deserves recognition for being proactive, especially on a continent where many cities grip on the property sector is floundering. Berlin has recently had major new homebuilding plans rejected by residents (for good reasonthey were due to get a bad deal), while the U.K.s number of newly built homes has actually gone down, despite property prices continuing to rise sharply. As Paris becomes a laboratory for new legislation to make homes more plentiful and affordable, other European cities would do well to watch it carefully.
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Paris Wants Landlords to Turn Vacant Office Space Into Apartments—Or Else (Original Post)
KamaAina
Jul 2014
OP
I am laughing here, thinking of how long it takes to get plumbing repaired in occupied apartments, w
uppityperson
Jul 2014
#1
uppityperson
(115,677 posts)1. I am laughing here, thinking of how long it takes to get plumbing repaired in occupied apartments, w
wondering how long it will take to get those offices converted though, to be fair they could change them into studios with the wc and bathing facilities made from the current office workers facilities.
Quantess
(27,630 posts)2. European countries have wildly different laws & regulations regarding housing, compared to the US
and also between nations. This is really complex, not as straightforward as demand market real estate concepts, here in the US.