The FOPH asks the Government to clarify its budgetary intentions regarding social housing

Made public on August 4, 2026, more than eight months after the date of November 28, 2025 appearing on the document, the report of the General Inspectorate of Finance (IGF) and the General Inspectorate of the Environment and Sustainable Development (IGEDD) examines several avenues for savings concerning social housing.

The document presents three cumulative scenarios representing €935 million, €1,848 billion, and between €2,897 and €3,220 billion respectively. According to the mission, the most extensive scenario would entail "profound transformations of the social housing financing model."

These proposals do not constitute government decisions at this stage. However, their potential inclusion in the 2027 budget bill could alter the financing, construction, and management of social housing. The National Federation of Public Housing Authorities (FOPH) therefore requests that the government clarify its intentions before the next budget decisions are made.

A budget review that does not constitute an evaluation of social housing

The report responds to a mission letter sent on May 19, 2025 by François Bayrou, then Prime Minister. This letter asked the IGF and the IGEDD to identify three levels of savings, in the order of 1, 2 and 3 billion euros.

The mission clarifies that its work constitutes a review of public spending and not a general assessment of social housing or a comprehensive analysis of the housing market. The scenarios were therefore developed based on predetermined savings targets, and not on a prior estimate of housing needs, necessary investments, or renovation objectives.

However, the data compiled in the report describes a worsening of the pressure on social housing. Between the end of 2017 and September 2025, the number of applicants increased by 32%, representing 810.000 additional applications, while allocations decreased by 19%.

Social housing production has also weathered the construction crisis better than the rest of the market. Between 2022 and 2024, construction starts fell by 29% for all housing, compared to 8% in the social housing sector. The report thus describes social housing as a "buffer" against the crisis.

The report also estimates that, in the short term, the private sector would not be able to compensate for a decrease in social housing supply. Finally, it notes that, with funding levels remaining constant, housing organizations cannot simultaneously achieve energy production and renovation targets.

“This report presents public authorities with a contradiction: it notes that social housing is mitigating the construction crisis and that the private sector cannot take over, while simultaneously considering measures likely to reduce the investment capacity of housing organizations. We will not meet the growing needs by weakening the actor that has best withstood the crisis. Social housing stock is a resource serving local communities, not a reserve intended to balance public accounts,” declares Michel Ménard, president of the National Federation of Public Housing Offices.

Savings distributed among several players

The FOPH emphasizes that the €3,220 billion figure in the most optimistic scenario would not represent a levy directly and entirely borne by social housing organizations. The amounts combine measures concerning social landlords, certain households, employer contributions to construction efforts, and intermediate rental housing.

The three scenarios are also cumulative. The second incorporates the measures of the first and adds new ones. The third integrates the two previous levels, supplemented by more structural changes.

Some assumptions have already been superseded by the decisions made in the 2026 budget. The initial scenario relied in particular on a contribution of €375 million to the National Housing Assistance Fund. This was ultimately reduced to €275 million by the finance law.

This difference leads the Federation to request a clear distinction between the hypotheses formulated by the inspections, the arbitrations already made and the measures that could be included in the next draft finance bill.

A possible elimination of the corporate tax exemption

The third scenario notably provides for the elimination of the corporate tax exemption applicable to the activities of organizations falling under the general economic interest service.

The expected return is estimated at 400 million euros. The report nevertheless acknowledges the uncertainties surrounding this assessment and the effects that the measure could have on the self-financing and investment capacities of the organizations.

A target of 15.000 additional social housing sales per year

The mission also envisions an additional 15.000 sales of social housing units each year. The expected €314 million in revenue would correspond to corporate tax applied to capital gains from these sales.

This estimate therefore assumes both the removal of the current exemption, a significant increase in the number of sales and the achievement of a positive net result by the organizations concerned.

According to the dashboard of the National Agency for the Control of Social Housing , just over 10.000 homes were sold to individuals in 2024, representing approximately 0,2% of the social housing stock. The additional 15.000 sales planned would therefore exceed the current annual volume.

The report also relies on a study published by ANCOLS in 2019 , which suggests that the capital gain from the sale of a property could finance two to three new homes. FOPH believes this benchmark needs updating, as the average cost of producing a new home has increased, according to the report, from €148.000 in 2019 to €184.000 in 2025.

Another study by ANCOLS, published in 2020, indicates that borrowing, secured against current and future rents, can in certain situations generate resources comparable to or greater than a sale, while keeping the property within the social housing stock. However, this possibility remains contingent on each organization's debt capacity.

For the Federation, the evaluation of a sales policy must also include the actual use of proceeds from sales, reinvestment times, the net change in the housing stock as well as the location, type and rent level of the housing sold and built.

The FOPH notably advocates the use of the real estate solidarity lease (BRS) during HLM sales, in order to sustainably maintain the affordable nature of the housing concerned.

“The sale of social housing can be a tool for asset management or facilitate certain homeownership pathways, but its impact cannot be reduced to the capital gain generated. The relevant indicator is its net effect on the housing stock, the investment capacity of organizations, and the supply actually available in the territories. A theoretical equivalence is not enough to establish a financing policy,” emphasizes Pierre Madec.

These questions are currently the subject of a study conducted by the Federation with Pierre Madec, an economist at the French Economic Observatory (OFCE) within Sciences Po. Its results are due to be published in the autumn.

A VAT increase is being considered for certain social housing units.

The third scenario also proposes to raise from 5,5% to 10% the VAT rate applicable to housing financed by subsidized integration rental loan (PLAI), to housing financed by social use rental loan (PLUS) located in ANRU zone or in a priority area of ​​the city policy, as well as to certain works carried out on these housing.

The expected gain is estimated at €323 million for all public administrations. A reduction in the cost of loans distributed by the Banque des Territoires is being considered to offset this increase.

The mission acknowledges, however, that the measure could slow the production of housing offering the most affordable rents. Its consequences would also vary depending on the financial situation of the organizations, the composition of their housing stock, their construction and renovation programs, and the specific needs of each region.

The FOPH is demanding clarification before the 2027 Finance Bill

None of the proposals presented in the spending review currently have any immediate legal or financial impact. However, their potential inclusion in the 2027 budget bill would give them concrete implications for landlords, local authorities, and tenants.

The Federation therefore asks the Government to specify the scenarios and measures it intends to adopt. It also calls for a prior assessment of their consequences on housing production, the investment and renovation capacities of housing organizations, rents, and territorial balance.

For the FOPH, an evolution of the social housing financing model cannot be based solely on the addition of budgetary efficiency measures. It requires defining the objectives pursued, measuring their economic and territorial effects, and involving social housing organizations and local authorities responsible for implementing local housing policies in the discussions.

Consult the report by the IGF and the IGEDD on public spending on social housing