Struggling to build new social housing, the HLM movement fears a withdrawal from the State

"We need public authorities to return to housing policy; we don't want to choose between new construction and renovations," said Emmanuelle Cosse, president of the Social Housing Union (USH), which represents social landlords, during a "social housing day" in Nancy (Meurthe-et-Moselle).

In 2023, 72.400 social housing units were created and rented. This is 20.000 fewer than in 2015, while the number of households waiting for social housing has increased by 6% each year since 2021 and now exceeds 2,8 million, according to USH data.

The threshold of 3 million waiting households should be exceeded next year, according to Christophe Bellégo, director of studies at USH.

The creation of social housing is slowing down "because the financial resources of organizations are decreasing, particularly due to all the increases in production costs and the levies put in place on the sector," explained Mr. Bellégo.

In this equation unbalanced by inflation and rising interest rates, the share of public subsidies has fallen from 14% in 2000 to 7% in 2023.

Christophe Bellégo sees a direct link with the 50% drop in the production of PLUS (Social Use Rental Loan) housing over six years, which corresponds to low-rent housing, or "the housing most suited to low-income workers," he adds.

Difficult financial balance

To build these PLUS housing units, social landlords are "caught between rents that are only slightly higher than PLAI housing units," which are the lowest-rent units intended for households in very precarious situations, and less advantageous financing conditions, with fewer public subsidies and higher loan interest rates, explains Mr. Bellégo.

He says that with rising construction costs and rising interest rates on social housing loans from 2022, getting buildings off the ground has become more complicated.

"When we want to bring a little profitability back into an operation, we tend to balance it with PLS or intermediate housing," which provides higher rents for less modest households, he adds.

A financial balancing act to the detriment of PLUS.

As for PLAI housing for the most vulnerable, a 30% quota is mandatory in each new project, but their production "is economically deficient" and therefore requires state aid via local authorities, according to Emmanuelle Cosse.

However, the national stone aid fund (Fnap), the main tool for managing the creation of social housing, is under threat due to a lack of funding planned from next year.

A working group is considering its future, but "the State has chosen to issue an unfavorable opinion on the resolution increasing the funding for the renovation and construction of social housing to 700 million euros by 2026," reports the Association of Intercommunalities of France.

Mikaël Chevalier, vice-president of Dinan Agglomeration and representative of inter-municipal authorities at the Fnap, fears that "the State will withdraw from supporting social housing itself."

Emmanuelle Cosse also defends the Fnap and wishes to "initiate a discussion with the State" to define the amounts of subsidies, the number of housing units to be built, including PLAIs, with these subsidies, beyond the "debate on the 2026 budget."

To give social landlords some breathing space, the government has included in its 2025 budget a €200 million cut in an annual levy called the "solidarity rent reduction" (RLS), the decree for which was published last week.

Social landlords should also be able to count on a further reduction in the Livret A rate in August, to which their borrowing interest rates are indexed, which could fall "probably to around 1,7%," according to Kosta Kastrinidis, director of loans at the Banque des Territoires.

Illustrative image of the article via Depositphotos.com.