The main social landlord in New Caledonia threatened with liquidation

“If we don't find a solution, it's a social bomb that will explode. We have had the anger of the youth, we will have the anger of the families,” warns Petelo Sao, the president of the board of directors of the Company real estate in New Caledonia.

For five years, this mixed economy company created in 1956 and owned equally by the government of New Caledonia and the French Development Agency (AFD) has been experiencing serious financial difficulties.

Its deficit, of the order of 5,8 million euros per year, has plunged further since May and the institutional crisis which degenerated into riots, almost tripling according to Mr. Sao.

During an extraordinary board meeting last week, he warned: "Either reforms are adopted, or the SIC is threatened with liquidation in the first quarter of 2025, or even at the end of this year."

A disaster when the SIC manages a real estate portfolio of more than 10.000 housing units and houses around 15% of the New Caledonian population, including 27.000 people in Nouméa, or one in five households.

"The liquidation of a social landlord? I don't know how to do it. Behind the figures, there are people, families," worries Mr. Sao to AFP.

The impossibility for the government of New Caledonia - whose finances have been drained since the crisis - to provide housing assistance, paid directly to landlords, could push the SIC towards bankruptcy.

The Social Housing Fund (FSH), the New Caledonian organization which collects employers' contributions and manages this aid, was indeed asked to advance funds in place of the government but refused, justifying it in a written response to AFP by “the current economic situation and the uncertainty that surrounds it”.

High vacancy rate

The SIC faces another major challenge: a housing vacancy rate of 16%, caused in particular by difficult access conditions (you must have a permanent contract) and the lack of attractiveness of the stock, in poor condition. state. In France, in comparison, the vacancy rate peaks at 2,9% on average, according to a report from the Court of Auditors.

The increase in unpaid rent and lease terminations, particularly in neighborhoods particularly affected by the riots, further aggravates the situation. Especially since these unpaid debts are expected to increase.

In July, the South province (the richest in New Caledonia, where Nouméa is located) decided to increase the length of residence in the province from six months to 10 years to benefit from social assistance.

"Today, it is very difficult to allocate new social housing. Funding is frozen and even ongoing projects risk not being finalized. This unilateral decision complicates access to housing for those who have it the most need,” said Petelo Sao.

The president of the SIC also says he is being pressured "by 'vigilant neighbors' (loyalist residents organized to protect their neighborhood during the riots, Editor's note) to evict his tenants, because they are rioters."

Beyond the SIC, the landlord's setbacks reveal an urgent need to reform social housing in New Caledonia.

Vaimu'a Muliava, member of the Caledonian government in charge of town planning and housing, carried out a reform aimed at preserving this pillar "of social cohesion" but the examination of his text, which advocated better financing of the social housing, was interrupted by the institutional crisis.

Mr. Muliava questions the aid paid in New Caledonia to tenants of private housing, which represents almost a quarter of total housing assistance. His suggestion: use these contributions to fund a fund similar to that of the National Agency for Urban Renewal (Anru) and finance the renovation of neighborhoods.

"We cannot be satisfied with superficial reforms", affirms Vaimu'a Muliava: "We must depoliticize social housing, which has become a gas factory. We have piled up the structures, multiplied the actors, (...) we finds itself with citizens drowned in complex administrative procedures".