Housing now costs twenty-four years of borrowing where fifteen were needed before
In 2025, a first-time home buyer takes out a mortgage over twenty-four years to purchase a new dwelling [1]. In 2000, they borrowed over fifteen years. Nine additional years of life committed to a loan for the same property. This progression is not the result of a passing crisis: prices have decoupled from incomes for a quarter century, and the rules compressing supply have not changed. The trade-off posed for 2027 is whether to institute enforceable building rights in tight markets, risking the opposition of established homeowners who benefit from this scarcity, or to maintain a demand-side aid system that capitalizes into prices without loosening supply blockages.
The decoupling between prices and incomes, twenty-five years apart
Between 1965 and 2000, the index of used housing prices in France tracked disposable household income to within about 10 percent. Since 2000, the decoupling has taken hold and has never corrected itself. In the second quarter of 2025, the price of used housing relative to household income exceeded by 55 percent the long-term trend observed over the 1965–2001 period [1]. This gap has barely shifted since 2007.
The consequences for a first-time buyer are measurable. In the fourth quarter of 2024, housing purchasing power was 26 percent lower than it was in 1965 or 2000 [1]. To buy the same dwelling, a first-time buyer had to borrow over twenty-four years, versus fifteen years at those two reference dates [1].
This fracture does not affect all households equally. In 2022, the share of income that free-market renters devoted on average to their rent, net of aid, reached 28.2 percent [4]. For the 25 percent most modest among them, this share climbed to 44.7 percent [4]. Between 2019 and 2022, this burden increased more for free-market renters, up 1.3 points, and even more for the most modest households [4].
The situation depicts two Frances in housing. Established homeowners have seen their property wealth grow in value. Low-income private sector renters devote a growing share of an already tight budget to housing, with no prospect of buying.
In 2024, housing expenditure represented 21.2 percent of GDP, or 618.9 billion euros [5]. Housing absorbed 27.8 percent of final household consumption spending, the leading spending category [6].
Three hundred seventy-four thousand permits, eleven percent below average
New supply has collapsed over the past two years. The number of housing starts fell to 286,000 in 2023, one of the lowest levels in over thirty years [7]. In one year, that is a 22 percent drop; building permits issued fell 24 percent [7].
From November 2024 to October 2025, 374,133 homes were authorized for construction [7]. That is 11 percent less than the average of the previous five years. The twelve-month total of housing starts remains 30.8 percent below that same average [8].
Demand for social housing reached a new high. At the end of 2024, 2.767 million households were waiting for social housing, up 6 percent in one year [9]. As of June 30, 2025, that figure reached 2.87 million, rising steadily [10]. Since 2015, applications have climbed 52 percent [10].
In Île-de-France, 65,094 allocations were made in 2024 [11]. Households waiting numbered 888,150 that year [11]. The median allocation time frame there approaches two and a half years.
The used housing market went through a correction before a slight rebound. At the end of December 2024, the annual transaction volume was estimated at 792,000, in slight recovery after continuous decline since late September 2021 [2]. Prices for used housing resumed rising in the first quarter of 2025, with a 0.5 percent increase, after six consecutive quarters of decline [3]. The correction did not bring prices back into the historical range: the price-income fracture remains intact.
Supply compressed by its own rules
The housing shortage in France results from an accumulation of rules that raise costs and slow construction to the point of making it structurally insufficient. Demand is strong, land exists: rules block. Ezra Klein and Derek Thompson argue in Abundance (2025) that shortages in the pillars essential to a good life result from artificial scarcities induced by poorly oriented policies, chosen for political and institutional reasons [19].
France is among the developed countries where the fragmentation of administrative powers over housing is strongest, according to the OECD in its 2021 report [16]. Urban planning competence is scattered among different administrations, which generates cost and legal risk and hampers the act of building [17].
The Huwart law simplifying urban planning and housing law, adopted in October 2025, constitutes a first step [20]. It establishes a mechanism for crystallizing urban planning rules applicable to amended permits. A permit application can no longer be rejected on the basis of rules introduced after the initial permit was issued. But according to the legislators themselves, this text was drawn too narrowly to address the true urgencies [20].
Real estate taxation further weighs on the equation. Housing aid totaled 43.1 billion euros in 2024, of which 27.2 billion in direct aid and 15.9 billion in taxes foregone by the state [6]. In countries where supply elasticity is low, tax advantages for homeowners capitalize into prices rather than improve access, according to the OECD [16]. French policy has locked itself into this circle: demand-side aid that capitalizes into prices, without lifting the blockages on the supply side.
A housing stock to build for three simultaneous crises
French housing must face three structural shifts at once that current policy treats separately. All three call for the same response: increase and adapt supply.
The first shift is thermal. About 3.9 million principal residences were classified F or G on the energy performance certification at January 1, 2025, or 12.7 percent of the stock [12]. France counted 5.4 million energy-inefficient properties broadly defined, down 400,000 from 2024 [12].
This reduction stems in part from calculation adjustments. About 160,000 homes left the energy-inefficient category solely due to a threshold update from July 2024, without any actual work [13]. The climate objective—removing class G by 2025, then F by 2028 and E by 2034—risks aggravating pressure on rental supply without parallel reform of renovation financing.
The second shift is demographic. One person in five is over 60 in France today [14]. That figure will rise to one in three by 2060. Only 6 percent of homes currently meet expectations for aging in place [15].
To reach official independent living targets, 2.3 million homes should be adapted over the decade 2024–2033 [15]. The planned ramp-up runs from 100,000 adaptations in 2024 to 230,000 per year by 2030. This undertaking exceeds 80 percent the existing stock, not new construction, which requires a large-scale renovation-adaptation strategy.
The third shift is geographic. Price correction in major cities and growing attractiveness of mid-sized territories has redistributed demand since 2021 [2]. The social housing stock, rigid by design, does not adapt to this mobility. Owner-occupants are significantly less mobile than renters, which directly slows labor market flexibility, according to the OECD [16]. A stock locked in its uses, locations, and beneficiaries aggravates this effect.
Enforceable building rights or preserved scarcity rent
The causal chain is as follows. Housing demand is structurally sustained: demographics, household separation, aging. Supply is structurally compressed: standards, taxation, legal challenges, poorly calibrated land artificialization.
Demand-side aid capitalizes into prices rather than improving access. Adding more demand-side aid would reproduce this mechanism. Acting on supply first is the only entry point consistent with this logic.
The architectural choice for 2027 is to codify into law enforceable building rights in tight markets. This concretely means: bringing permit review time down to twelve months maximum with deemed approval, and limiting abusive challenges to issued permits [19]. The Huwart law of November 2025, limited to nineteen articles, falls well short of this scope [20]. This choice makes sustainable construction revival possible. It closes the scarcity rent from which current owners benefit in tight markets, and requires accepting increased pressure on local officials who control urban plans.
French real estate taxation is the highest in the OECD in 2021 [16]. It weighs directly on the act of building. A complete overhaul of transfer duties and new construction taxes is consistent with the supply objective. It requires compensating local authorities for lost revenue, which opens debate on local taxation.
Part of the 43.1 billion euros in housing aid should shift toward financing thermal renovation with real performance gains [6]. Performance measurement would be based on actual consumption before and after work, not on DPE reclassification. Part should also go toward adapting the stock to aging. These investments condition the long-term viability of supply.
Social housing, lastly, counts nearly 72 percent of French households among those who would meet the eligibility criteria, according to the Court of Auditors [21]. Resource ceilings this broad, coupled with low mobility within the stock, concentrate scarcity on those who need it most. Refocusing the stock on the most modest households, with mechanisms for gradual exit, would free up allocations without reducing the stock. The tension between 2.87 million applicants in 2025 and 384,000 annual allocations makes this choice unavoidable [10].
Sources
[1] IGEDD (Jacques Friggit), “The price of residential real estate over the long term,” updated file March 2026, https://www.igedd.developpement-durable.gouv.fr/prix-immobilier-evolution-a-long-terme-a1048.html (accessed 13/08/2026).
[2] INSEE, Notaires de France – Groupe ADSN, “In the first quarter of 2025, prices for used homes are rising (+1.0%)”, Rapid Information n° 131, https://www.insee.fr/fr/statistiques/8576105 (accessed 13/08/2026).
[3] INSEE, Notaires de France, “In the fourth quarter of 2024, used home prices are nearly stable (+0.1%)”, Rapid Information n° 48, https://www.insee.fr/fr/statistiques/8379336 (accessed 13/08/2026).
[4] INSEE, “Housing: France, social profile,” SRCV 2023 survey, https://www.insee.fr/fr/statistiques/8242367?sommaire=8242421 (accessed 13/08/2026).
[5] INSEE / SDES, “Housing expenditure: France, social profile,” Housing Account 2024, https://www.insee.fr/fr/statistiques/8612568?sommaire=8612596 (accessed 13/08/2026).
[6] SDES, “Housing Account Report 2024,” November 2025, https://www.statistiques.developpement-durable.gouv.fr/rapport-du-compte-du-logement-2024 (accessed 13/08/2026).
[7] SDES, “Housing construction: results as of end-October 2025,” https://www.statistiques.developpement-durable.gouv.fr/construction-de-logements-resultats-fin-octobre-2025-france-entiere (accessed 13/08/2026).
[8] SDES, “Housing construction: results as of end-November 2025,” https://www.statistiques.developpement-durable.gouv.fr/construction-de-logements-resultats-fin-novembre-2025-france-entiere (accessed 13/08/2026).
[9] USH, “Demand for and allocations of social housing as of end-2024,” USH Statistics n° 1, September 2025, https://www.union-habitat.org/centre-de-ressources/economie-financement/la-demande-et-les-attributions-de-logement-social-fin (accessed 13/08/2026).
[10] USH, “Demand and allocations: situation mid-2025 and outlook,” USH Statistics n° 3, December 2025, https://www.union-habitat.org/centre-de-ressources/economie-financement/la-demande-et-les-attributions-situation-mi-2025-et (accessed 13/08/2026).
[11] DRIHL Île-de-France, “Demand for and allocations of social housing in Île-de-France: 2024 data baseline,” June 2025, https://www.union-habitat.org/centre-de-ressources/habitants-politiques-sociales/demandes-et-attributions-de-logements-sociaux-en (accessed 13/08/2026).
[12] SDES / National Energy Renovation Observatory, DPE data as of January 1, 2025, cited in Lénergéek, “400,000 fewer energy-inefficient homes in 2025,” November 2025, https://lenergeek.com/2025/11/14/logements-passoires-thermiques-dpe/ (accessed 13/08/2026).
[13] Actual Immo, “2025 DPE: is the decline in inefficient properties due to renovations or rules?”, November 2025, https://www.actual-immo.fr/passoires-energetiques-baisse-2025/ (accessed 13/08/2026).
[14] CEREMA, “Housing our seniors: state of the art of a social issue,” https://www.cerema.fr/fr/actualites/loger-nos-seniors-etat-lieux-enjeu-societe (accessed 13/08/2026).
[15] EY / Crédoc / CNAV-Anah, “Adapting homes to population aging,” October 2024, https://www.ey.com/fr_fr/insights/government-public-sector/l-adaptation-des-logements-au-vieillissement-de-la-population (accessed 13/08/2026).
[16] OECD, “Building for a Better Tomorrow: Policies to Make Housing More Affordable,” 2021, https://www.oecd.org/content/dam/oecd/fr/publications/reports/2021/01/building-for-a-better-tomorrow-policies-to-make-housing-more-affordable_51f68a86/9ec4a6c7-fr.pdf (accessed 13/08/2026).
[17] iFRAP, “ZAN, PLU, SRU: these norms that poison building permits,” October 2024, https://www.ifrap.org/emploi-et-politiques-sociales/zan-plu-sru-ces-normes-qui-empoisonnent-les-permis-de-construire (accessed 13/08/2026).
[18] Fipeco (François Ecalle), “Housing policy,” https://www.fipeco.fr/fiche/La-politique-du-logement (accessed 13/08/2026).
[19] Ezra Klein and Derek Thompson, Abundance, Avid Reader Press / Simon & Schuster, March 2025, https://en.wikipedia.org/wiki/Abundance_(Klein_and_Thompson_book) (accessed 13/08/2026).
[20] Law no. 2025-1129 of November 26, 2025 simplifying urban planning and housing law; Constitutional Council, decision no. 2025-896 DC of November 20, 2025, https://www.conseil-constitutionnel.fr/decision/2025/2025896DC.htm (accessed 13/08/2026).
[21] Court of Auditors, report on housing benefits, 2020, https://www.ccomptes.fr/system/files/2020-02/20200225-02-TomeI-aides-personnelles-logement_0.pdf (accessed 13/08/2026).
