In 2026, 40% of first-time buyers purchase their first home with money from their parents, compared to 20% in 2002 [14]. Salary alone is no longer enough. And the 27.2 billion euros in annual public housing subsidies [9][10][11] have failed to correct the problem: distributed to help buyers access a market that is too narrow, they have mainly supported prices. The trade-off that 2027 can no longer avoid is this one: continue funding demand in an insufficiently competitive market, or reform zoning, tax land capital, and redirect these billions toward construction.

Fifty-five percent above the long-term trend, and a correction too timid to change trajectory

The mechanism is well known. Interest rates fell continuously from 1995 to 2021. Households could borrow more without increasing their monthly payments. Prices followed the rise in borrowing power, far beyond incomes [1][2][3]. In a market where supply cannot adjust freely, monetary policy becomes a rent for existing homeowners.

In the fourth quarter of 2024, the Notaires-INSEE index of used housing prices, measured against household income, exceeded by 55% the trend followed between 1965 and 2001 [1]. This gap had barely budged since 2007. The rise in rates from 2022 onward did begin a correction, but it did not bring prices back to their historical range.

This national average masks very different realities. In 2022, the share of income that tenants in the free-market sector devoted to their rent, net of subsidies, averaged 28.2% [4][5]. For the quarter of these tenants with the lowest incomes, this figure rose to 44.7% [4][5].

Nearly half of disposable income absorbed by rent, and subsidies do not correct the mechanism that produces this outcome. Across all statuses, the 25% of households with the most modest means devoted 34% of their income to housing in 2022. Between 2019 and 2022, the pressure increased by 1.3 percentage points for free-market sector tenants and even more for the most modest households [4][5].

International comparison places France in a particular situation. Between 2019 and 2024, real housing prices rose in almost all OECD countries, except in seven of them, including France, Germany, Italy, and Sweden [15]. France thus experienced a slight decline in real prices since the pandemic. But this decline starts from a level that already far exceeded incomes by 2007, and this gap has not been resorbed in sixteen years [1].

The 253,000 housing starts in 2024, at a floor unseen since 1954

The rise in rates from 2022 onward revealed what cheap money had masked. Banks lend less, construction sites are not moving forward, and home ownership has collapsed.

The decline in construction is without recent precedent. After a 24.9% decline in 2023, housing starts fell another 14.2% in 2024 [7][8]. They reached 253,000 units, a floor not seen since 1954. In May 2025, the trend continued. Compared to the pre-pandemic period, homes started showed a 37% decline according to data adjusted for seasonal variations and working days [8].

This contraction in new supply is occurring at the precise moment when latent demand is accumulating. France has approximately 38 million homes for some 30 million households, but the geography of employment and that of available stock no longer overlap [7]. In zones where jobs are concentrated, the deficit of affordable housing is structural, and the gap between homes built and estimated needs has been widening for several cycles.

A second pressure is added. Since January 1, 2025, homes classified as G on the energy performance diagnosis—the most energy-intensive—are prohibited from being rented [6]. Homes classified as F will follow in 2028, then E in 2034.

The immediate effect is a further reduction in rental supply, precisely in the cheapest segment of the market. In 2025, energy-inefficient homes were selling at an average discount of 15%, or 452 euros per square meter less than a home classified as D [6]. For a modest tenant without access to social housing, the withdrawal of energy-inefficient properties from the rental market reduces their choice without offering an affordable alternative.

The two phenomena act together. The collapse of new construction compresses supply from above, and the withdrawal of energy-inefficient properties compresses it from below.

Home ownership become a birth lottery, and subsidies that support demand without correcting supply

The dominant political response for thirty years has been to support demand. Personal housing allowances, zero-rate loans, rental investment schemes such as Pinel or Scellier. In 2024, housing subsidies excluding tax benefits amount to 27.2 billion euros [9][10][11]. Tax breaks that the state foregoes for the benefit of the housing sector represent an additional 15.9 billion euros [9][10][11]. The state’s contribution to the National Housing Aid Fund alone reaches 13.9 billion euros [9][10][11].

When supply is rigid, any subsidy to demand is mechanically transformed into a price increase. The tenant does not pay more because the aid compensates their share, but the landlord receives a higher rent than they could otherwise demand. The Court of Auditors identified this mechanism as early as 2015, noting that personal housing allowances leave persistent factors of inequality and inefficiency.

The consequences are visible in home ownership figures. The average age of first-time buyers reached 36.5 years in the first quarter of 2026 [14]. First-time buyers have higher incomes than before, which means in reverse that modest-income households are more often excluded. The average down payment is falling, due to strained savings, even as banks demand a larger down payment [14].

The primary determining factor for becoming a homeowner is having parents who are themselves homeowners, ahead of salary level and education [12]. The link between inheritances and real estate investments is stronger when the recipient of the transfer is young. The price increases of the 2000s strengthened this link between family donations and home purchases [13].

The phenomenon known as NIMBYism ranks among the structural causes of supply rigidity. By artificially restricting construction in the most sought-after zones, near jobs and on coastlines, it directly contributed to housing price increases over the past three decades [16]. This phenomenon intensified in France from the 2000s onward and became widespread in most tight markets.

The contemporary crisis of democracies stems, in part, from a chronic inability to produce. Ezra Klein and Derek Thompson, in Abundance (2025), argue that a dual movement of regulatory simplification and massive investments is the first condition for any housing access policy [17]. Their diagnosis formulated for the United States applies to France: reform zoning and permits, before any other measure.

Changing the basis and allocation of public aid, the architectural choice for 2027

Removing barriers to construction in tight markets is the entry condition. Constrained supply is documented [1][7]. The response is to lift regulatory blockages in agglomerations where employment concentrates demand, not to build in slack zones where no one wants to settle. The sequencing is common across the three housing stories of this series: supply first, regulation over a growing stock, then rotation and reorientation of housing allowances.

This requires a reform of zoning rules that give municipalities systematic veto power over densification, an acceleration of permit processing times, and a limitation of dilatory appeals against projects. Regulatory capture by constituted interests produces rents at the expense of consumers [20]. The tight-market land market is a direct illustration: established property owners structurally benefit from the scarcity they help maintain.

Redirecting land taxation from holding to mobilization is the second lever. Land value captures the surplus produced by the community—jobs, transport, facilities—without any return for non-owners. Higher taxation on holding means indexing property tax to real market value and taxing unrealized gains at the time of sale. Easing taxation on transactions would put land back into circulation. Fiscal distortions favoring capital over labor feed the structural inequalities of advanced economies, and the housing market is one of the most legible expressions of this [19].

Making public aid an instrument of supply is the third requirement. The 27.2 billion euros in housing subsidies excluding tax benefits represents real room for maneuver in 2024 [9][10][11]. A portion redirected toward the production of affordable housing, the financing of intermediate rental supply, or public land mobilized for gradual homeownership operations corrects the mechanism rather than its symptoms.

The objective is to cease increasing personal aid to compensate for a shortage that policy itself maintains. Mariana Mazzucato [18] formulates this reversal in architectural terms: the state co-creates value instead of redistributing the rents that the market has generated. Applied to housing, this means building, financing, and establishing new types of operators rather than endlessly expanding demand in an unregulated market.

Accelerating thermal renovation without removing accessible supply is the fourth requirement. The progressive ban on renting energy-inefficient properties is justified by climate objectives. But its timeline must be accompanied by sufficient financing of renovation for modest landlords. Without this, properties leaving the rental market will not be replaced, and the most vulnerable tenants will lose their only affordable options.

What this trade-off closes is clear: it ends the growth of personal aid as an adjustment variable. What it opens is equally clear: a society in which access to housing depends on work rather than inheritance. The 15.9 billion euros in tax benefits granted to the housing sector in 2024 constitute precisely the room for maneuver to redirect toward supply what today finances demand in an insufficiently competitive market [9][10][11].

Sources

[1] IGEDD (Jacques Friggit), “Housing Real Estate Prices Over the Long Term,” updated March 2026, https://www.igedd.developpement-durable.gouv.fr/prix-immobilier-evolution-a-long-terme-a1048.html (accessed 09/08/2026).

[2] IGEDD (Jacques Friggit), “Rents, Housing Prices and Income Per Household Since the 1960s,” hearing note, Senate information mission on the housing crisis, January 2024, https://www.igedd.developpement-durable.gouv.fr/janvier-2025-a4119.html (accessed 09/08/2026).

[3] IGEDD (Jacques Friggit), “Rents, Housing Prices and Income Per Household Over the Long Term (March 2025),” quarterly update, https://www.igedd.developpement-durable.gouv.fr/mars-2025-a4153.html (accessed 09/08/2026).

[4] INSEE, “Housing,” in France, Social Portrait, 2024 edition, SRCV 2023 data, https://www.insee.fr/fr/statistiques/8242367?sommaire=8242421 (accessed 09/08/2026).

[5] INSEE, Household Income and Wealth, 2024 edition, https://www.insee.fr/fr/statistiques/7941429?sommaire=7941491 (accessed 09/08/2026).

[6] ANIL, “Accessing Homeownership in the Housing Crisis Era,” ADIL 94 study, April 2025, https://www.adil94.org/wp-content/uploads/2025/04/2025-Etude-accession.pdf (accessed 09/08/2026).

[7] French Building Federation (FFB), “2024 Assessment and 2025 Forecasts in Building,” January 2025, https://www.ffbatiment.fr/actualites-batiment/actualite-ba/bilan-2024-et-previsions-2025-batiment (accessed 09/08/2026).

[8] Ministry of Housing/SDES, statistics on housing starts and building permits, SA-CJO series, May 2025, https://www.statistiques.developpement-durable.gouv.fr/logement (accessed 09/08/2026).

[9] Fipeco (François Ecalle), “Housing Policy,” 2024 thematic sheet, https://www.fipeco.fr/fiche/La-politique-du-logement (accessed 09/08/2026).

[10] Ministry of Budget, program 109 “Housing Access Aid,” Draft Budget Law 2024, https://www.budget.gouv.fr/files/uploads/extract/2024/PLF/BG/PGM/109/FR_2024_PLF_BG_PGM_109_JPE.html (accessed 09/08/2026).

[11] DREES, “Housing Subsidies,” in Minimum Income and Social Benefits, 2024 edition, sheet 35, https://drees.solidarites-sante.gouv.fr/sites/default/files/2024-10/MS24%20-%20Fiche%2035%20-%20Les%20aides%20au%20logement.pdf (accessed 09/08/2026).

[12] Banque de France, study on determinants of homeownership, cited in N. Jeffs / Presse Agence, “Real Estate in Paris: Homeownership Access, a Matter of Inheritance,” July 2026, https://presseagence.fr/paris-nicolas-jeffs-lacces-a-la-propriete-creuse-un-fosse-social-et-generationnel/ (accessed 09/08/2026).

[13] INSEE, “Wealth Inequalities Between Generations,” Economics and Statistics, no. 472, https://www.insee.fr/fr/statistiques/fichier/1377767/ES472D.pdf (accessed 09/08/2026).

[14] Empruntis, annual study on first-time buyers, Q1 2026, relayed by Franceinfo, “Real Estate: Obstacles and Levers for First-Time Buyers,” April 2026, https://www.franceinfo.fr/replay-radio/info-immobilier/immobilier-les-freins-et-les-leviers-des-primo-accedants_7939949.html (accessed 09/08/2026).

[15] OECD, Analytical House Price Database / Affordable Housing Database HM1.2, updated July 2025, https://webfs.oecd.org/els-com/Affordable_Housing_Database/HM1-2-Housing-prices.pdf (accessed 09/08/2026).

[16] Institut Paris Région, “Home Ownership, Increasingly Reserved for Wealthy Households,” 2020, https://www.institutparisregion.fr/nos-travaux/publications/laccession-a-la-propriete-de-plus-en-plus-reservee-aux-menages-aises/ (accessed 09/08/2026).

[17] Ezra Klein and Derek Thompson, Abundance, Avid Reader Press/Simon & Schuster, March 2025; French translation, Éditions Arpa, 2026.

[18] Mariana Mazzucato, The Common Good Economy, 2026, https://marianamazzucato.com/books/the-common-good-economy/ (accessed 09/08/2026).

[19] Dani Rodrik, Shared Prosperity in a Fractured World, 2025, https://drodrik.scholars.harvard.edu/publications (accessed 09/08/2026).

[20] Thomas Philippon, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, Princeton University Press, 2022.