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How Duflot law pushes cities to build more housing

June 11 category:Economy
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How Duflot law pushes cities to build more housing

A construction site of new homes and office buildings in Marseille.

REUTERS / Jean-Paul Pelissier

The "general mobilization for housing construction" is declared. In any case the title of the bill introduced Wednesday by the Cabinet by the Minister of housing Cécile Duflot. If the overall goal is to reach 500,000 dwellings built in France every year, it is particularly insist on social housing to make it out of the ground 150,000 per year against 131,500 in 2010. To do this, the project law, to be discussed next week in the Senate, wields the carrot and the stick.

Incentives side, it should enable the State and public institutions to assign, possibly free, 930 vacant lots totaling 2,000 hectares throughout France. What potentially achieve 110,000 public and private housing by 2016. So far, the state could sell with a discount of 35% maximum. The measure aims to stop inflation in land prices which represents between 14% and 24% of the cost of a social housing operation. Free transfer to local authorities responsible for the implementation of the construction with the housing agencies and the private sector, will be granted if the proposed program includes only social housing.

Side sanctions, the bill significantly hardens the SRU (Solidarity and Urban Renewal), passed in 2000 under the Jospin government, which introduced a minimum rate of social housing in municipalities. For efficiency, the new text is now varied objectives and potential sanctions according to the characteristics of the territories.

The new device door effect of 20% to 25% the rate of social housing in towns with more than 3,500 inhabitants (1500 in Ile-de-France), where tensions are high. But the cities where there is no need - that is to say where demographics are not increasing and the times for social housing are short - will not be affected: the objective of 20% will be retained therein.

However, the penalties for cities that do not meet these rates are increased. The fine will be multiplied by five and a ceiling for increased penalties: it will increase from 5 to 10% of the actual operating expenses in the richest cities.

Today, of the approximately 1,000 municipalities of metropolitan France which do not reach the 20% rate, 927 are subject to the SRU. One third has less than 5% of social housing and 354 have been sentenced penalties estimated at € 68 million for 2012. But expenditures in favor of social housing may be deducted which should bring the total to 23, 5 million.

The free assignment, "stuffing" expensive?

The former Minister of Housing Benoist Appeared UMP was said Wednesday in favor of the increase from 20 to 25% of social housing under the draft law Duflot. He calls the other hand the "farce" cost free disposal of state land to boost construction. According to the former Minister Nicolas Sarkozy, "with Bercy (Ministry of Economy) as the sole driver for the sale of land, it will take a lot of time" and "it would be skillful to transfer this power directly to the Department Equal territories and Housing "Ms. Duflot.

According Najat Vallaud-Belkacem, the measures announced Wednesday would "bring more to the state than they cost him" generating "revenue through VAT, for the jobs created" and an increase in activity in the construction sector .

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