The French government recently passed a tax measure aimed at encouraging the transformation of vacant offices into housing in Paris. Over 800,000 square meters of office space in the city are reportedly unoccupied.
New finance laws for 2016 include a tax measure intended to push commercial property owners to convert offices in Paris into housing. Officials estimate that 5% of office space in the city lies vacant — totaling 800,000 square meters.
Repurposing offices as apartments has long met with many difficulties, most of them financial. Thus “only 380,000 square meters of offices were allowed to be converted into housing” over the course of 12 years.
However, the new measure would facilitate office to housing conversion by exempting it from property tax. In each case, this exemption would be subject to a vote by local authorities. Some critics have found that it will take more to motivate investors as the property tax is only a small part of the expenses involved.
As most of these properties will most likely be sold once repurposed into apartments, this exemption would furthermore only benefit buyers rather than current owners. While this may allow owners to find interested buyers more easily, the measure is not yet a guaranteed success, according to Lesclésdumidi.com.
Nonetheless, for elected officials Sandrine Mazetier and Annick Lepetit “such a measure is essential to remedying the housing shortage facing many French cities, and especially Paris.”
Laurent Criado, the author of a real estate advice website, believes that while transforming offices into housing is a laudable intention, “cramming more and more people into the Paris region exacerbates the problem instead of solving it”. According to him, this process only weakens the rest of the country, contributing to economic “desertification in other regions” while failing to effectively address the housing problem in Paris and Île-de-France.
He writes that “it is heartbreaking to see our elected officials stuck in the scheme of Paris centralization” while their efforts could be better spent renovating the hundreds of thousands of homes across the rest of the country that are “waiting to relive”.