Rent Control in France

January 10, 1949

In this column of Feb. 2, 1948, I cited the rent-control situation in France as an example of the future we ourselves are heading for unless we begin quickly to work our way back to freedom. The Foundation for Economic Education at Irvington, N. Y., has now published a pamphlet by an eminent French writer, Bertrand de Jouvenel, explaining in detail the situation to which rent control in France has led. Here are his main facts:

A dollar a month will pay a wage earner’s rent in Paris. (All figures are stated in dollars at roughly 300 francs to the dollar.) Rent on the average makes up 1.4 percent of the French wage earner’s expenses. A month’s rent for a family of six costs no more than eleven packages of cigarettes. Even rents paid by important officials or executives are no more than $4 to $10 a month. Parisians spend on shows every month far more than they pay for three months’ rent.

This may seem desirable for tenants lucky enough to be in possession. Those in search of lodgings, however, cannot legally find them at any price. There are no vacancies. Deaths are the only opportunity. Tottering old people out to sun themselves in public gardens will be shadowed back to their flat by an eager young wife who will strike a bargain with the janitor to be warned first when the death occurs. Buying one’s way into an apartment costs anywhere from $500 to $1,500 a room.

As a result of these fantastically low rents no new lodgings are being built. Practically none have been built, in fact, for the last twelve years. Of the 84,000 buildings for habitation in Paris, 27 percent are more than 98 years old. Almost 90 percent were built before the first world war.

Even a very lenient officialdom estimates that there are about 16,000 buildings in such disrepair that there is nothing else to do but pull them down. A fifth of the Paris population does not even have running water in their lodgings. More than half the population must go out of their lodgings to find a lavatory. More than four-fifths of the population have no bath or shower. Disrepair constantly increases. Owners are not in a financial position to allow them to keep up their buildings, let alone improve them. Their expenses commonly exceed their income. In fact, while rents since 1914 have been at the outside multiplied less than seven times, taxes have been multiplied thirteen times and the cost of repairs has been multiplied from 120 to 150 times. “An outsider,” comments M. de Jouvenel, “may be tempted to think that only an incredible amount of folly can have led us to this. But it is not so. We got there by easy, almost unnoticed stages, slipping down the gentle slope of rent control.” A fantastically complicated new rent law went into effect the first of this year, but it is unlikely to change the basic situation.

New houses put up in France today are legally free from rent ceilings. Why aren’t they being built? There are two main reasons. New apartments would have to rent for prices representing from ten to thirteen times present rent ceilings, in order to repay the costs of construction and reward the capital invested. But it would be psychologically impossible to find customers at these rents, when it is still possible for them to double up (at great inconvenience, of course) at less than one tenth these figures.

Moreover, those who had been foolish enough to trust the government before the second world war by putting up new apartments exempted from the then-existing rent control now find these buildings also subject to rent ceilings. They are not allowed to get in terms of real income a tenth of what they got in 1939. Prospective housing investors have no assurance that they will not be fooled again.

In sum, such is now the spread between the legal and the economic price of lodgings in France that “even the most fervent advocates of freedom are scared at the prospect of a return to freedom. . . . Rent control is self-perpetuating and culminates in both the physical ruin of housing and the legal dispossession of the owners. . . . The havoc wrought here is not the work of the enemy but of our own measures.”