This article is part of our “Les focuses de franceinfo” operation, which highlights the most important topics that are rarely covered in the presidential campaign: the cost of housing, the crisis in public hospitals, the taboo on mental health and the environmental footprint of transport.
“Once you’re in gear, you can’t get out.” In a few years, Adrien and his partner, in their early thirties, have acquired no fewer than thirteen properties. The story started with an old house in the Bordeaux region. Adrien is 25 years old, a bac+5 and a good salary in a consultancy. With this resume, “the bank provided loans without too much trouble”, he recalls. This graduate entrepreneur and civil engineer, after ten months of work, cut his house in half and rented it. The “deal” works so well that he decides to try the adventure again. He buys another house, bigger, which he divides this time into six apartments, then a third…
Today, his 13 properties are all rented out and bring him €5,600 a month, two-thirds of which goes towards repaying his half-million-euro loan. “I create a heritage”, welcomes the young man. Like Adrien and his partner, one million French households are “maxi-owners”, i.e. several owners who own at least five homes, according to the iNational Institute of Statistics and Economic Studies (INSEE)†
And if they represent only 3.5% of households, they alone own half of the homes that individuals rent in France (excluding the 6.7 million homes owned by HLM companies or private companies). A high concentration of real estate raising questions as inequalities increase and access to real estate has been reduced for two decades.
In November 2021, Insee foot in the saucer. In her social portrait of France, a comment attracts attention: 24% of households own 68% of the homes owned by private individuals, she announces. “This study has made it possible to get away from the image of the small French owner. Of course it is, but in reality the ownership is extremely concentrated at the top of the wealth distribution”analyzes Pierre Madec, economist at the OFCE.
To arrive at this shocking figure, INSEE went through tax records, land records but also commercial registers to count civil real estate corporations (SCI), which are very popular with “maxi owners”. For example, more than 30 million private homes have been examined. “The Work of a Benedictine”greetings the economist Etienne Wasmer, author of Great return of the country in heritage (ed. Odile Jacob).
“We had suspected for several years that wealth growth and its inequality were strongly driven by real estate. Now the data bears witness to it.”Etienne Wasmer, economist
This real estate concentration is even more striking in large cities. Along the Faubourg Saint-Honoré, in the very chic 8th arrondissement of Paris, more than three quarters of the real estate is owned by “maxi owners”. This share is also over 60% in certain areas of Saint-Germain-des-Prés, around the Champs-Élysées and Place de la Concorde.
Other major cities experience the same phenomenon. For example, most of the properties on the Lyon peninsula, in Old Lille, the hypercentre of Toulouse or even in the Old Port of Marseille are owned by a handful of investors.
From the third home, real estate is essentially rented out, INSEE notes. “When I saw that 3.5% of households owned half the rental stock, I was stunnedsays Emmanuel Trouillard, geographer and researcher at the Institute of the Paris Region. Together, no one has any interest in that. sexcept for the 3.5% of maxi owners.”
But who is hiding behind these million multi-family households? INSEE has made a composite portrait of it. “These are older people than the general population, who are more of a couple and well off”, explains Mathias André of the Institute’s economic studies department. Jean-Michel* ticks all the boxes. This pensioner owns five properties near Grenoble, acquired over the course of his life. “I was born in the right country, at the right time”, recognizes this former teacher. The rents on his property add 1,400 euros a month to the 3,500 euros in pensions the couple receives each month.
“We are well aware that we are on the sunny side of the street.”Jean-Michel, maxi owner,
This is also the case with Lionel*, an architect from Saint-Etienne who spent his entire life buying entire buildings to restore and rent them out. “I came up with about fifty apartments”he calculates. Marie* and her supervisor are satisfied with about fifteen rental properties. “We are both engineers, we deserve a very good life and we had an inheritance before the first purchase”says the thirties. With a bank loan and a good return on investment, the couple can “I didn’t have to eat pasta” to build their wealth.
Unsurprisingly, these investors are indeed among the wealthiest households in the population. “You must have built up sufficient income and capital in your life to be a multi-owner”, Mathias André specifies. For example, 42% of the households of the richest 0.1% own at least five homes.
And this trend will continue to grow. Since the 2000s, family assistance has played an increasingly important role in acquiring property. Four in ten owners have benefited from this, according to INSEE. “My father’s inheritance was used to pay the notary fees of my first three apartments”, explains Ibrahim*. After this boost, the quadra has chained acquisitions and now has seven properties in a small town in central France, all leased. ‘And I intend to continue to fifteen apartments’he blurts out.
In the course of these purchases, the heritage logic often gives way to a financial logic. “Since the early 2000s, real estate has been integrated into portfolio diversification, in the same way as stocks in the stock market”† explains Virginie Monvoisin, professor at the Grenoble School of Management and member of the association Les Economistes atterrés† “We professionalize”, confirms Adrien, “maxi owner” near Bordeaux. The latter has completely dropped his CDI in order to devote himself fully to real estate management and advice.
Like him, more and more professionals support real estate investors. “We have democratized this market and I believe we can benefit from bringing additional properties to rent,” welcomes Manuel Ravier, co-founder of rental investments. His advice videos have been viewed several million times on YouTube. “People understood that there was an opportunity. Now we support young professionals, surgeons or even football players”sums up the entrepreneur.
But, according to some experts, this concentration and financialization of real estate also has detrimental effects on access to housing. “It is very bad for first-time buyers and for homeowners. These are houses that are not for sale”, regrets Emmanuel Trouillard. Rents can also tend to skyrocket. “We see a very clear correlation between non-compliance with rent controls and the neighborhoods where the most multi-owners are”notes Clara Wolf, economist for the site bestagents.com. This is especially the case in the 2nd arrondissement of Lyon and in the center of Paris.
“The profits from their rent allow multiple owners to finance their property purchases. It’s a vicious circle for them, but a vicious circle for the community.”Emmanuel Trouillard, geographer
Once in the hands of “maxi owners”, these accommodations can also leave the traditional rental circuit. “These households are in a net return logic and try to maximize rents as long as they meet a demand”, explains economist Clara Wolf. With a new easily accessible and very juicy outlet: short-term rental for tourists. For example, in the 8th arrondissement of Paris, 56% of Airbnb renters have multiple listings on the site, while the Paris average is less than 30%, according to data from the site InsideAirbnb.com.
Faced with this trend, the Abbé-Pierre Foundation is sounding the alarm. “This concentration accentuates the increasing inequalitywarns the director general Christopher Robert. Due to the high housing costs, a large part of the population experiences great difficulties, either in finding a rental property near their work, either to leave his parents’ house or to gain access to real estate.” The foundation has also put a number of ideas on the table to try to improve the distribution of real estate. For example, it advocates higher taxes on capital gains and evolving notary fees depending on the price of the property.
“From six apartments, the property tax should increase considerably. As it stands now, that is not a deterrent at all.”Emmanuel Trouillard, geographer
Some presidential candidates are also calling for action. Jean-Luc Mélenchon thus proposes: “imposing high real estate transactions through a progressive tax”† Anne Hidalgo wants to create “public land” to prevent speculation. The main candidates on the left want to tackle the effects of this concentration by regulating rents more strictly, in “tense areas” for Yannick Jadot and Anne Hidalgo and throughout the territory for Jean-Luc Mélenchon and Fabien Roussel.
“France has a huge land reserve that is taxed a lot. This may be where we should look to maintain an efficient and fair model.”Etienne Wasmer, economist
But some “maxi owners” are already anticipating less favorable taxes. “I’m moving out of real estate because it’s getting too taxed”, whispers a fifty-year-old from Nantes who has just sold one of his five apartments. This is the complexity of the subject, according to the Abbé-Pierre Foundation. “People who invest in stone instead of the stock market need their own rental home”acknowledges Christophe Robert. But we cannot allow a jungle to develop around these investments. We need to regulate more, because housing has a strong impact on the health, purchasing power and the lives of our fellow citizens.
*Name has been changed.