A series of housing projects in Paris have already put a dent in the “too-expensive” perception. Like the 15 housing units on Rue Pradier in Paris by MAO Architectes, or the 17 social housing units on Rue Oberkampf by Barrault-Pressacco architects. Both were delivered as mainstream housing rather than high-end commissions.

But what if the advantage of load-bearing stone walls was less in the monetary price and more in the carbon saving?

What Counts as Massive Stone

A French architect colleague introduced me to the work of Gilles Perraudin over ten years ago. I was amazed at the beauty and simplicity of his buildings built purely out of massive stone blocks. I did wonder at the lack of insulation, but we’ll get to that in a later article.

The wave of 10- to 130-unit Paris-region schemes of recent years (Félix-Faure, Jean-Bart, Cévennes, Versailles rue des Chantiers, Triangle École-Évangile, Rosny-sous-Bois) consists overwhelmingly of composite self-supporting stone facades tied to a concrete or steel frame, rather than pure load-bearing masonry.

This article is about masonry construction where stone is stacked so each course bears on the one below. This can be the fully load-bearing approach associated with Perraudin, or the self-supporting stone facades tied to a supporting frame. Stone cladding as a rainscreen is not in this scope.

Where Stone Wins: Carbon

The case for load-bearing stone is made in a 2023 paper by de Toldi and Pestre. The paper was based on a study of French environmental product declarations (EPDs) with reference to the dynamic life cycle analysis required by the RE2020 building-carbon regulation. De Toldi and Pestre’s model found that cut-stone load-bearing walls generate 18.08kg CO2e/m², roughly 1.43 times better than cross-laminated timber (CLT) and 2.73 times better than slag concrete. These figures assume the industry-average wall thicknesses of 13, 20 and 24 cm for CLT, concrete and stone respectively.

Stone’s carbon competitor is timber. How far stone beats CLT depends on the method used to count the carbon a tree stores as it grows.

• Under the RE2020 regulatory convention, which credits that carbon up front, timber is counted as carbon-negative and beats stone.

• Under Levasseur’s dynamic method, which instead credits stored carbon gradually as the replacement tree regrows, stone comes out roughly 1.43 and 3.62 times better than timber, depending on the tree-growth model assumed and the building lifespan used.

Whichever method is used, stone’s own figure barely moves, while timber’s swings from best to worst.

Transport makes or breaks the carbon advantage of stone. The de Toldi and Pestre paper assumes an average quarry-to-site distance of 60 km nationally. At that distance, haulage is only about 12 per cent of a stone wall’s embodied carbon; stretch that to around 580 km and the wall’s total embodied impact doubles, with transport rising to 56 per cent of it. The low-carbon case therefore depends on local sourcing.

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The Processing Advantage

The thickness of stone is a plus point. Thin decorative stone has a higher carbon footprint, with more processing per unit volume. A thicker slab will spread a given level of processing across a greater volume. An earlier ETH Zurich study (Ioannidou et al., 2014) found thicker massive assemblies to have roughly a third of the carbon footprint per square metre of thin stone products.

Another point in its favour is the fact that stone is quarried, not manufactured. It’s mechanically shaped rather than chemically synthesised. De Toldi and Pestre put the carbon impact of cut stone about 2.7 times below slag concrete, at industry-standard wall thicknesses. A stone-sector presentation drawing on INIES data makes the gap look starker still, charting a massive stone wall at roughly half the embodied carbon of a reinforced-concrete wall, around 20 against 41 kg CO2e/m², though there a 40cm stone wall is set against a 20cm concrete wall, so treat it as indicative rather than a like-for-like contrast.

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The Premium, Examined

Fully load-bearing stone buildings are the exception. The self-supporting facade, by contrast, is a genuine mainstream option. The built pipeline of recent years consists overwhelmingly of self-supporting or hybrid facades on concrete or steel frames. That distinction matters for cost, because that facade choice is also the cheaper to build and, as we will see, the easier one to insure.

The sharper premium applies to the fully load-bearing approach. Supply is not the constraint: one regional estimate suggests Paris Basin quarries alone could already furnish enough stone each year for 6,000 to 9,000 dwellings in self-supporting facades, a point the supply-base article takes up.

As for the cost premium itself, a rare publicly cited figure comes from the president of the SNROC, the building-stone trade body, who puts the extra cost of a stone building over an equivalent concrete one at 6 to 10 per cent. Read it as a whole-building figure rather than the stone element alone.

The Insurance Question

Where does that premium come from? A large part of it is the insurance regime that applies to buildings, and their designers and builders, rather than the cost at the quarry gate or the shortage of specialist masons.

To provide the ten-year liability cover that’s required for French building, insurers typically only provide standard cover for standard building methods (techniques courantes). A fully load-bearing massive-stone system, with large blocks, thin joints and no concrete ring-beam, largely falls outside these. That places it in non-standard territory (technique non courante).

Non-standard building techniques must be declared to the insurer in advance, triggering a bespoke risk assessment and usually a higher premium loading.

There are two main ways to reach standard rates. A favourable ATEx, an assessment by the French building science centre, the CSTB, can let the technique be treated as standard. Alternatively, a project-specific quality plan overseen by the Centre Technique de Matériaux Naturels de Construction can satisfy the insurer without the technique itself being reclassified. The latter is the path taken at Barrault-Pressacco’s Oberkampf.

It is worth adding that these routes are not free. An ATEx carries CSTB assessment and testing costs, and a quality plan carries its own testing and consultancy fees. So while they keep the insurance premium at standard rates, they move part of the cost upstream rather than removing it. That’s one reason why a stone project can still carry a cost premium even when it is insured on standard terms.

During August, I’ll be publishing three more articles on load-bearing stone in French construction: on the industry base, the structural system, and technical issues such as insulation and more on the insurability question.

According to the Ministry for the Ecologic Transition, in 2022 the French building sector represented 43% of annual energy consumption. It generated 23% of French greenhouse gas (GHG) emissions.

There’s another widespread negative impact of construction that GHG reduction doesn’t address: biodiversity loss.

According to the World Wildlife Fund, biodiversity keeps ecosystems stable and resilient. It supports food security, access to clean air and water, and protection from natural disasters.

The construction industry contributes to biodiversity loss through the destruction of habitats and land take (artificialisation des sols). Land take is defined in French law as the durable impairment of a soil’s ecological functions and its agronomic potential.

France’s national biodiversity strategy 2030, published in 2023, lists five pressures on biodiversity. Construction contributes to three of them: destruction and impairment of natural environments, climate change, and pollution.

As for action, reducing land take is a key measure. The strategy commits to capping total land consumption at 120,000 hectares over the 2021–2031 decade. That’s roughly one tenth of the Île-de-France region around Paris. This is part of the goal to cut in half the consumption of natural, agricultural, and forest land by 2030.

How does the French urban planning system implement net zero for biodiversity by 2050? We have to go back to 2019, when France held a Citizen Convention for the Climate. 150 citizens convened over a year, debating and then agreeing on 149 recommendations to protect the climate. One of their objectives was:

“Tackling land take and urban sprawl by making life in towns and villages attractive.”

The vast majority of recommendations made their way into a Climate and Resilience law passed in 2021. The law commits France to the absence of any net land take by 2050, a goal known as Zéro artificialisation nette (zero net land take). The 2050 target is supported by intermediate targets for each decade from 2021.

What does it mean?

The ZAN (zero net land take) law limits the extent to which development can take place on natural, agricultural and forest land (ENAF - espaces naturels, agricoles ou forestiers)

The figure to count is the amount of land urbanised in a given local authority area.

As a first step, the law took the national amount urbanised from 2011 to 2021 and legislated that only 50% of that amount could be urbanised from 2021 to 2031.

The amount would reduce further in the following two decades. From 2031 the measure changes from land consumption to net land take, so the 2050 target is a balance between land urbanised and land restored, not an end to building on undeveloped land.

For Bordeaux Métropole, that means a 520-hectare land take allowance to 2031. By 2024, 200 hectares of that had already been consumed.

The Métropole de Lyon had zoned 1,030 hectares as urbanisable (available for development) as of 2023. ZAN would require them to take 450 hectares of that out of the development pipeline by 2040.

How to implement it

When it comes to controlling the rate of urbanisation, France has the advantage of not being a federal state. Unlike the US or Germany, the central government and parliament in Paris can legislate on regional and local land use.

The 2021 law (as updated since) provides for ZAN requirements to be included in regional planning documents, and for local urban plans to be compatible with them. It’s a cascading series of plans that ensures national building limits are reflected in local permitting decisions.

The progressive reduction in net land take between now and 2050 must be reflected in local development plans. This limits the issuing of building permits on land not yet urbanised. It also encourages redevelopment of former industrial sites and wastelands.

This fundamental change in urban planning impacts all sectors of the economy, from the major cities to the smallest municipalities. Local authorities and public representatives at every level are impacted, having to balance local development expectations with biodiversity constraints.

To increase understanding and measure progress, a national observatory provides data and resources on reducing the consumption of natural, agricultural and forest land.

The limits on urbanising land means local authorities have to consider carefully what gets built on available land, and will guard their allowance. So what happens if the state or a national body wants to build a facility in a particular commune? What happens to the mayor’s land-take calculation if the SNCF (the national rail company) wants to develop a rail line, or a government-support foreign investor wants to build a data centre, in their commune?

The ZAN law sets aside a national allowance of 12,500 hectares over the 2021–2031 decade for projects with national importance. This allows strategic projects to go ahead while avoiding conflict over scarce land take allowances.

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Why France can implement ZAN (and others can’t, or less so)

It helps that France is a unitary, not a federal, state. That’s what allows law-makers in Paris to influence land-use in local communes down to the hectare.

Germany has a national target limiting land take: under 30 hectares per day for new settlement and transport by 2030, and net zero by 2050. However, it is non-binding. In Germany, land-use planning is primarily a regional and municipal matter. Compared to France, this makes it harder to implement a mechanism to reduce land take uniformly across Germany.

Likewise the US has no federal land-use competence; planning and zoning are constitutionally reserved to states.

In England, there would have to be a stronger legislative link between national policy and local plan-making, which the government’s own 2025–26 reform trajectory is not pursuing. If anything, English policy is moving toward loosening land-supply constraints (Green Belt release) rather than tightening them.

Switzerland has the closest equivalent to ZAN. Under its revised Spatial Planning Act (2023) cantons face a firm “stabilisation target”: outside designated building zones, the number of buildings and the amount of built-up land can grow by no more than 2% above the 29 September 2023 baseline. If a canton exceeds this limit, any new construction or land take must be offset one-for-one by demolishing buildings or restoring land elsewhere - a compensation system similar in function to ZAN’s land restoration offset.

Is it working?

A 2026 report by Cerema found that consumption of previously undeveloped natural, agricultural, and forest land (ENAF) has shown a downward trend at the national level since 2011. It reported that 2024 marked the lowest calculated level of ENAF consumption recorded since 2011, with 15,119 hectares consumed nationwide.

However, the period since the ZAN law has coincided with construction material cost and interest increases, and a property market downturn. Cerema itself attributes the fall to the cyclical decline in housing and commercial construction starts since 2020. Therefore the extent to which ZAN is responsible for lower ENAF consumption is not clear.

The framework is also under sustained legislative pressure. The TRACE bill, adopted by the Senate in March 2025, would abolish the 2031 milestone and push back the deadlines for regional and local plans. It is still awaiting a first reading in the Assemblée nationale.

Rather than see ZAN is a block on development, it’s worth referring back to the intentions of the Citizen Convention on the Climate. Reduced land take was intended to:

• Take action for biodiversity, the protection of peri-urban forests, and local agriculture; and

• Make city centers more attractive and socially diverse by revitalising businesses and economic activity, while also bringing nature into the urban environment.

PS: if you’d like to view the progression of land take in France over recent decades, check out the aerial photography on the Remonter Le Temps website: https://remonterletemps.ign.fr/comparer/

The product already has a CE mark, so it can access the European Union market. That’s all that’s needed to use it in France, right?

No, just because a system or product can be sold and used in German, Italian or Irish buildings (other EU member states), that doesn’t mean it can be used in French buildings.

This isn’t a matter of French product regulations; the real constraint is insurance.

It’s about how the French liability and insurance regime applies to builders and designers.

The French Civil Code puts specific levels of liability on building contractors and architects at 1-, 2- and 10-year points after a construction project handover date.

The designer and builder will look at innovative products through this liability lens.

The liability is matched to specific insurance requirements. How the French insurance industry views the products is key to builders’ and designers’ appetite to use or specify them.

How does the insurance industry assess a new or innovative material?

The process can be thought of in three levels.

• First, the French standards association, AFNOR (Association française de normalisation), approves unified technical documents (NF DTU) and other NF (normes françaises) standards. These define conventional construction practice in France. When works are executed in accordance with an applicable NF DTU, that use is generally treated by insurers as a standard technique (technique courante).

• Second, for products and systems not adequately covered by conventional construction standards, the French building science centre, CSTB, carries out technical assessment and testing. On that basis the independent commission CCFAT (Commission Chargée de Formuler les Avis Techniques) issues “technical advice” (Avis Techniques, ATec) and “technical application documents” (Documents Techniques d’Application, DTA) for the products or systems. It also issues ATEx opinions for experimental techniques.

• The third level is led by the work of the C2P - Product Risk Prevention Commission (Commission Prévention Produits mis en œuvre) within the Agence Qualité Construction. Drawing on CCFAT’s Avis Techniques and DTA, together with defect and claims experience from insurers and contractors, C2P maintains a Green List (Liste verte) of product and system families under ATec/DTA that are not under observation. Use of those products and system families within their defined domain is treated by insurers as a standard technique (technique courante).

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Product and system families that C2P places “under observation” (mise en observation) are not on the Green List. This has already happened to both our examples: vacuum insulation panels for wall insulation were placed under observation in 2016, and roof-integrated photovoltaic systems not sold as complete kits followed in 2018. The latter remain under observation as of early 2026.

Using non-Green-List products is treated as non-standard and must be declared to the insurer, who will then decide whether and how to underwrite it (with conditions, surcharges, exclusions, or refusal).

What does this mean in practice for an innovative material or system?

It depends on the cost implication for the contractor’s and designers’ insurance. The cost needs to be moderate. The contractor and designers need to be satisfied about the risk of liability for defects, at the 1-, 2- and 10-year stages.

While a product or system family may start out non-standard, off the Green List, under observation, it can eventually become standard.

Being under observation is neither the beginning nor the end of a product’s market life. It is a risk‑management phase during which manufacturers can (and do) work their way to Green List status by improving the technical record and demonstrating consistent performance at the level required for a given application.

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The roof-integrated PV system and the vacuum insulation panel examples show the same pattern: being placed under observation doesn’t shut a product out of the French market. It means the insurer must review and price the risk individually rather than covering it automatically.

For a manufacturer, that’s a signal to invest in building a performance track record: pursue an Avis Technique or ATEx, work with contractors (and clients) willing to use the product, and build the claims-free history.

A ZAC is divided into lots purchased by individual developers. When selling lots, the ZAC’s aménageur can attach environmental and technical requirements that go well beyond national regulations. They can set carbon caps, biosourced-material thresholds or timber-structure requirements.

Because it also chooses who builds through competitive selection, the aménageur can favour operators willing to trial new materials and methods. Some schemes reserve an explicit strand of experimentation on which the developer commits to innovating.

Applied consistently across a whole zone, this turns a ZAC into a testing ground where low-carbon and bio-sourced approaches can be mandated, delivered and compared at scale.

ZAC Chapelle Charbon is transforming a former railway logistics site north-east of central Paris.

Currently on site at Lot C, Heros Architecture and Atelier Villemard Associés are building 78 social and intermediate housing units, shared spaces, 6 artists’ studios and commercial spaces.

Lot C is built using natural, low-carbon materials like solid stone, timber and recycled steel. The rooftops carry solar panels, glass-roofed artists' studios and thick green roofs that accommodate wildlife and soak up rainwater.

Paris et Métropole Aménagement is carrying out the aménageur role at Chapelle Charbon. Find out more about this urban regeneration on their website (including a January 2026 update with maps, timeline and key facts here).

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Lot F at Chapelle Charbon, designed by Nicolas Lombardi Architecture, will deliver 41 apartments alongside ground-floor commercial and activity spaces.

The project utilises the Bail Réel Solidaire, a French community land trust mechanism. It provides permanent housing affordability by separating land ownership from building rights.

Construction at Lot F started last November. The structure is a mix of concrete and timber, with bio-sourced insulation. Check out the developer’s Instagram post below to see a façade mock-up on site.

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On the Seine’s Left Bank, ZAC Saint-Vincent-de-Paul is regenerating the site of an old hospital near Montparnasse, south of the Jardin du Luxembourg.

Paris et Métropole aménagement is also the aménageur here. Their Instagram post below shows construction progress on the Chaufferie, Petit and Pinard lots.

Chaufferie contains social and intermediate housing, shared and commercial spaces. Petit will also provide social and intermediate housing, while Pinard will contain a school, creche, gym and shared spaces.

Across these zones the same logic is visible on site. A single aménageur sets the material and carbon terms lot by lot. Low-carbon requirements are written into the sale conditions, rather than left to each developer.

Comparing how architects and developers respond to these demands, within the same ZAC, is one of the things that makes French urban regeneration worth watching.

France has a system for managing the design tensions and development trade-offs. A corps of heritage architects employed by the Ministry of Culture is deployed to every département in France.

These architectes des bâtiments de France (ABF) have a dual role:

• custodians of State buildings, and

• advisors to permitting authorities in the framework of urban planning law.

I’ll outline the planning advisory role below. In short, ABF give mandatory or advisory rulings on whether a proposed development fits in a protected historic setting.

Some responders to a French Senate enquiry in 2024, on the role of ABF, complained about subjective decisions.

Two cathedral projects illustrate how one corps of architectes des bâtiments de France can deliver very different styles.

French cathedrals are owned by the state, and works to renovate or alter them are overseen by the ABF. After a catastrophic fire in the one cathedral, the architects returned the structure to its pre-fire state. The few differences include new liturgical furniture and a much brighter interior, thanks to walls cleaned for the first time in centuries.

The project was Notre Dame.

The other project was 300km south west of Paris in the Loire Valley, the Cathedral of St Maurice in Angers. In the 19th century a gallery on the front façade was removed, exposing the polychrome-painted sculptures around the main door to the sun.

The state architects wanted to replace the gallery to protect the paintwork from sunlight. The problem: there was very little documentation of the original design. So the ABF took a very different approach - modern simplicity, to a design by Kengo Kuma. A classical series of arches, no ornament. Concrete, though with carefully chosen local sand and aggregate.

But that’s just two projects.

The bigger picture is that France has managed to preserve the integrity of its countless beautiful historic villages, towns and city districts. And that’s thanks in large part to the powers and role of the architectes des bâtiments de France.

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What are the rules for development in heritage-protected areas? What is the role of ABF, and how does an architect or developer navigate the rules?

Building in heritage-protected areas

Heritage protection applies when two conditions are met: 1) a project needs a planning authorisation and 2) the site sits inside a protected perimeter. An authorisation can be a building permit, a demolition permit or a déclaration préalable (a prior declaration, a lighter consent for minor works such as a new window or façade change).

The main protected perimeters are:

• The surroundings of a listed monument: a default 500-metre radius, or a tailored perimeter set out in the local urban plan. Within a default 500m radius, ABF control is binding if the project is visible from the monument, or if both the project and the monument are simultaneously visible from a public vantage point. This is referred to as covisibility.

• A site patrimonial remarquable (SPR, remarkable heritage site): a whole town, village or a district of recognised heritage value.

• Classified or listed sites and other protected landscapes.

In these zones, the permitting authority must consult the ABF in relation to a permit application.

The role: what the ABF decides

The ABF sits within the unité départementale de l’architecture et du patrimoine (departmental architecture and heritage unit, UDAP), under the Ministry of Culture. In protected zones it issues one of two opinions:

• Avis conforme (binding opinion): the mayor cannot grant a permit against it. A negative opinion is, in effect, a veto. This covers most works that change a building’s external appearance in a remarkable heritage site, or within a protected buildings’ surroundings.

• Avis simple (advisory opinion): the authority may depart from it, but risks litigation at a later date. It is reserved for less sensitive cases, such as mobile-phone antennas, works on unfit or dangerous housing, and projects in a monument’s surroundings where there is no covisibility.

What the ABF assesses is broad: massing and height, materials and colours, façade rhythm and detailing, and impact on views to and from the monument. The governing test is insertion harmonieuse (harmonious integration) into the surroundings. That phrase is where much of the perceived subjectivity lies.

The ABF also shapes the rules upstream, co-authoring the local heritage plan and helping to draw the perimeters themselves.

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Navigating the process

For an architect or developer, the following area a few practical points to keep in mind:

• Check the heritage protection boundary. Before buying land or starting the design process, confirm whether the site is within 500 metres of a protected building, a remarkable heritage site, or a classified site. These perimeters are publicly mapped.

• Engage the ABF early. They encourage consultation early in the design process. The heritage architects can give observations on a preliminary design, before submitting a building permit application. This ensures the plans already take likely heritage requirements into account.

• Budget for ABF requirements. The formal opinion usually comes with conditions on materials and detailing (timber windows rather than PVC, use of local stone). These are decided case by case, so add a budget contingency. Early consultation narrows the uncertainty.

• Build in extra time. An ABF referral extends the permitting process by about a month. The timeline gets longer if the design has to be reworked during the permitting process. A change in external appearance means the heritage architect is consulted again.

• Know the appeal route. The options and deadlines will be set out in the local authority decision. Appeals can be brought to the regional prefect (the state’s representative in the region), or the administrative court.

In response to the housing crisis, a government bill seeks to dilute the veto power of the architectes des bâtiments de France

The bill (projet de loi Relance Logement) includes an ‘operation of local interest’ mechanism for areas with a housing shortage. Housing projects with this label would get derogations from the local urban plan, and ABF opinions would be advisory, not vetos.

In a Le Figaro op-ed at the beginning of July, a group of academics, historians and public figures complained that the Relance Logement law would lead to a soul-less France full of concrete. Referring to a 2018 “Elan” law that weakened ABF powers, they complained that the Relance Logement law would be its culmination.

Energy efficiency and renewable energy roll-out are high priorities in French construction. They’re also central to the tension between development and heritage protection. The 2024 Senate enquiry on the ABF role heard complaints about:

• blocked solar PV installation on houses and apartments in heritage-protected areas, and

• deadlock around external insulation and façade alterations.

The Senate report documents numerous cases where homeowners within protected areas sought rooftop PV installations to meet rising energy costs and energy performance obligations, only to face repeated refusals or highly restrictive conditions from ABF.

Owners or social landlords have tried to apply off‑the‑shelf exterior insulation systems to old‑style façades. But ABF have refused these solutions on the basis that they both disfigure the historic appearance (by thickening and flattening façades and hiding traditional materials).

The technical risks for old, moisture‑sensitive walls are also taken into account. ABF instead steer projects towards less visible or more tailored forms of energy renovation, but these may be more expensive and reduce internal space.

It’s clear that there’s a tension between France’s ambitious climate goals and protecting its outstanding architectural heritage. Differing approaches to renovating a cathedral, and the proposed Relance Logement law making its way through Parliament, show maintaining a workable balance is a subject of ongoing debate.

PS: A YouTube video on the Angers cathedral project.

The pattern will feel familiar in the UK, Ireland, Australia or North America: a low-carbon, energy-reducing regulation creates a cost premium, and gets a lot of the blame for a housing slowdown. France’s case is worth a look for anyone watching the same trade-off unfold at home.

Before RE2020, French buildings were constructed to meet Réglementation thermique RT2012. The requirements of RT2012 covered:

• Primary energy consumption.

• Thermal performance of the building envelope.

• Summer comfort, measured by the conventional interior temperature, a static indicator based on a conventional five-day heatwave. The RE2020 replaced it with the degree-hour indicator.

RE2020 enhanced the regulation in pursuit of more efficient and decarbonised energy consumption; reduction in carbon impact of building elements and site works; and greater occupant comfort during periods of intense heat.

Specifically, it requires calculation of:

• Non-renewable energy consumption.

• Greenhouse gas emissions from buildings’ energy consumption over 50 years.

• Greenhouse gas emissions from the construction product life-cycle and site operations.

From 1 May 2026, RE2020 is no longer mainly a housing and office regulation. 13 new building types have been added to the framework: hotels, restaurants, retail, childcare facilities, hospitals, universities, sports facilities, and industrial buildings among them.

RE2020 brought two areas of cost increase

Materials. The carbon impact limits drive a need for low-carbon alternatives to standard materials such as concrete and fossil fuel-based insulation. As alternatives have been less available in the market, and builders less familiar with them, the price is typically higher, even with increased demand.

Learning curve. When designers implement a new design requirement and new tools for design calculation and reporting, when builders adopt new (or ancient) materials, fees and labour rise. In the period after a new regulation, these costs are added to the project budget.

Two cost drivers - the move away from concrete and towards heat pumps

The concrete industry mounted a strong campaign against the mandated methodology for calculating carbon impact in the life-cycle assessment (LCA). The dynamic LCA method weighs near-term carbon emissions more heavily than future emissions. Another debate occurred when a revised carbon calculation standard was adopted (EN 15804+A2). This time it was the timber industry calling for change: the new standard treats biogenic carbon as cycle-neutral, meaning no sequestration credit for timber.

The shift from gas condensing boilers to heat pumps, district heating and photovoltaics brings higher capital costs. That didn’t stop heat pump penetration in individual housing surging from 47% in 2022 to an estimated 71% by 2024. Nonetheless, industry groups point out the difficulty for small builders in adapting to complex thermal envelopes and heat pumps.

What’s the real cost impact?

Before RE2020 came into effect, a Senate Information Report (No. 434 of 2021) noted the government-acknowledged added costs of +3% to +5% initially, +5% to +8% from 2024 to 2030, and +7.5% to +15% from 2030. It also recorded industry estimates of up to around 10% in the short term (the FFB around 9%, the CAPEB 7% to 10%), while the study the Senate itself commissioned put the increase for individual housing at 3.4% by 2024.

Despite calls to compensate energy suppliers for a demand shock, and households and professionals for increased costs, the government did not introduce subsidies. The Ministry of Ecological Transition argued that the regulation would drive industrial competitiveness and enhance the export positioning for French construction.

Limited government support at first. By 2024, the housing slowdown was too much to ignore.

In the face of early opposition, the government referred back to the early years of implementing the previous standard, RT2012. Despite widespread industry predictions of a 10 to 15 percent cost increase at RT2012 introduction, a study by the association of quantity surveyors found the observed outcome to be negligible, with learning effects absorbing the theoretical cost increase. The government also pointed to energy savings that RE2020 would drive.

From 2023 onwards, housing production indicators deteriorated sharply. Thereafter, the government discourse shifted from “competitiveness” to protecting “the sustainability of the regulatory trajectory”. To get a proper insight into the RE2020 cost impact, the Minister for Housing, Valérie Létard commissioned the Rivaton report in March 2025. It’s the most up-to-date and independent economic analysis of RE2020-induced costs.

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The Rivaton report (July 2025) quantified additional costs of 11 percent due to RE2020

What Rivaton found:

• RE2020 induced additional costs of +11% across the full trajectory to the 2031 milestone (excluding learning effects). The increase is broken down as +2% for insulation, +3% for heating and domestic hot water, and +6% for low-carbon materials. (The government states the 11% figure as materialising by 2035, once buildings meeting the 2031 threshold are built out; some industry bodies frame the same +11% as covering the 2022 to 2031 period.)

• The move to a tighter standard for calculating carbon emissions (EN 15804+A2), without a proportionate adjustment to the limit in RE2020, made previously compliant designs non-compliant.

• The degree-hour (DH) methodology to measure summer comfort is insufficiently granular to reflect actual heat stress patterns under climate change scenarios, and the regulation’s treatment of active cooling was deemed overly restrictive.

• The current regulatory framework creates perverse incentives to sacrifice amenities that raise living standards (balconies, loggias, ceiling heights, glazed surfaces), to hit carbon targets.

The report added some qualifiers:

• Rivaton was asked to test whether the 2025, 2028 and 2031 implementation milestones are sustainable, not to reopen the case for RE2020 itself. He is explicit that the +11% figure is a verdict on the pace of implementation, not on the regulation’s merit.

• The report is built on 62 stakeholder hearings and independent analysis of around fifteen recent operations. That’s a smaller sample than the earlier 40-project study by the quantity surveyors’ industry organisation. Rivaton flags his report as a picture rather than a comprehensive census of RE2020-related building costs.

• As with every study before it, Rivaton acknowledges he cannot cleanly separate the RE2020-induced costs from other drivers: material price inflation from 2021 to 2022, the interest rate shock.

Qualifiers aside, the cost of housing couldn’t be ignored, and changes are underway.

What Rivaton recommended:

• Keep the calendar, adjust the dial. The report explicitly argues against suspending or delaying the 2025, 2028 and 2031 milestones, on the grounds that regulatory instability would cost the sector more than the thresholds themselves.

• Instead, the report proposes raising the 2022 to 2024 carbon ceilings by around 40 kgCO₂/m² (roughly 5%) to correct for the A1 to A2 methodology change that made previously compliant designs non-compliant.

• A recurring principle in the report is that carbon compliance should not be bought at the expense of balconies, ceiling height or glazed surfaces, so it recommends threshold modulations for ceiling heights above 2.5 metres and for external amenity space.

• Rivaton calls for the degree-hour indicator to be revised to reflect real heatwave risk, and for the effective prohibition on active cooling systems to be lifted, arguing the current rules leave new housing genuinely exposed to climate-driven heat stress.

The government has already acted.

• A decree (n°2026-200, March 2026) updated RE2020 and came into force on 1 July 2026. It did not adjust the carbon limit as Rivaton recommended, to correct for the shift from EN 15804+A1 to EN 15804+A2. This has been held over for a later decree.

• What the 1 July decree did was adjust the carbon assessment parameters to allow for more ceiling-height and external amenity space. There’s also an allowance for upward extension with additional floors, and a softened regime for high-rise buildings.

• Summer comfort measures are still pending. The degree-hour indicator overhaul was deliberately held back from the March 2026 package because of its technical complexity, and a second decree addressing it is expected later in 2026. This same second wave is also expected to include the carbon-ceiling adjustment for EN 15804+A2. As of writing, no draft text has been published.

The easier fixes came first: more ceiling height, more balcony space. The harder ones, correcting the carbon limit and revising the degree-hour rules on summer heat, are still to come.

Meanwhile, the rapid increase in AI capacity and adoption is a driving force for digital transformation of building design, manufacture, assembly and construction. Climate change is driving stricter regulation of climate, carbon and biodiversity impacts.

Architects, engineers, quantity surveyors, as well as material manufacturers and building contractors, are responding with innovation in everything from material science, to AI-enabled design, to off-site construction and on-site robotics.

Innovation in the largest French construction companies

VINCI, the industry leader by revenue, is active in concessions (infrastructure operations, roughly 16% of group revenue), energy solutions, and construction (infrastructure and buildings).

The second largest of the French construction majors is Bouygues. Construction (infrastructure and buildings) represents about half of group revenues. Energy and services account for around a third, with telecoms and media making up the rest.

For Eiffage - third place in the French construction league table in terms of revenues - concessions bring about 16% of group revenue. The rest comes from construction - infrastructure, energy systems, and buildings.

How the top 3 do innovation differently

VINCI launched “Leonard” in 2017 as the Group’s dedicated foresight and innovation platform. It was explicitly designed to overcome the challenges of digital transformation and environmental transition across the group’s highly decentralised, multi-business structure. Leonard comprises 4 structured programmes:

• The SEED Programme provides incubation support for early-stage startups (under two years) in construction, mobility, energy, and real estate verticals. Since 2019, the programme has supported 32+ early-stage startups.

• VINCI’s CATALYST Programme is an accelerator for mature, funded startups seeking industrial partnership and international growth with VINCI companies. Since its launch in 2019, the CATALYST programme has helped startups sign more than 1,000 contracts with VINCI companies.

• The group also runs an intrapreneurs programme. Employees with ideas spanning multiple Group activities can apply to become intrapreneurs within the company. Since 2017 it has supported 85 projects and created 36 new activities or entities within VINCI.

• Through its AI Programme, VINCI runs machine learning training and AI deployment projects in partnership with the group’s business entities.

Bouygues operates innovation at multiple levels: a Group-wide intrapreneurship programme, division-specific R&D labs, and an open innovation programme connecting employees with external startups.

• Les Entrepreneurs / Innovate like a Start-Up launched in 2016 as a cross-group intrapreneurship programme. It brings together around 50 employees per cycle from all of Bouygues’ business segments (construction, telecom, property development, and roads) to invent solutions for sustainable cities.

• In parallel, Bouygues Construction operates its own division-level acceleration programme, the Bouygues Construction R&D Acceleration Programme, in partnership with Schoolab (an innovation consultancy).

• In addition to the R&D Acceleration Programme, Bouygues Construction launched Scale One in 2024 - an innovation facility located at Chilly-Mazarin in southern Paris.

Eiffage’s internal approach to innovation is the most decentralised of the three. The group’s Sustainable Development and Transversal Innovation Department is at the centre of a network of division-level innovation correspondents.

• Start’lab is a series of small innovation cells that convene around specific strategic themes (notably artificial intelligence, hydrogen, and carbon calculation), functioning as internal technology scout groups.

• E-FACE is Eiffage’s Carbon-Energy Arbitrage Fund. Endowed with €2 million per year, the fund is a voluntary initiative that offsets the cost differential between a conventional energy solution and a more expensive, low-carbon equivalent. The fund is an internal subsidy mechanism for Eiffage’s own project managers and subsidiaries.

• Seed’Innov is the group’s internal co-financing fund, supporting innovations created by one or more Eiffage subsidiaries (up to 50% of project cost). Since 2017, the combined Seed’Innov and E-FACE funds have supported 111 projects for a total of €13.4 million.

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Bio- and low-carbon material innovation

VINCI Construction has co-developed and patented Exegy, a range of low-, very-low-, and ultra-low-carbon concretes, launched in September 2020. By 2025, Exegy represented 74% of all concrete used by VINCI Construction on its building projects in France, with a stated 2030 target of 90% of its concrete globally.

Eiffage’s most commercially mature material innovation happens in Eiffage Route, whose two dedicated laboratories have produced a portfolio of proprietary biosourced and recycled road materials.

Eiffage’s products include Biophalt, a warm-mix asphalt with ≥30% recycled pavement content and a plant-based regenerating binder from the French forestry sector. It was validated on Université Gustave Eiffel’s fatigue test rig, showing no structural defect after 2 million 13-tonne axle loadings, the point at which conventional asphalt typically fails.

Cyneo is a dedicated subsidiary of Bouygues created in 2023. It aims to industrialise the construction material reuse supply chain at a national level.

Cyneo operates physical reuse technical centres equipped with reconditioning workshops, 1,000-pallet storage, a digital marketplace for matching supply and demand, and a showroom. The first centre opened in Vitry-sur-Seine (Île-de-France) in November 2023, diverting over 1,500 tonnes of materials diverted from waste in its first year.

Off-site construction

VINCI Construction does not operate a single off-site facility comparable to a timber factory or modular plant, but it has innovated in the delivery of prefabricated concrete elements through its Tunnel Factory model, applied most prominently on the Grand Paris Express. This involves industrial production at a third-party precast plant, Stradal.

In 2024, Eiffage renamed and renamed its Industrialized Solutions division, creating Eiffage Construction Hors-Site (the French term for off-site). The division coordinates Eiffage’s specialised industrial subsidiaries like Savare (timber) and B3 Ecodesign (modular containers).

In 2026, Eiffage Construction was awarded a 5-year contract by RTE, the French electricity network operator. Eiffage will design, manufacture, and install 450 modular buildings (including 1,125 prefabricated timber-frame modules) for electrical substations across metropolitan France. Modules are produced at Savare’s Normandie factories.

Digital transformation

At its l’Archipel headquarters in Nanterre, Greater Paris, VINCI deployed a building operating system (SpinalCore, developed by SpinalCom). The system is built on a dynamic digital twin that links the BIM model to data from the building’s sensors and technical systems, to improve asset management and the services offered to occupants.

Bouygues has developed a digital twin capability anchored in 2IN, a digital twin platform developed by Colas, Bouygues’ road and infrastructure subsidiary.

In 2024 Eiffage entered into a strategic partnership with Google Cloud. The partnership deploys data warehousing and analytics, AI model training and generative AI. On the Grand Paris Express, Eiffage Génie Civil used the Novade digital platform to enable real-time quality, safety, and progress reporting.

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The innovation imperative - the policy drivers

Two legislative frameworks dominate the construction groups’ innovation agendas.

A new French environmental standard (RE2020) came into force for new residential construction in January 2022. It’s one of the more demanding energy-efficiency and carbon reduction standards in Europe.

RE2020 requires not only operational energy performance but a whole-of-lifecycle carbon assessment (ACV - Analyse du Cycle de Vie) from raw materials supplies through to end-of-life stage. This creates a strong incentive for innovation on embodied carbon in concrete, and drives the integration of low-carbon alternatives such as mass timber.

France adopted legislation towards zero net land-take (Zéro Artificialisation Nette - ZAN) in its 2021 Climate and Resilience law. The legislation targets a 50% reduction in net land-take (urbanisation of greenfield sites) by 2031, and net-zero land take by 2050. ZAN intensifies demand for vertical densification, adaptive reuse and modular construction as alternatives to greenfield development.

Both regulations have made biosourced materials, circular economy mechanisms, off-site construction, and digital lifecycle tools commercially imperative, no longer voluntary differentiators.

Partnerships to drive change

Since 2008, VINCI has maintained an academic partnership with the ParisTech consortium, specifically AgroParisTech, Mines Paris–PSL, and École des Ponts ParisTech. This evolved into the Lab Recherche Environnement VINCI ParisTech in 2019. VINCI has invested over €12 million cumulatively: €7 million in the first two cycles; €5 million renewed for 2019–2023, renewed again in November 2023 through 2028. Research priorities span energy efficiency in buildings, biodiversity, and sustainable mobility.

ISAI Build Venture is a Bouygues corporate venture capital vehicle in partnership with ISAI (a French digital VC active since 2009). The fund targets startups developing software and hardware solutions to accelerate the transformation and decarbonisation of Bouygues’ businesses across construction, real estate, transport infrastructure, and energy. It deploys tickets of €500,000 to €5 million across seed to Series C rounds.

The company cooperates with Stanford University’s Center for Integrated Facility Engineering on digital twin research.

Eiffage has a long-standing relationship with Université Gustave Eiffel, beginning with road materials research. This evolved into the E3S Programme (”Eco-quartier Sobre, Sécurisé et Smart”), a research-action programme around the LaVallée eco-neighbourhood development in Châtenay-Malabry (Greater Paris). The €2 million programme brings together 26 research laboratories and practitioners in thematic innovation workshops (circular economy, sustainable mobility, digital urban tools, well-being, responsible water management, low-carbon sites)

French construction innovation is a broad field, and this piece has only mapped the larger players.

If there is a particular area you’d like covered in more depth, whether a technology, a company, or a regulation shaping the sector, let me know in the comments and I’ll take it up in a future edition.

Ciarán

The whole (re)development operation, from land assembly to residents moving in, is managed in a single account. Strategic land value capture is a fundamental component of ZACs. The integration in a single account captures value to fund roads, networks and public amenities before a single plot is sold.

First steps in a ZAC

A collectivité (local authority) sets the zone’s boundary, establishes the mix of housing, offices and public amenities that it wants, and appoints an operator (aménageur) to administer the project from land assembly to occupants moving in.

The aménageur runs one account across the lifetime of the zone. Fifteen to thirty years is normal. The account is the bilan d’aménagement (development account). It’s a multi-decade cash-flow projection and balancing account. The development account includes every expected cost and receipt, from the first land purchase to the final handover of buildings and public spaces.

In the early years the development account mainly contains expenses: buying land (usually by negotiation, with compulsory purchase available where needed), then preparing and servicing sites. These are then sold to promoteurs (property developers), who construct the buildings.

The land under schools, parks and other amenities is eventually transferred to the local authority. The receipts that pay for all of this come, overwhelmingly, from the sale of the serviced plots sold to developers.

Land charges and value capture

On the income side, the dominant item in the development account is charges foncières (land charges). These are prices paid by developers to the aménageur for building plots. The price set by the aménageur is differentiated by programme type (free-market housing, social housing, offices, retail, facilities).

In the finished buildings, end-user prices in open-market units correspond to the prevailing market price. An apartment buyer or commercial tenant will weigh up options within the ZAC against others across the city.

However the land charge - the developer’s site cost - is not based on an open market value of the plot itself. It’s based on a reverse calculation starting with the expected sale value of the completed scheme. From that value is subtracted construction costs, professional fees, finance and the developer’s margin. The resulting sum is charged to the developer; it’s the highest price they can pay for the land while maintaining the scheme’s viability.

By charging the residual of the sale price minus allowable costs and margin, the aménageur captures the planning and infrastructure premium the ZAC itself creates. That value contributes significantly to the budget for public amenities and social housing.

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Ability to Pay

I mentioned the reverse calculation starting with the expected sale value of the completed scheme. What about non-market-based units like subsidised or social housing? The land charge is adjusted in these cases. This adjustment is built into the ZAC approach - referred to as péréquation (cross-subsidisation).

The plots that can bear a high charge are priced above their share of the infrastructure cost. The surplus covers the plots that cannot. Open-market housing, in effect, carries the social housing and the public amenities around it.

Two observations

Two noteworthy findings emerged from a 2024 study by the Institute of Advanced Studies for Action on Housing (IDHEAL), “Transparence sur les ZAC”. The first concerns which building use carries the lion’s share of ZAC development costs. The second relates to which cost category dominates the development account.

The common belief regarding ZAC operations is that profits from office development fund the housing. Across the thirteen operations IDHEAL examined, it was open-market housing that carried the highest land charge. Housing subsidised the offices, not the reverse. The land charge for social housing came in at around 65% of the open-market housing charge.

As for the dominant cost in the development account: across IDHEAL’s sample, land averaged 21% of total spend, ranging from 3% on a former military site in Brest to 46% on dense private land in Montreuil. The largest single line was infrastructure: roads and networks averaged 40%. Based on the study, opening up an enclosed inner-city site can cost as much as servicing a green field, sometimes more.

How the UK compares, and why the difference matters

As outlined above, France fixes the cost framework for a whole neighbourhood upfront, in one account, before plots are sold. The UK settles infrastructure costs site by site, after the value has already been created by the urban plan zoning. In England, two mechanisms are used.

The first is Section 106 (S106) agreements. These are obligations negotiated site by site as a condition of planning permission: for contributions to affordable housing, local infrastructure, and so on. There is no national tariff. What a developer provides depends on what the authority can extract in negotiation.

The second mechanism is a Community Infrastructure Levy. This is a fixed charge per square metre of development. It is set by each local planning authority, but only around half of planning authorities have adopted one. The rest rely on S106 negotiation alone, which is known to be slow and costly.

The cost of the UK approach extends beyond inefficiency. A 2026 report for the UK Collaborative Centre for Housing Evidence described the negotiation system as a “complexity industry,” where expertise is unevenly distributed and the better-resourced side tends to win. The report found that developers paid on average 2,450% more for sites than the land values they themselves declared when later arguing, at the planning stage, that the scheme could not afford its full affordable proportion. In reality the developer paid a high price, betting the social obligations could be negotiated away. When they are, the original landowner has already pocketed the uplift, and the public loses the affordable housing, infrastructure and amenities the land value could have funded.

The French ZAC works the other way round. The site cost (land charge) is worked back from end values and fixed in the concession agreement before the developer bids. There is no later negotiation stage at which the obligations can be reopened and bargained down. The obligations come out of the land value uplift, as intended.

Most US tools capture value after the fact. Tax increment financing freezes the property-tax take in a district, then ring-fences the future rise in tax revenue as property values climb to repay the cost of the infrastructure. Developer impact fees are fixed, published charges levied per unit when the building permit is issued, set to cover the roads, utilities and schools that new development requires.

Both tools wait for the market: neither involves assembling land or funding infrastructure before the development gets the green light, which is what sets the French model apart.

California’s Mello-Roos districts come nearest to the French approach, funding infrastructure upfront through bonds, but the bill falls on future residents as an annual levy over decades. It doesn’t adjust the land price at the point the developer buys it.

The common thread of most Anglophone systems is that authorities collect after the fact. They wait for permission to be granted or values to rise, then take a share of an uplift that has already landed in private hands. France reverses the order: it commits the spending first and recovers it from the land price charged to the developer.

When the music stops

As the land charges in a ZAC are linked to projected open-market sale costs, the ZAC timeline exposes the operation, and the development account, to the highs and lows of the market cycle.

A ZAC planned in a rising market reaches its plot sales years later, possibly in a downturn. Site preparation and infrastructure is front-loaded and land charges and other receipts come later. Any delay in selling plots inflates the aménageur’s financing costs and the development account balance gets closer to negative . Who absorbs a deficit depends on the contractual link between the local authority and the aménageur.

Where the collectivité runs the zone directly, in régie (direct management), it carries the whole risk on its own budget. Where the zone is handed to an operator under concession, the contract decides. Real risk only passes to the operator if the risk is contractually transferred. Where the authority guarantees the operator’s debt, or agrees to buy back unsold plots, the risk stays in the public domain.

The Paris Rive Gauche ZAC was created in 1991 on 130 hectares of former railway land. It shows where public exposure leads. The development was meant to be complete in 2006, but the regional audit court now puts the realistic date at 2032. The City of Paris has put in at least €1.42 billion into the project, once off-account public works are included, and guarantees the aménageur’s debt on preferential terms. The court’s conclusion was blunt: the city underwrites the commercial risk.

Smaller ZACs in deficit simply get cancelled. In 2024 the commune of Villemomble closed a ZAC operation that was facing a forecast €8m deficit, swallowing the sunk study costs. And the present downturn is testing the model across the board, with new-home reservations roughly halved against 2019 and unsold stock at around 18 months’ worth of sales.

In the national statistics, areas with the highest housing pressure correspond to those with higher employment rates.

Reindustrialisation is a French priority, central to its sovereignty concerns, and the effort is visible around Dunkerque, a port city on the northern coast. The area is set to host a new generation of nuclear reactors at Gravelines, alongside two battery gigafactories at Bourbourg and Craywick whose appetite for power is part of the case for that new capacity.

But as the article in Le Figaro made clear, the employment generated by reindustrialisation is feeding the housing crisis.

Last April Prime Minister Sébastien Lecornu announced new measures to spur housing delivery and urban regeneration. They’ve taken shape in a Relance logement bill to be presented to Cabinet on June 24th.

Didn’t France update its planning laws last November?

Yes, with the Huwart law of November 2025. But it only addressed planning risk and the scope for litigation, alongside various simplifications of planning law. It didn’t address interest rates, construction costs, unsold stock and developer solvency.

Despite the European Central Bank reducing its deposit rate to 2 percent by May this year, a 10-year French treasury rate of 3.69 percent keeps retail mortgage pricing high. This puts severe downward pressure on developers’ pre-sale rates, rendering many projects unviable.

The numbers behind this developer solvency crunch tell a stark story of structural cost inflation. Currently, construction material costs remain stubbornly elevated at 25.6 percent above their 2010–2019 baseline, outstripping the 21.2 percent increase seen in general consumer prices over the same period.

Construction labour costs surged by 6.6 percent in 2022 (more than three times the historical average) and climbed a further 4.1% in 2023. While these labour expenses have largely plateaued through to 2026, they have locked in at a high level.

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Private residential development was buoyed in recent years by the Pinel fiscal incentive, a tax reduction of up to 21 percent of the acquisition cost of new-build investment-for-rent. But it expired at the end of 2024.

So far the replacement device, the “Jeanbrun” fiscal mechanism, introduced in January 2026, has had only a modest impact. According to the Federation of Property Developers, the Jeanbrun mechanism generated only around 550 additional investor-purchaser reservations by the first quarter this year.

Over 100,000 new-build homes available but empty

That’s not because the homes aren’t needed. It speaks to the financing problem where the amount a buyer can borrow doesn’t match the amount the developer needs to achieve a profit. One of the reasons why new hires drawn to a region struggle to house themselves near their jobs.

By mid-2025, 9,265 units were completed but unsold, lingering on developer balance sheets. That represented a 91 percent increase year on year and 10.8 percent of total commercial supply, well above the ten-year average of 7 percent.

As for the total number of new-build units available for sale — planned but not started, under construction, and built — that total was 118,927 by Q1 of 2026, with a national average sale period of 20 months.

Over 2025 as a whole, residential permits totalled 379,222, 15 percent above the depressed 2024 level. Construction starts for the full year to January 2026 were much lower at approximately 277,230 units. With the private buyer-side financing constraint unaddressed, it’s easy to see how developers delay breaking ground once permits are issued.

Zero net land take

France has a legal framework to limit urban development on natural, forested or agricultural land - the Zéro Artificialisation Nette (ZAN) framework. Originating in the 2021 Climate and Resilience law, the ZAN framework aims for zero net land take by 2050. The 2021 law set an intermediate target to be reached in 2031: a 50 percent reduction in net land take compared to 2011–2021.

The law for the simplification of economic life (Simplification de la vie économique) passed in April 2026 relaxed ZAN for “projects of major national interest”. No such exception exists for housing.

While the 2050 final deadline is secure, the interim 2031 target is still heavily contested and could be pushed back or effectively neutralised by the TRACE bill currently making its way through parliament.

In the meantime, ZAN restrictions are limiting the land available for housing. Sales of agricultural land for urban purposes fell 24.3 percent in 2024 to 10,400 hectares, a thirty-year low. The federation of rural development companies (FNSAFER) has attributed this to the ZAN effect compounded by cyclical construction cost and interest rate pressures.

What would the Relance logement bill do that the Huwart law didn’t?

Third cycle of urban renewal

France established two cycles of major urban renewal in recent years. The first (ANRU 1), the Programme National de Rénovation Urbaine, ran from 2004 to approximately 2015. €12 billion was committed to upgrade around 500 priority neighbourhoods.

The second cycle (ANRU 2) starting in 2014 covered approximately 450 neighbourhoods, with a budget ultimately reaching around €10 billion. ANRU 2 is ongoing, with a completion deadline now extended to 2032.

The Relance logement bill creates a third cycle, ANRU 3. Where the first two covered only disadvantaged urban neighbourhoods - typically large post-war housing developments - ANRU 3 would also benefit medium-sized towns that face economic decline.

Rental market reopened for energy-hungry apartments

Existing regulation has taken the least energy-efficient housing, the ones rated G, off the rental market. F-rated homes are set to be removed in 2028.

In theory this regulation would have incentivised property owners to upgrade. But it met the hard reality of increasing construction and borrowing costs. The Relance logement bill would keep both F- and G-rated homes on the market.

Extension of the Jeanbrun tax mechanism

The current version of this mechanism incentivises private investment in new-build apartments for rent, and existing apartments provided renovation works are carried out representing 30 percent of the purchase price. The Relance logement bill extends this to existing individual houses, a significant expansion since houses represent a large share of France’s older private rental supply. Also, the threshold for the value of renovation works in existing properties drops to 20 percent.

Accelerated permitting for priority projects

Under the bill, mayors would get a formal initiating role in prioritising specific housing projects for accelerated permitting. This would move the projects to a fast-track process at the prefectoral level, bypassing local planning procedures.

Office-to-housing conversion

The Huwart law contained a framework plan for conversion to housing in the Parisian business district La Défense, a response to high levels of office vacancy. The Relance logement bill creates a specific legislative framework to facilitate conversion from commercial to residential use in the quarter. It serves as an precursor to what may become a broader regulatory template for reconversion nationwide.

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The Huwart law brought welcome changes to permitting procedures, and more certainty over the planning framework that applies once a development is permitted. What it left untouched is the gap between what a buyer can borrow and what a developer needs to break ground. The Relance logement bill reduces that gap.

Le Figaro documents existing workarounds to the housing shortage: France Travail paying €31 a night towards a new recruit’s first month, a Lyon foundation housing staff in budget hotels, employers in the Basque Country buying property themselves.

The question is whether the law that emerges from the Relance logement bill will bridge enough of the financing, viability and affordability gaps, and make current housing workarounds unnecessary.

His question was simple. Where is all the construction happening?

In the capital and across the length of the country, he had passed very few building sites, and almost no new-build.

In a recent article I wrote that France’s construction industry delivers more than three times the economic value of France’s celebrated aerospace industry. So how can an industry that large be hard to see?

A few factors explain the contradiction between French construction’s economic value and its visibility.

Timing: we are in a historic slump

New construction has fallen sharply for three years, on both the residential and the commercial side.

Housing has taken the heaviest hit:

• Housing starts dropped to around 263,000 units in 2024, about a third below the 2019 pre-pandemic level.

• Single-family detached houses, the most visible category of all, fell about 29% to roughly 68,000 starts, the lowest in decades.

• Developers’ new-build home sales collapsed to about 59,000 units, close to half the 2022 figure.

Commercial and industrial building has followed the same curve:

• Non-residential floor space started fell about 11% in 2024, a second straight annual decline after a drop of roughly 15% in 2023.

• Offices and retail led the fall. New retail schemes built from scratch have all but vanished, and office demand is still adjusting to remote working and surplus space.

The construction sector shed roughly 35,000 jobs between 2022 and 2024, with a further 20,000 to 30,000 going in 2025.

The apparent lack of building is partly due to a cyclical trough driven by high interest rates, the end of subsidised buyer schemes, and tighter lending. The cranes are fewer than usual. But a slump in new-build doesn’t mean a slump in construction overall.

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Behind the facades, the less visible sites

Most French building activity is renovation and maintenance rather than new construction: refurbishment and the energy retrofit of the existing building stock.

• New-build fell to 43% of building activity in 2024, its lowest share since the crisis of the late 1990s. In a normal year renovation and maintenance represent the larger share of construction, closer to 53%; the slump has widened a gap that was already there.

• Maintenance and improvement work reached roughly €118 billion in 2024, of which about €31 billion was energy renovation.

• The state retrofit scheme MaPrimeRénov’ funded around 340,800 renovations in 2024 (€3.29 billion in aid), and more than 2.4 million dwellings since 2020.

This is insulation, heat pumps, new windows, kitchens and bathrooms, and the refitting of shop and office interiors. It rarely needs a crane, a hoarding or scaffolding. Walk past a centuries-old facade and the activity, and the value, may be entirely inside.

Commercial property is making the same pivot. After a decade of heavy output that delivered more than 7.5 million m² of new offices in Île-de-France, the new-build pipeline has fallen back to 2016 levels. Developers are pausing schemes and turning to refurbishment.

At La Défense, vacancy has reached around 15%, among the highest on record. Only a couple of new schemes broke ground in 2025, while roughly 250,000 m² in obsolete towers is being restructured for energy and layout upgrades.

Concentration: building where tourists are scarce

What new construction there is clusters in a few regions, and within them on urban edges and former industrial land.

Logistics is the clearest case. France’s stock of large warehouses (those of 10,000 m² and above) has reached around 90 million m². It’s concentrated along the Lille–Paris–Lyon–Marseille corridor and across the north and east, where the four leading regions hold close to 60% of it.

Reindustrialisation, a national priority, drove about 2.74 million m² of construction in 2024, concentrated in the north and the Alpine east: the Dunkirk “battery valley” and the Grenoble–Crolles semiconductor cluster.

Public and collective buildings such as schools, hospitals and sports halls are one of the few growing categories. In Île-de-France they made up 30.5% of permitted new-build in 2024.

These logistics and industrial buildings are located on the edges of urban zones. Public facilities are dispersed across suburbia. They’re rarely on the typical tourist path.

The biggest project is mostly underground

The Grand Paris Express, Europe’s largest infrastructure project, is invisible by design. The €36 billion project in Greater Paris, with 200 km of new metro and 68 stations, is still on site. Most of it is underground: tunnel boring, station boxes, equipment galleries, behind hoardings in suburbs a central-Paris visitor never reaches (Saint-Denis, Champigny, Saclay).

The same holds for public works generally. Roads, rail, water and energy networks are linear, often buried and widely dispersed, not concentrated photogenic sites.

Data centres, the highest-profile commercial build-out in France today, mostly follow that pattern above ground: low, windowless sheds in suburban industrial parks such as Essonne and Marne-la-Vallée, with landscaping designed to keep them discreet.

A conspicuous exception can be found in Marseille, a data centre hub due to the submarine cables landing there. One of the city’s most striking buildings is Digital Realty’s MRS3, a data centre that occupies a former WWII German submarine bunker on the harbour front.

Historic centres, frozen by heritage law

A visitor’s mental map of France is made up primarily of the historic areas where new construction is most tightly constrained. Whole districts in Paris are designated Sites Patrimoniaux Remarquables (Remarkable Heritage Sites). Any construction, demolition or even exterior change within sight of a listed monument requires sign-off from the Architecte des Bâtiments de France (state heritage architect).

In the Instagrammable centres of Paris, Avignon, Aix and Bordeaux, large visible new-build is rare. What construction does occur is small and easy to miss: roof-raising (surélévation), which Paris actively encourages to add homes without taking new land, and reconstruction behind retained facades.

Rural France: two speeds

Outside the metros, the gap between statistics and visible activity widens, and “rural France” is really two different places. New building concentrates on the coasts and around a few dynamic southern and western cities: France’s coasts alone took 1.6 million new homes between 1990 and 2020, about 17% of the national total, built at close to three times the average density.

The interior is the reverse. Across the low-density “empty diagonal” that runs from the Ardennes to the south-west, and through much of the vineyard-and-village country a visitor actually drives through, most of the 35,000-odd communes see only a trickle: a single house or a barn conversion here and there, never a concentrated site.

Policy reinforces this. France’s Zéro Artificialisation Nette (ZAN, “zero net land take”) aims to steer development onto already-urbanised land.

This reduces the edge-of-town building on greenfield sites that a traveller notices from the road. It’s worth noting that the ZAN framework is politically contested: the TRACE bill moving through Parliament would heavily loosen the rigid interim 2031 trajectory and exempt vital social housing, while keeping the 2050 goal.

The direction of travel still favours infill over sprawl. And much rural construction spending is in fact renovation: energy retrofits, second homes, heritage repair.

So he was not wrong

The visitor was reading a real signal. France is building less new housing than at almost any point this century. The country’s construction effort is weighted further to renovation; billions are being invested underground and along transport corridors; and commercial development is focusing on discreet data centres and industrial sites. French construction remains highly active, but it’s not so obvious from a café terrace in the Marais, or the vineyards of a Provençal chateau.

You can see the result in our cities. Fewer building sites. Less new housing.

But France looks different. Browse ArchDaily, Dezeen or Instagram and you’ll see a steady delivery of housing: apartments with well-designed shared spaces, considered façades, some clad in the Lutetian limestone that evokes classic Paris.

France has several tools for planning and land assembly that help keep final prices down.

But there’s another part of the picture. A public financial institution with no real equivalent outside France: the Caisse des Dépôts et Consignations (CDC).

Created in 1816, the CDC is unusual in two ways. Firstly, it answers to Parliament rather than to the government, a deliberate design to keep deposited savings beyond the reach of the Treasury.

Secondly, its reach across the French economy is wide: low-cost lending for infrastructure and housing, financing for hospitals, and substantial equity stakes in some of France’s most recognisable companies, among them La Poste, the public investment bank Bpifrance, and the electricity transmission grid RTE.

So what does a 200-year-old savings institution have to do with housing, and with housing quality? The short answer is the cost and the patience of its money.

Cheap, very long finance lowers the cost of building social and intermediate homes. And capital that holds an asset for decades can absorb the higher upfront cost of quality, better materials, lower carbon, longer-lasting buildings, because it is not trying to sell at a profit in a few years.

The numbers

Start with the wider market. In 2025, around 275,000 homes were started across France. That is a generational low: the figure was over 437,000 as recently as 2017. These starts are overwhelmingly private: owner-occupier houses and developer-built apartments, financed by ordinary mortgages and bank credit.

Separately, in 2025 the State authorised and subsidised about 118,000 new social homes. These aren’t construction starts. They are funding agreements, homes that would appear on site a year or two later.

On social housing, the CDC is close to the whole of the debt. The State’s own figures put its loans at roughly 72 per cent of the housing delivery cost, and over 90 per cent of the borrowing for the build. In 2025 it signed a record 41.7 billion euros of new loans, 22.9 billion of it for social housing.

So the CDC funds almost all the debt behind social housing in France, and social housing is itself a quarter or so of new building. Right now it is a resilient quarter: the private, bank-financed market collapsed far faster than the social one.

Where does the money come from? Unique access to French savings.

Livret A

The CDC manages the centralised share of the Livret A, the tax-free, State-guaranteed savings account held by most French residents, along with its sister product the LDDS. By law, 59.5 per cent of those deposits sit with the CDC. At the end of 2025 the fund held about 453 billion euros.

The cost of that funding tracks the return paid to savers, currently 1.5 per cent. When the Livret A rate rises and the funding gets expensive, the CDC can lend from other resources instead, including the European Investment Bank and the Council of Europe Development Bank.

This is patient capital. The loans run to 40 years, sometimes 80. They are priced by the goals of the project, social or ecological, not by the borrower’s credit standing. So a small social landlord in the Creuse borrows at the same rate as a large one in Paris. It is not money chasing a double-digit return and an exit in five to seven years.

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When the private market stalls

The CDC’s patient capital becomes decisive in a downturn. As private development collapsed from 2023, the State called on the group’s public-interest property company, CDC Habitat: France's largest landlord, which develops, acquires and holds housing at scale.

CDC Habitat committed to buy 17,000 homes off-plan from private promoters, with Action Logement, the employer-funded housing body, committing to up to 30,000 more. CDC Habitat alone placed orders worth around 2 billion euros across dozens of developers, keeping their sites alive. It kept buying, at a tapering rate, through 2024.

Note the division of labour. The lending runs through the Caisse and its Banque des Territoires. The off-plan buying runs through group’s property company, CDC Habitat. Same group, two roles in housing delivery.

The French advantage

Dublin, Amsterdam and Berlin all have institutions that, between them, could do what the CDC does: channel savings into housing, lend long, hold assets, steady the market in a slump. But the functions sit in separate agencies, with separate mandates.

France’s advantage is that these jobs sit in one balance sheet. Guaranteed household savings on one side. Forty-to-eighty-year housing loans on the other. Because that money is household savings, not market borrowing, it does not dry up when markets freeze, so the CDC keeps lending when the banks pull back.

The high-quality apartments that keep appearing in France rest on something quite simple: a regulated savings product, its proceeds lent at decades-long maturities and below-market rates.

In February, Vinci reported the strongest results in its history:

• revenue of €74.6 billion, up 4.2 percent,

• record free cash flow of €7 billion.

In the same month, the French building federation, the Fédération Française du Bâtiment, estimated that French building activity had fallen 4 percent in 2025.

One of the country’s largest builders is thriving while the sector it grew out of is contracting. These contrasting trends tell you where investment in French construction is actually going.

France’s total capital investment

The national accounting measure “Gross Fixed Capital Formation (GFCF)” tracks money committed to durable productive assets. It covers spending on buildings, infrastructure, machinery, and equipment, and construction is one of its largest single components.

For anyone deciding where to build, buy, or lend in France, GFCF is close to a map of where the country is putting its money.

In 2024, GFCF was about 22 percent of French GDP, against roughly 20.5 percent in Germany and an EU average near 21 percent. By that measure, France invests heavily in its productive base, though total investment fell from the previous year

France’s total GFCF fell by about 1.3 percent in 2024 compared with 2023. The level is still high, but the headline conceals a shift in where the money is going within construction.

The split inside construction

In 2024, French building activity fell 6.0 percent in volume, while public works rose about 2.3 percent.

In 2025 the gap narrowed as both halves softened, but the order held: building still fell faster than public works. Building activity fell a further 4.0 percent in volume in 2025, its third consecutive annual decline. New housing was the heaviest casualty, with housing starts ending the year at 283,000 units, well below the long-run average of around 360,000.

Public works held up better in 2025, slipping only about 1 percent in volume as a tightening public budget and the approaching municipal elections finally caught up with it. Housing, in other words, has been the deepest and most persistent weakness, while infrastructure has stayed resilient even as it cooled.

So money is not so much leaving French construction as rotating within it: away from housing, and towards infrastructure and energy.

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Why the shift is happening

Three forces pull in the same direction. The first is demand: higher financing costs and tighter mortgage lending have hollowed out the market for new homes, and developers have responded by building far fewer of them.

The second is regulation, and it falls unevenly. The 2020 environmental building regulation (RE2020) raises the cost and complexity of new homes, leaving roads, rail, and grids outside its scope. Zero Net Artificialisation (ZAN) constrains the consumption of undeveloped land, which bears heavily on new housing. Large national and European infrastructure projects are counted under a separate national land allowance rather than against regional quotas, which softens the same constraint for them.

The third is the structure of finance itself.

France has a deep pipeline of large infrastructure and energy projects, from rail to electrical grid reinforcement to new nuclear build. These projects suit patient capital. Pension funds, insurers, and sovereign investors will wait years for a stable return, and concession structures give them exactly that: a contracted income that runs for decades.

New housing has no equivalent, depending instead on private buyers and short-term lending, both of which have dried up. The result is a financing system that channels capital towards the motorway and the metro line, and away from the apartment block.

Vinci as the mirror

To see this focus on infrastructure expressed in a single balance sheet, look at Vinci. The French construction company employs 294,000 people in more than 120 countries. It operates across three segments: construction, concessions, and energy.

Vinci’s record results in 2025 did not come from building homes. They came from concessions and energy solutions. It’s motorway network and 72 airports generated around €12 billion globally, at high margins, up 5 percent on the year. Vinci’s energy solutions grew 8 percent to €30 billion.

The company’s construction arm, by contrast, grew just 1.1 percent between 2024 and 2025. Its property development business, VINCI Immobilier, which builds homes in France, saw revenue fall 3 percent and reservations drop 13 percent to just over 4,000 units. The one part of Vinci most exposed to French housing tracked the national slump almost exactly.

Vinci’s internal balance is a scale model of France’s construction economy: weak domestic residential, resilient infrastructure and energy, and growth found increasingly abroad. The firm’s capital allocation is a considered bet on where durable returns sit, and that bet is concessions, energy, and international infrastructure. Vinci’s approach reflects what the GFCF figures show: the segments that are easiest to finance are attracting investment, and housing is not in that category.

What this means for capital

This leaves French construction with an awkward imbalance. France has a recognised housing shortage and an explicit policy interest in dense, connected, liveable places. Yet the financing system rewards the motorway, the airport, and the grid connection over the apartment block. Those assets generate the long, predictable income that institutional capital wants. Housing, structured the way it currently is, cannot compete for the same money.

For anyone allocating capital or weighing a move into the French construction market, the lesson is to read the sector by segment rather than by overall trends. We’ve seen that French building activity fell 6.0 percent in 2024 and a further 4.0 percent in 2025, even as overall capital investment slipped only modestly. But underneath that figure sits a divergence between residential work that is starved of finance and infrastructure that still commands it.

The firms thriving today, Vinci chief among them, are those sitting on the right side of that divide. The figures reward a close look at where the money goes, not just how much of it there is.

Most existing capacity is concentrated in two places: Paris, and Marseille, the landing point for submarine cables linking Europe to Africa, the Middle East and Asia. Digital Realty’s MRS3 data centre opened its first phase in Marseille in June 2020, housed in a former WWII submarine base in the port. The €140 million conversion delivered a 16.5 MW facility across roughly 7,100 m² of server space.

MRS3 has not been universally welcomed. In their book Les Assoiffeurs (The Thirsty Ones), Fabien Benoit and Nicolas Celnik document local and environmental opposition to water-hungry projects across several sectors, data centres among them. In the case of MRS3, they recounted objections to use of scarce drinking water for cooling, as well as concerns about marine biodiversity from discharging warmed water into the sea.

Digital Realty’s latest data centre near Marseille, MRS6, has also drawn sharp opposition, but received its building permit earlier this year. At an estimated cost of €700 million, MRS6 is to be built on the site of a former Decathlon logistics warehouse at Bouc-Bel-Air, about 20 km north of Marseille. At roughly 20,000 m² of server space, it is significantly larger than the firm’s sites in Marseille.

A dedicated opposition website, nondatacenterboucbelair.fr, sets out the range of objections to MRS6: fire risk, water consumption, and visual and environmental impact.

Campaigners, including France Nature Environnement, argue the centre would draw around 80 MW, which they compare to the electricity consumption of a town of 117,000 people, and point to the strain of concentrating so much demand in a region that already hosts five Digital Realty centres.

Digital Realty, for its part, maintains that its centres neither pollute nor generate noise, that the MRS6 site sits within an existing activity zone, and that the facility is essential to French digital sovereignty.

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The state’s legal levers

France has tools to push priority projects through the permitting process. At local level, a projet d’intérêt général (PIG, declaration of general public interest) can shift planning decisions from the commune to the state.

For projects deemed strategic, a stronger mechanism exists. The loi Industrie Verte of October 2023 created the status of projet d’intérêt national majeur (PINM, major national interest project).

A 2025 simplification law extended this status to data centres. Once a project is designated by government decree, planning permits are issued at prefect level, urban-planning documents can be brought into line on an accelerated timetable, electricity connection is prioritised, and the decree can grant derogations, including from rules protecting endangered species.

PINM projects remain subject to public consultation and can be challenged in court. So far, those challenges have failed.

The Conseil constitutionnel upheld a species-derogation provision in March 2025, and the Conseil d’État has since rejected appeals against PINM decrees, in cases concerning a lithium project and a plastics-recycling plant. The courts have made clear they apply only limited scrutiny to the government’s reasons for granting the status.

Stepping up the roll-out

The data centre pipeline is now substantial. Campus IA is a 1.4 GW data centre campus planned for Fouju, a village of around 600 people about 45 km south-east of Paris. It is backed by the Emirati fund MGX, Nvidia, Mistral AI and the French public investment bank Bpifrance. The project was first announced at the May 2025 Choose France summit for foreign investment into France.

Campus IA as planned would cover roughly 73 hectares of built area across ten to twelve buildings. If completed, it would be the largest AI campus in Europe. Objections centre on the loss of agricultural land and the scale of electricity demand: at full power, 1.4 GW is comparable to the output of a nuclear reactor. The project has been through a national public-debate process and is now advancing.

The largest data centre investment for France came at the 2026 Choose France summit, held at Versailles last week. Japan’s SoftBank announced plans to invest up to €75 billion to develop 5 GW of AI data centre capacity in the country. The initial commitment is €45 billion for 3.1 GW in the northern Hauts-de-France region by 2031, across three sites: Dunkirk, Bosquel and Bouchain. The further €30 billion is conditional on the first phase succeeding.

The trajectory for data centre construction in France is consistent and growing.

France is offering foreign capital its decarbonised grid, land (industrial and agricultural alike) and a legal framework built to clear obstacles fast. The tension between local objections, environmental concerns and national priorities has not been resolved. From an investment and construction point of view, the clear political will and ‘major national interest’ permitting is underpinning growth.

How does France deliver public goods on this scale? The key to their success is setting up a dedicated public delivery company, to focus efforts and accountability. For the Grand Paris Express, the Société du Grand Paris (Greater Paris Company) was created in 2010.

Just as important are the tools at the delivery company’s disposal, especially for land assembly. The Société du Grand Paris was able to draw on several methods: land banking, agreed purchase, easements, right of substitution, and compulsory purchase.

Five core mechanisms for land assembly

Land banking

Public land agencies are created to acquire and hold property in anticipation of future infrastructure projects. Early public land assembly allows the state to capture land value increase generated by transport improvements. They might buy and hold property for a decade, covering debt costs with continued operation. The Paris region has a public land agency, Établissement public foncier Île-de-France (EPFIF). It works alongside the Grand Paris Express, banking land in station area perimeters for housing and redevelopment.

Public utility easements

For works more than 15 metres below ground, a servitude d’utilité publique (public utility easement) avoids the need to acquire land. The easement is formed by a public order, following a parcel-level enquiry, and is a limitation of the owner’s right to use or develop their property. Property owners are compensated based on a fraction of the surface land value according to depth - roughly 6 to 8 percent of surface value at 15 to 20 metres, falling to 2 to 3 percent at 30 to 40 metres, with further reductions for water table position and other factors.

Pre-emptive right to purchase

What happens if the owner of a property in the zone of an infrastructure project puts the property on the market? Before the contract is signed, the public authority can exercise a droit de préemption (right of substitution) and step into the role of buyer. Not great for the buyer who has lost out on a purchase despite their efforts. But it does ensure that a development company like Grand Paris Express has first refusal on property in the path of significant infrastructure projects.

Compulsory purchase

By issuing a déclaration d’utilité publique — declaration of public utility — the State can certify that a project is of sufficient public interest to justify compulsory acquisition of private property. The expropriation process begins with an administrative phase including an independant enquiry, environmental assessment for larger projects, and parcel-level assessment. These steps are followed by a judicial phase where a judge issues an expropriation order and, if not already agreed, sets the property owner’s compensation.

Acquisition à l’amiable

Acquisition à l’amiable — negotiated, voluntary purchase — is the baseline for all French land assembly. Any public or private body with a mandate to acquire land may approach owners directly. There is no statutory obligation to attempt negotiated purchase before invoking pre-emption or compulsory purchase, but it is common practice and is often cheaper and faster. Price is typically informed by valuation data from France Domaine.

Benefits

With land banking, the public purse, through land agencies, captures the initial uplift in value, at an early stage in the development of an infrastructure project. This ultimately reduces the cost of delivering transport and utility projects.

Public utility easements are an administrative procedure, not requiring any legal process (unless the property owner objects on legal grounds). It is an administrative process on foot of an order from the Prefect - the national government’s regional representative. While the owner may object, whether on grounds of compensation or impact of the works, the process requires no change of property title.

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How this differs from other countries

In Britain, Ireland, and most of North America, planning consent and compulsory acquisition are bundled into a single decision: a Development Consent Order in the UK, a Railway Order in Ireland. The infrastructure client cannot assemble land until that decision is granted, and cannot break ground until any judicial review is resolved.

The French system does not eliminate the risks around permitting. But it does separate these from the land assembly risks. French land agencies, with patient capital, can bank land long before authorities issue permits or make declarations of public utility.

Legal challenges

There is still friction in French land assembly. In practice, a court may be hearing legal challenges related to one part of a line while contractors have already broken ground on another section.

An example from the Grand Paris Express: in June 2025, the Tribunal Administratif de Montreuil annulled the transfer order (arrêté de cessibilité) for two parcels on the future Ligne 15 Est. The houses had already been demolished. The Société des Grands Projets (the Société du Grand Paris renamed as of 2023) is appealing.

In their book Les naufragés du Grand Paris Express (The Shipwrecked of the Grand Paris Express), Anne Clerval and Laura Wojcik capture some of the local dissatisfaction with the transport and urban regeneration project.

The book gives the perspective of small business owners, tenants and homeowners uprooted to make way for new stations. Readers get an insight into communication delays, lack of accountability due to delivery company outsourcing, and mistrust regarding the company’s approach to negotiation and compensation.

There’s no doubt that many business owners and residents are disrupted when building 200km of metro line and 68 stations. Nonetheless, from the point of view of getting infrastructure built, the six land assembly mechanisms outlined here are at the root of what’s impressive about the French approach: delivery is fast while design quality, and build quality, are not just maintained, they’re excellent. All while complying with demanding procurement and environmental rules.

This excellence, in quality and time-to-completion have a lot to do with the land assembly toolkit available to French public agencies and delivery companies. At the early stages, public land value capture drives savings that can fund build quality. Later on, tools like public utility easements and pre-emptive right to purchase provide spare a lot of time and legal costs.

Urban transformations like Clichy-Batignolles are delivered by creating Zone d’Aménagement Concerté (ZAC), a Coordinated Development Zone. The ZAC is a mechanism in French planning law, the Code de l’urbanisme.

How the mechanism actually works

A ZAC is created by a municipal authority, sometimes the state. It maps a defined perimeter that the authority wants to develop or redevelop. Early stages involve a study and public consultation, an environmental assessment, and setting out the project’s objectives and programme.

The public authority appoints an aménageur, or master developer, to assemble land, deliver primary infrastructure, and sell serviced plots. The master developer role can be filled by the municipal authority itself, by a publicly-owned or joint public-private company, or by a private operator under a development concession.

Every ZAC is governed by a multi-year development scheme budget, the bilan d’aménagement. It’s the master developer’s budget, balancing revenue and expenditure across the life of the operation. Accountability to the municipality is based on annual reporting.

Land assembly

Crucially, the aménageur is equipped with real powers to assemble land. Inside a ZAC perimeter, it can use préemption to acquire sites as they come up for sale. Alternatively, compulsory purchase can be pursued on the basis of a declaration of public utility.

This is how whole neighbourhoods like Clichy-Batignolles go from idea to completion in 15-20 years. The aménageur is not negotiating with hundreds of landowners one by one over decades.

The financial logic

Once land is assembled, the aménageur carries out the heavy lifting: demolition, depollution, archaeological investigation, and the primary infrastructure for serviced building plots. It then sells those plots to private developers, who build housing, offices, retail, or whatever the programme calls for.

The master developer’s revenue comes mainly from land sales and from public works contributions from private developers. Expenditure covers land acquisition, works, studies, and overheads.

What this structure does, in commercial terms, is capture the uplift between pre-development land value and serviced land value, and use it to pre-pay the public realm, the social housing, and the infrastructure. The private developer then builds on a serviced plot at full market rate. The affordability and the public goods are not squeezed out of the developer’s margin; they are funded upstream by the value the assembly process itself has created.

The Anglo contrast

In the Anglosphere, it’s usually developers who take the lead in land assembly and real estate development, capturing most of the value along the way. They also bear risks linked to archaeological finds and contamination. In the French model, the public authority captures the land value uplift. And by the time a private developer is bidding on a plot inside a ZAC, the riskiest below-ground work is done.

The private developer’s role inside a ZAC is not diminished, it’s just different. They’re not the patient land assembler taking decade-long bets on consents and contamination. The private developer skills that matter in a ZAC are not land-banking and planning risk management, they’re design quality, delivery credibility, and the ability to work inside a public-led framework.

Acting in concert

In a Zone d’Aménagement Concerté, the concertation part is key. It is a specific public consultation duty under French planning law, which starts before a coordinated development zone is established, and continues throughout the operation.

In practice, it means structured engagement with residents, business associations, and other affected parties, alongside cooperation between the municipality and the private sector.

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ZACs in Paris and Lyon

Clichy-Batignolles is one example of a coordinated development zone. For a larger-scale example, check out Lyon Confluence - the regeneration of a former industrial and transport peninsula at the meeting of the Rhône and Saône rivers.

Paris-Saclay, the project to build out a science and technology cluster on the plateau south-west of Paris, combines several ZACs. The mechanism scales from neighbourhood redevelopment to strategic infrastructure projects.

The park, the courthouse, the schools, and the apartments at Clichy-Batignolles were not the product of a developer making the right bet on a freight yard. They were the product of a planning mechanism that lets the city take the lead as land assembler, primary investor, and orchestrator. The city carries out enabling works, then sells serviced sites to private developers to build on.

If you’re following French construction and urban development, the ZAC mechanism is the key to understanding how development and regeneration is planned and delivered. It shapes who assembles the land, who carries the early risk, and how affordability is funded through value capture.

Once you understand ZACs, much of what looks unique about the French development market starts to make sense.

France finally passed a national budget in February, after months of deadlock. Municipal elections took place in March. And from outside France, three external shocks landed: the fallout from US tariffs, conflict in the Middle East, and the higher energy prices it brought.

Here’s where the forecast stands at the end of May.

Three things that went more or less as expected

• Offices. CBRE expected empty office space to keep building up, and it has. Available space in the Paris region is up about 9% on a year ago, with roughly one square metre in ten sitting vacant. Demand for new offices remains thin.

• Hotels. After a record 2025, CBRE expected a calmer year, and that’s what we’ve seen. Occupancy softened in the first quarter, though room rates held up and Paris stayed resilient.

• Green building regulations. CBRE expected environmental standards to stay central even as Brussels eased some company reporting duties. They have. France’s tighter carbon limits for new buildings took effect on schedule; a building’s energy performance still shapes what tenants and investors will pay for it.

Three things that went in the wrong direction

• Economic growth. CBRE forecast about 1% for the year, but the economy was flat in the first quarter. That owed more to a fall in construction and the local election cycle than to events abroad. However, the rise of inflation to 2.2% in April was linked to oil price increases, and to shipping disruption in the Strait of Hormuz. That has push up the cost of energy-intensive building materials, such as glass, steel and ceramics.

• Investment dried up. Money going into French commercial property fell to its lowest first quarter in ten years, down roughly half on a year earlier. Logistics warehouses were hit hardest. CBRE had expected a slow recovery, not a fresh slump.

• New-build sales keep falling. The hoped-for new-build housing rebound hasn’t happened. Sales of new homes fell over 14% in the first quarter, and bulk sales to social landlords, a figure CBRE watched closely, dropped by a third.

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Three things to be positive about

• The budget. The single biggest uncertainty CBRE flagged, an unresolved national budget, is now behind us. It passed in February. The process was messy, but the question mark has gone.

• Refurbishment continues. Across almost every sector, new building is quiet while renovation and reuse are picking up. For anyone in design, engineering or building products, that’s where the steady demand now sits.

• Office-to-home conversion. With so much empty office space, converting it into housing is finally getting real support: the state is backing 61 conversion projects in the Paris region. Delivery is still slow, but the legal groundwork is now in place.

In short

CBRE read the fundamental trends well: weak demand, oversupplied offices, a flight to quality, and a shift towards reuse over new-build.

What no January forecast could fully price in were the external shocks: the conflict in the Middle East drove inflation up and froze investment. However, the flat first quarter owed more to home-grown factors: a fall in construction, the election cycle and a mild winter.

The direction CBRE described still holds, but the timing has slipped. We may have to wait until 2027 for growth and investment to turn back up.

One industry gets far less attention in the national press, but generates over three times the revenue: construction. The French building federation (the Fédération Française du Bâtiment) reported that revenue in French building construction was €208 billion in 2024.

The separate federation for public works construction, the Fédération Nationale des Travaux Publics, reported 2024 output at €51.3 billion. Even allowing for overlap between the two federations’ figures, it’s clear that French construction is a primary contributor to France’s economy.

While federation figures cover construction industry revenue, Insee’s national accounts measure from the investment side: at €291.7 billion, investment in construction represented 11% of French GDP in 2024.

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French construction investment returned to growth from the second quarter of 2025, ending two years of contraction. Entering 2026 with a carry-over growth rate of +0.7%, the sector’s recovery has been led by private households and commercial investment, supported by a strong pipeline of permits and starts.

Public investment in construction was lower going into 2026, but that was to be expected given municipal elections in March this year. And Insee’s survey of public works contractors in April this year confirmed continued caution in the public works sector.

France's aerospace industry will always attract the headlines. But for those tracking where capital actually moves in the French economy, construction is the larger story, and it entered 2026 in a positive direction.

This map is a great orientation to France’s most populous and economically vibrant regions. It shows the size of the main cities, the extent of their economic hinterlands, and their populations.

The map is from Insee, France’s National Institute of Statistics and Economic Studies. The heavier the colours, the greater the population. Paris is clearly the lead city. Below you have a snapshot of the other main cities with populations over a million.

Lyon - in the Auvergne‑Rhône‑Alpes region on the Swiss border - built its prosperity on silk manufacturing, trade and finance, and a diversified industrial base. It’s now one of France’s main centres for chemicals, pharmaceuticals and life sciences. Alongside that are growing digital, engineering and clean‑technology activities.

The Marseille–Aix-en-Provence agglomeration - in the Provence‑Alpes‑Côte d’Azur region on the Mediterranean coast - grew on the strength of its role as a major commercial and maritime port. The city-region’s contemporary economy is driven by port logistics and energy, digital infrastructure linked to subsea cables, as well as a large trade and services base. In addition, the region has a strong tourism industry and a diversified university and research sector.

Lille - close to the Belgian border - industrialised around textiles, coal mining and metalworking. Following deindustrialisation in the late 20th century, the city has since reoriented toward services, including transport, business and public administration. Lille hosts major retail and e‑commerce groups and a growing digital and innovation ecosystem.

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Toulouse is the capital of the central Occitanie region that stretches down to the Mediterranean. Originally a regional commercial centre built on woad* trading and agriculture, the city has evolved into France’s principal aeronautics and space hub. Today its economy is anchored in aircraft and satellite manufacturing and engineering, supported by a dense network of research institutions, universities and high‑tech services.

(* a source of blue dye)

Bordeaux - capital of the south-east Nouvelle‑Aquitaine region facing the Atlantic - developed as a major wine‑exporting and maritime port city in the 18th century. As part of the Aerospace Valley, aeronautics is now a key part of Bordeaux’s economy, while the global wine and agri-food sectors retain an important role. The city also benefits from a growing digital and creative scene, tourism, and university‑driven research.

Nantes - in the Pays de la Loire region - grew as an Atlantic port and shipbuilding centre, with maritime trade underpinning its industrialisation. In recent decades, the metropolitan economy has shifted toward services such as in the digital and creative sectors. The city also hosts advanced manufacturing including aeronautics. Port activities retain their importance, while marine renewable energy has emerged as a strategic specialisation for Nantes and the wider estuary area.

This is necessarily a high-level overview. In French construction, the interesting stories are where policy developments, design preferences and economic reality meet. That’s what The French Build will continue to cover across France's major regional cities and beyond.