What France's Planning Reform Left Out
More than 100,000 new-build homes sit unsold while workers cannot find a place to live near their jobs.
Despite innovative urban planning frameworks and infrastructure delivery tools, France has a housing crisis. In an article this weekend, Le Figaro described the economic impact. Businesses in economically vibrant regions are struggling to find workers; regions like Brittany, western Normandy and eastern Auvergne-Rhône-Alpes, where unemployment is well below the national average. Finding skilled workers is a challenge for employers, and when they succeed, housing the new hires is an additional struggle.
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.
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.
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.