The Impact of the 1948 Housing Law on Residential Trajectories in the Paris Region

Abstract

After World War II, the whole of Europe faced a severe housing crisis, both quantitative and qualitative. This shortage was the consequence of building destruction during the war, but also of inadequate new construction between 1918 and 1940 due to the economic recession and the low return on income property (Lefevre, Mouillart et Occhipinti, 1991). From the very start of World War I, most of the belligerent countries introduced a system of rent controls to protect tenants during wartime'1). And this situation persisted once peace was restored, notably due to the spiralling inflation caused by the economic crisis of the 1920s (Louvot, 2001). World War II simply aggravated the housing shortage, especially in countries that had suffered massive destruction(2). The housing problem after 1945 was so critical that state intervention became legitimate and indispensable. All governments were obliged to implement reconstruction policies. Some relied on private initiative (North America, Switzerland), while others focused on the construction of social housing (Netherlands), or granted numerous state subsidies in favour of the most disadvantaged populations (Germany, France, Belgium). These policies aimed to stimulate new construction by encouraging households to buy their own homes and by favouring investment in income property. But to achieve this second goal, the first task was to restore the confidence of private investors who had turned away from income property due to dissuasive rent controls and regulations covering rented accommodation.It was against this European post-war backdrop that the housing law of 1 September 1948 was passed in France. Its purpose was to free up the private rental market by deregulating rents charged on newly constructed dwellings in order to encourage private investors back into the sector (Merlin 1988). First, we will present the content of the 1948 law and the characteristics of the dwellings and their occupants covered by its provisions. Then, using data from the Biographies et entourage (event histories and contact circle) survey conducted by INED in 2001, we will examine the impact of the 1948 law on the residential trajectories of Paris region inhabitants and, more generally, its role in the Paris region housing market over the last fifty years(3).I. A legendary billContrary to what is sometimes claimed, the law of 1 September 1948 marks a turning point with respect to the successive rent control regulations in force prior to that date. Liberal in intent, it provided a framework for lifting rent controls on dwellings built before 1949 and deregulating rents on new dwellings to encourage investors back into the sector (Prost 1982). The aim was to find a compromise between the interests of tenants and those of the owners (Fribourg, 1988). In this context, rent controls were used as an emergency measure, applied in municipalities where the housing shortage was most severe. The scope of the law was limited to urban areas, districts destroyed by the war and expansion zones, i.e. centres of industrial and urban development.With the 1948 law, the notion of tenant protection appears for the first time in French housing history. The law introduces the to remain in the for tenants, whatever the starting date of tenancy. It nevertheless provides for certain exceptions, notably if the tenant does not live permanently in the dwelling (less then eight months per year). If a tenant is legally evicted (after renovation work for example), he/she is not rehoused unless the eviction is in the public interest. The right to stay in the premises, an exceptional advantage for the tenant, is limited however by the owners' right to recover the premises if they wish to house themselves or members of their family or to replace the premises with new dwellings. In this case, the owner must rehouse the tenants in premises of a similar nature.Though liberal in intent, the law of 1 September 1948 has practically frozen the rents charged in old private sector dwellings, since the tenants' right to remain in the premises prevents owners from recovering their property. …