The State mobilizes significant resources to finance social housing in France. State aid to producers includes budget subsidies, tax aid and circuit aid. Since 2009, the Ministries of Ecological Transition and Territorial Cohesion publish an annual report on protected housing. It compiles information related to the financing of social housing (location, financing plan, technical characteristics).
Subsidies and tax regimes
Budget subsidies constitute the smallest part of state aid for the construction of social housing and reflect its gradual withdrawal in the 2000s with, as a corollary, the increase in the power of local entity subsidies.
Budget grants can consist of three elements:
- the basic grant calculated according to the area and structure (average size of dwellings) of the operation;
- land surcharge subsidy, which aims to allow implementation in areas where the costs of purchasing or developing the right of way are high. The principle is to subsidize the portion of the operation’s land load that exceeds a reference value;
- the integration bonus in Ile-de-Franceintended to facilitate the construction of more social housing in this area where the price of land is very high.
Social housing benefits from various fiscal measures that constitute the bulk of state aid. They are tax exemptions or reductions that are subject to compensation or refund by the State:
- corporation tax exemption for HLM organizations and public planning and building offices (OPACs);
- property tax exemption on built properties (TFPB) for up to 25 years. Following the recommendations of the report of the Rebsamen commission on the reactivation of housing construction, the State undertook in the 2022 finance law to guarantee local authorities full compensation for ten years for the loss of income linked to the exemption of this tax;
- application of a reduced rate of VAT (5.5%) since 1996. This benefit has been extended to works to improve, transform or refurbish social rental housing and to acquisition and improvement operations.
Mobilization of public land
The mobilization of public land constitutes another lever of the State policy in favor of social housing. For the State, it is a question of selling vacant or constructed land of its domain or of certain public establishments to build social interest housing on them. The January 2013 law introduced the possibility for the State to lower the price of its land by applying a discount to the initial market value.
This discount is calculated according to:
- the type of social housing : PLAI (Integration-Assisted Profitable Loan), PLUS (Profitable Loan for Social Use), PLS (Social Profitable Loan)… The more the housing is subsidized by the State, the greater the discount;
- the stress area accommodation.
The National Commission for Development, Urban Planning and Land (CNAUF) is in charge of monitoring the application of the mechanism for mobilizing land in favor of housing.
In a precautionary measure made public in 2018, the Court of Auditors considered that this device, “relatively little used from 2013 to 2016“, I was “too complex and in competition with other public land transfer procedures“.
Article 23 of the Elan law of 2018 arrived simplify the discount system existing in particular, eliminating the condition of completion of the housing program within five years of the sale of the land. From now on, only the first part of the work must be done within this period to benefit from the discount. The law also establishes that the program must affect at least 50% of its area built for housing, compared to 75% before. In this way, it encourages the implementation of more mixed projects that combine housing, commerce and activities.