Patrice Vergriete: The Taxed City. Policies to support rental investment, a new housing production sector and the restructuring of local public policy in France (1985–2012)

Housing provision in France lies at the heart of several academic debates: on state intervention, on private sector approaches to housing provision, and on local governance. The argument that a process of neoliberalisation has been affecting Western societies since the 1970s offers a cross-cutting perspective. However, an analysis of one instrument of national housing policy – tax relief for rental investment – reveals its many limitations, particularly in the 2000s.

Based on a methodology that combines qualitative and quantitative approaches, our research reveals the emergence of a new political economy of housing production. In connection with decentralisation, public authority has become dual in nature, with, on the one hand, a State that regulates the market through legislation and, on the other, local authorities that enter into negotiations with private actors. This duality also highlights contradictions between national issues (particularly macroeconomic ones) and local priorities.

In contrast, property development is undergoing a transformation: whilst the tax incentives introduced by the state have attracted new players and given rise to a specific development model, the new approach to public policy is prompting a shift in strategies. The physical development of the city is being affected by these changes. This is partly because national regulations have an impact on supply, but also because the unequal bargaining power of local authorities vis-à-vis private actors leaves small and medium-sized towns more vulnerable to housing production that falls short of public expectations.