A provision applied in Rennes in order to help the lowest-income households to access areas that are priced beyond their reach. To achieve this, an “organisme foncier solidaire” or OFS (similar to a Community Land Trust) has been created. Its aim is to acquire plots of land in order to then rent them out at low cost using the bail réel solidaire leasehold arrangement
This policy has already been adopted in Lille, where the first leasehold arrangement of its kind was signed at the end of last year. A private developer, Finapar, signed a 99-year lease with the OFS created by the town council. This allows it to buy and sell 15 housing units located within a historic building, the former pharmacy faculty, in the city centre. A sought-after neighbourhood in the capital of French Flanders, which would otherwise be inaccessible to lower or average-income households.
Although the cost of the lease has not been made known, the price in Rennes amounts to 15 centimes per square metre for the Brittany capital. The equivalent of 7.5 euros per month for an area of 50 m2.
Is this a godsend for speculators? Well no, as the mechanism has special access conditions to prevent any intended speculation. Purchasers must file an application and be eligible for an interest-free loan, and therefore have a lower than average income.
If they wish to resell the apartment, their buyer must fulfil these same means-tested conditions. If not, the OFS will be able to repurchase the property at the original price, plus the rent reference index (+ 1.74% as at Q4 2018).
In the event of death, those inheriting the property will also need to fulfil these same conditions. Or they will be obliged to sell. “They will not inherit the property but they will recover the capital,” explains Rennes Métropole to French newspaper Libération. We are not in the business of disinheriting people. ”
The public authority “offers” the land to the purchaser, so to speak, since it is the public authority that pays it. But as the resale is regulated, the apartment will never leave the social housing stock.
In an urban area where two thirds of the 440,000 inhabitants earn less than 2,500 euros per month and where the cost per square metre in a new build is as high as 4,500 euros on average, this social leasehold arrangement is a model for access to affordable home ownership.