Complaint lodged with Commission over French subsidies
By Sophie Mosca | Thursday 05 July 2012
A new front has opened in the ‘crusade’ by private owners against social landlords. The Union nationale de la propriété immobilière (UNPI – National Union of Property Owners), after disputing public aid granted in the Netherlands, Sweden, Luxembourg and Belgium to social housing bodies, has now lodged a complaint with the European Commission over French subsidies.
The French association, which represents housing stock of 1,500,000 units, denounces an incompatibility with state aid rules on services of general economic interest (SGEI). “We question the misuse in France of public housing financed by taxation, consisting of the allocation of housing to persons who do not need it,” France Bauvin of UNPI told
Europolitics. “I nevertheless wish to make it clear that we consider public social housing essential.” At stake, she added, is “€20 billion in state aid allocated to public housing, which includes low-cost housing managed by social housing bodies but also housing managed by the local authorities, which unlike the former is not subject to an income ceiling and on which we lack precise data. This grey zone runs counter to EU rules on state aid to SGEIs”.
“This limited volume of private housing owned by local authorities is not supported with public funds,” protests Laurent Ghekiere, who represents the Union sociale pour l’Habitat with the EU.
The UNPI’s second objection concerns “misuse of the public service mission of operators providing public housing, which should only be available to low-income individuals,” explains Bauvin. The population of such social housing is made up mostly of blue-collar workers and employees but also includes 50% managers and “even 50,000 people with very high income,” she explains. Ghekiere disputes these figures: “Certain tenants were able to qualify for social housing at the start of their career and stay, although their income has risen, because the leases are open-ended. But under the 2009 Boutin law, if the income level is more than twice the ceiling we set, we will have to terminate their contract from 2014”.
Another argument advanced by the INPI is that the social diversity objective is better attained by private owners, who provide housing for 55% of society’s poorest members while one million people await public housing, which is not awarded on the basis of income level but on the date of submitting an application. This public aid is consequently not financing a service of general economic interest and is the subject of a manifest error in classification and incompatible overcompensation that the Commission must condemn. Social landlords take issue with this argument as well, noting that there are only 500,000 new applications pending, which demonstrates the need for the 450,000 housing units they provide every year.
Not at all, replies the UNPI, which notes that public funds are poorly allocated because French legislation obliges municipalities with more than 3,500 inhabitants to invest in public housing without taking account of real housing needs. This leads to an over-abundance of empty housing on the market. All these aspects create unfair competition, argues the UNPI.
This complaint forms part of a general protest in Europe by private-sector real estate owners against what they see as distortions of competition in the financing of social housing. The European Commission sided partly with them by validating, in December 2009, an increase in the income ceiling for Dutch social housing, proposed by the Netherlands. Sweden preferred to exclude social housing from services of general economic interest.
The EU Court of Justice has been asked to rule on this interpretation by the EU executive, denounced by several member states keen on keeping their prerogatives in terms of defining their public services.