The institutional levels of housing market regulation: spatial selectivity of fiscal policy and the local governance systems in France





In recent years, the field of tax geography has experienced significant advancements (Tapp & Kay, 2019). While numerous studies have explored the impact of tax policies on real estate production, much of the existing research has focused on global, national, or local scales, overlooking the examination of inter-scale relationships. This research seeks to address this gap by exploring how local governance and development systems can mitigate or redirect the effects of a spatially selective national tax policy on urban development.

This paper analyses the local effects of a French tax exemption scheme for household rental investment. Created in 1984 and progressively extended from mid-1990s, this program (known as the “Pinel” scheme since 2015) now holds a pivotal role in the regulation of private housing development in France (Pollard, 2023). Tax subsidies under the “Pinel” have concerned almost half of the dwellings sold by developers and around one third of new multifamily homes. The considerable scope of these subsidies has led French researchers to adopt the term "fiscalisation" instead of "financialisation" to describe the financing dynamics of housing in France.

Since 2009, this fiscal support has been characterized by spatial selectivity: initially available to all French municipalities, only 6% met the eligibility criteria by 2022. The transformative moment in this gradual restriction occurred with the 2018 Finance Law reform, rendering 1,100 previously attractive municipalities ineligible to developers. At the national scale, this change resulted in reduced residential development in the affected councils and a deceleration in the growth of purchase prices for rental housing (Lei, 2023).

This research shows that the local repercussions of these fiscal measures on urban development are intricately tied to local governance and development strategies. To achieve this goal, a comparative study is conducted focusing on two medium-sized French cities: Angers and Clermont-Ferrand. Both cities experienced a loss of access to tax incentives in 2018, impacting a significant part of their territories.

The study of each case follows a structured three-stage approach. Initially, the characteristics of the two local governance systems are delineated using public data, including local and national regulatory documents, as well as statistics on local land markets. Despite the significant similarity in socio-demographic aspects between the two cities, their development strategies diverge. Angers pursues municipal entrepreneurialism to attract private developers, while Clermont-Ferrand adopts managerialism to sustain social housing associations.

The subsequent stage involves quantifying the impact of the 2018 reform on local real estate development, employing private statistical data concerning dwellings sold by private developers. The analysis reveals that, in both areas, the 2018 reform led to a concentration of private property development in city centres, accompanied by accelerated price increases.

The final stage involves investigating the response of local systems to this transformation through a series of interviews (n=15) with public and private actors in both regions. In Angers, the incentives introduced under the guise of a supply-side policy heightened developer interest, thereby prolonging the effects of the national policy. In contrast, Clermont-Ferrand's implementation of restrictive measures meant that investor households had to bear a portion of the financing burden for social housing production, diverting some anticipated effects of the national policy.

Author Biographies

  • Pierre Le Brun, Université d'Avignon

    Lecturer and research assistant, Department of Geography

  • Dr. Sara Özogul, University of Groningen

    Assistant Professor of Urban Planning, Faculty of Spatial Sciences

  • Dr. Sarah Mawhorter, University of Groningen

     Assistant Professor of Housing, Faculty of Spatial Sciences


Lei, R. (2023) The Dynamics of Property Ownership with Spatial Markets and Policies, Ph.D thesis, Université Bourgogne - Franche-Comté.

Pollard, J. (2023) “The political conditions of the rise of real-estate developers in French housing policies”, Environment and Planning C: Politics and Space, 41, pp.274–291.

Tapp, R., Kay, K. (2019) “Fiscal geographies: ‘Placing’ taxation in urban geography”, Urban Geography, 40, pp.573–581.