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Laure Maillard- Financing social housing in France #housingfinance


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Loans through the Savings Fund: a unique transformation model

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Laure Maillard- Financing social housing in France #housingfinance

  1. 1. 1 Financing social housing in France Laure Maillard Advisor to the Director Directorate for Lending Operations
  2. 2. 2 Background of French social housing ■ Mission : to offer lower rents for persons with modest means defined by resource ceilings ■ Weight ■ The stock of social units represents 17% of the total stock (main residences) ■ More than 30 % of total construction this year (it was less than 15% in 2000) ■ Total amount of investment : €20 Bn in 2012 (€14 Bn for construction / €6 Bn for renovation) ■ Number of households ■ 4.2 million households (16% of households) are accommodated in social units ■ Another 3.6 million (14% of households) could claim access in view of the resource conditions of the tenant households ■ Government goals within 2017 ■ 150 000 new dwellings a year (vs 117 000 in 2013) ■ 120 000 thermal renovation a year (vs 44 000 in 2013)
  3. 3. 3 Financing social housing : key points State grant 5% Le logement social en France Equity 11% Local authorities grant 6% Savings Fund Loans 73% Other grant 5% Fiscal supports - Reduced VAT rate - Exemption on land tax - Non profit organisations = no company tax - Individual housing benefit for renters
  4. 4. Loans through the Savings Fund : a unique transformation model… 4 Savers Livret A passbook and LDD €367 bn + LEP €48 bn Collection centralised in the Savings Fund €243 bn + Capital and others €16 bn Social housing and city €137 bn Other general interest missions €21 bn Rate 89% Shares 11% Regulatory Earnings capital Compen-sation for the State guarantee Savings collected by all the banking network Loans €158 bn Financial assets €101bn Commission paid to the banking network
  5. 5. 5 …which allows very long-term financing at preferred rates  A single pricing policy: irrespective of the institution and the duration  Very long-term loans : 40 years construction / up to 60 years for land  Loans at preferred rates, most often granted at the resource cost or even below for very social housing, environmental and health priorities  A regulated and secured framework : every loan must be guaranteed by a local authority Loan rates Resource cost Intermediate population Social population Very social population, environmental and health priorities
  6. 6. 6 Strengths of the model in times of crisis ■ The recent crisis has highlighted the importance of our historical missions ■ A sector not hurt by the credit crunch thanks to a dedicated resource ■ A resilient supply of long term loans ■ No credit event : simple credit conditions (vanilla), regulated framework, local authorities guarantee ■ Thanks to its deep knowledge of the sector, the Savings Fund has the ability to support the huge challenges of social housing providers ■ A strong contra-cyclic power
  7. 7. 7 Future challenges  Strong needs of financing social housing in France within the next few years  Uncertainties as regards financing  State financing at best stable  Uncertainties as regards local authorities subsidies  Social housing companies equity under pressure  A key role of the Savings Fund  Direct support to the sector : bonus of €120 Mn, low rate for thermal renovation (0,5%)  Individual support to each social housing providers  A model to promote and protect  Availability of the resource  Capacity to remunerate the State  The French Savings Fund is one of the most important socially responsible fund in Europe