Last week, we spoke about affordable housing in Paris. Today, let's talk about tourist rentals in the city. The city of Paris and Greater Paris (i.e. la Ville de Paris and la Métropole du Grand Paris) recently commissioned Apur (which is a non-profit that I regularly follow) to do two studies on this topic. The first was for Paris proper and the second was for Greater Paris. What they found is super interesting:
In August 2024, Greater Paris had 149,936 tourist rentals, of which 124,988 were available for immediate booking. This represents an 84% increase compared to August 2023, which is a massive number, but maybe not entirely surprising given that Paris hosted the Olympics last summer.
Paris proper had 97,975 listings in August 2024 and 90,299 in December 2024. Overall, the city sees fairly muted seasonality. It's also worth noting that 31% of these listings belong to hosts that own multiple properties (that is, at least two).
But let's put these figures into context. Here's a map showing the density of Airbnb listings:
Here's a map showing the number of Airbnb listings compared to the number of principal residences:
And here's a map showing the percentage of unoccupied homes in the city, which totalled 268,500 as of 2021:
The report defines an "unoccupied home" to be any home that is not used as a household's primary residence. So in addition to flat out empty homes, it includes homes that are used sporadically throughout the year for pleasure and/or for work. And as you can see, there are large sections of the center of the city where "unoccupied" and second homes make up over 28% of the total housing stock.
These areas also closely mirror the areas where tourist rentals are most popular, and where Airbnb listings make up over 20% of the housing stock. (See the second chart above.) And as far as I can tell, these are mutually exclusive classifications, meaning there are sections of the city where a large percentage of the housing stock (perhaps up to half?) is either a short-term rental or a second home.
This tells you a lot about the housing market in Paris, especially when you compare it to other global cities:
NYC, for example, is shown here as having 8.8 million people, compared to 7.1 million people in Greater Paris. And yet Greater Paris has about 4x the total number of short-term rental listings. The number of available listings (where the property was available for at least one day of the year) also increased by 84% from August 2023 to August 2024 in Greater Paris; whereas it dropped by 16% in NYC, likely because the city basically banned short-term rentals.
The two reports can be found here and here (note they're in French). And they're rich in data if you'd like to learn more about some of the dynamics impacting Paris' housing market.
Cover photo by Kris Atomic on Unsplash
The work of l'Atelier parisien d'urbanisme (or Apur) is right in my wheelhouse. Run by an architect, they are a group that analyzes, documents, and then develops strategies for urban matters impacting Paris and Greater Paris (la Métropole du Grand Paris). For example, last year they published a book called Paris Atlas, which contains 150 original maps and lots of statistics about the city. And this month, they published a note talking about population and demographic trends in the city. Here's a brief summary of this latest report.
As of January 1, 2022, there were 7,115,576 people in Greater Paris:
Between 2016 and 2022, its population grew by about 0.2% per year or about 14,800 people per year. This is slower than the previous reporting period (2011 to 2015). It's also all because of natural births:
When it comes to migration, more people leave the city each year than come to it:
This runs in contrast to a city region like Toronto, where the vast majority of our population growth comes from positive net migration. This is also true of Canada as a whole. Still, Paris is not immune to lower birthrates and a declining average household size:
Another factor impacting population, according to the report, is the decline in principal residences (homes occupied for more than 6 months of the year) and the rise of what the report calls "unoccupied homes", which includes secondary homes and vacation rentals. As of 2021, the number of "unoccupied homes" was estimated at approximately 19.2%:
However, in four arrondissements (1, 6, 7, and 8), the number of homes not used as a principal residence is thought to exceed 30%! This is making it even harder to build enough new homes. For example, between 2015 and 2021, Paris built approximately 30,300 new homes. (Reminder, the Greater Toronto and Hamilton Area completed about that many in one year last year.) But at the same time, the city counted 14,600 fewer principal residences. This is, I guess, what happens when you're one of the most visited cities in the world.
To end, I'll leave you all with this population density map:
The darkest areas represent more than 250 people per hectare. That works out to more than 25,000 people per square kilometer (just divide the above numbers by 0.01). At the same time, between 2016 and 2022, the population of Paris proper (not Greater Paris) decreased by an average of 12,800 people per year. This is in comparison to an average decrease of 11,900 people per year for the period of 2011 to 2016. As is the case in many/most cities, Paris' population growth is happening largely in the suburbs and in the outskirts.
Cover photo by JOHN TOWNER on Unsplash
Paris is the first city in France to implement some form of residential rent control. The first came in 2014 (enacted in the market in 2015), but this was later removed in 2017. The second came in 2019, and this current program remains in place until November 2026, at which time it will be reviewed.
But given that it has already been in place for a number of years, people have started to analyze it's effectiveness. Here is a study by Atelier Parisien d'Urbanisme (APUR) that was published this month.
The report is in French, but I can tell you that, what they did, was compare the Paris region to 8 other cities in France -- all of which do not have the same rent controls. They were: Aix-en-Provence, Grenoble, Marseille, Nantes, Nice, Strasbourg, Toulon, et Toulouse. These were allegedly chosen because their housing markets are thought to be similar to that of Paris'.
What they found was that from July 2019 to July 2023, legislated controls in Paris lowered rents by approximately 4.2%, compared to where they would have been without any market intervention.
At the same time, they noticed that these same controls seemed to become more effective over time. From July 2019 to June 2020, they lowered rents by 2.5%, but from July 2022 to June 2023, they lowered rents by 5.9%.
Finally, they also found that the controls seemed to impact smaller places the most. For apartments between 8 and 18 m2, rents were 10.2% lower than expected during July 2019 and July 2023.
This is all interesting stuff, but in many ways, it is expected. Rent controls are intended to depress rental growth. That's the whole point. And based on this data from APUR, it is working in Paris.
But the really tough questions pertain to the possible knock-on effects. If rents are 4.2% lower, but operating costs are now growing faster than rents, then this is a problem for the housing market. You're on an unsustainable path.
And if lower rents mean that fewer developers are going to build new housing, then this is also a problem, because less supply will eventually translate into more upward pressure on rents. I don't know for sure that this is happening in Paris, right now, but these are crucial considerations.
It's never as simple as just looking at rents and thinking lower is better for long-term affordability.