How some real estate investors get around rent controls with coliving

Coliving accommodation bridges the gap between classic rental and hotel accommodation. Thus, they escape certain norms or regulations like… rent capping.

Marble fireplaces, private courtyards, high ceilings, wooden furniture: the atmosphere of a country house reigns in this Leon “coliving” apartment, a new form of high-end shared housing that spreads despite its high prices. Coming from the United States, this recurring concept of shared housing appears to be beginning its expansion in France, as 14,300 beds are planned for 2023, compared to about 2,600 to open in 2020, according to data from the firm Xerfi, which has published several reports on it. Studies were published. This last years topic.

Mainly concentrated in Île-de-France, coliving is attracting private investors and is expanding into metros where the rental market is under pressure. This is the case in Lyon, which worries some elected officials in the metropolis. Mathis Etienne, a 22-year-old law student, rents one of seven suites at the “Patios de Berthelot” in the central district. He pays 825 euros per month for a 15 m2 studio, which is higher than the applicable prices in Lyon where rents have been regulated since 2021.

For comparison, in Lyon, a student studio costs an average of 592 euros per month, a shared room around 529, according to peer-to-peer rental site LocService. This gap did not pose a problem for Mathis Etienne of Niort. “I have a father who makes a very good living,” he admits, who was attracted by the services offered, especially the gym and television room.

“In residence, there are no students in very complicated or uncertain situations,” he admits.

Students forced by lack of offer

Here, roommates, all students, have access to cleaning service in common areas, a Netflix subscription, and can participate in activities like cooking classes or wine tasting. It is specifically with this offering of services that furnished rooms in residence escape rent control. In a city where there are six requests to offer shared rooms, Renaud Perre (United Left), vice-president-elect of Lyon Metropolis in charge of housing, fears that some will be forced to adopt this formula, a solution for lack of others “We cannot impose services on students, “He believes.

Coliving accommodation bridges the gap between classic rental and hotel accommodation.

“It’s almost like a mini-hotel, and that’s a whole legal debate,” explains Laurent Bildout, a real estate and urban planning lawyer at Novello Advocates. Thus, “fire safety standards, etc., are not the same for accommodation intended to receive the public like a hotel”.

And this concept provokes debate: “You have some cases where rent control is applied and others where, as we are not strictly housing, coliving escapes it”, explains the lawyer.

“Time to set the rules.”

Faced with this legal uncertainty, Renaud Perre believes that “it is time to set the rules”. His fear? “Price inflation” of rents if such dwellings multiply. His position: “We do not want to co-exist in the city of Lyon and in the metropolis of Lyon”. These reluctances do not block real estate applications.

A 94-apartment residence opened in July 2023 in suburban Bron. Another should see the light of day in late 2024, according to Renaud Perre, after lengthy negotiations led by developer Beauges Immobilier, which received “extraordinary” authorization from Metropolis. And there is no dearth of customers.

“We received 150 requests for seven locations”, underlines Julien Grissard, owner of “Patios de Berthelot”.

Its Labelleville agency will open a new residence in Villerbain in January 2024 and is advertising in the local press to attract tenants as well as investors.

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