It’s true that these rental arrangements exist and, often, they are presented, rented, and paid for over the Internet initiated by foreign companies.  In any case, this market will always escape traditional rentals because these “pied-à-terre” properties are not for the purpose of being rented long-term, but instead to be used primarily by the owners when they visit Paris, then rented out to tourists during any open periods in order to cover the charges and property taxes, and also to avoid a possible squat.

The problem then rests in the fact that City Hall has not made the distinction between furnished rentals for tourists (for a few nights or a few weeks) and furnished rentals destined for individuals who come to France to work.  The multinational organizations, which are the principal renters of furnished apartments, have changed their behavior since a few years ago.  De Circourt Associates can attest that before the economic crisis of 1993 (reinforced by that of 2011), these organizations would systematically sign one-year renewable rental agreements.  But now, in these times of such uncertainty, everyone is reducing their risks and, most often, these organizations now rent for shorter periods (3 – 6 months) in order to not engage themselves too much into the future with expat employees, even if it means renewing the current lease multiple times.

Paris City Hall also holds furnished rentals responsible for the increase in property costs, whether a rental or a purchase.  This just isn’t the case.  A furnished rental is rented out more often at the same amount of rent than an unfurnished rental.  The advantages of furnished rentals are situated elsewhere than in commercial goals.  In effect, the laws governing unfurnished rentals have driven property owners into a corner.  Without being able to ask for sufficient guarantees from potential tenants, nor to assure themselves that the rent would be paid or still less that they could recuperate their property if the tenant defaults, they have turned to furnished rentals.  These owners, French individuals who reside in France and pay their taxes in France, have become the scapegoats for a problem which was created out of nowhere by legislation that is too tough and, it must be said, unfair.

Rent costs, just like the costs of bread, vegetables, clothes, taxes, and everything else in France have skyrocketed.  Are property owners going to be accused of this ravaging inflation?  Furnished rentals for those who come to work in France is therefore not responsible, nor is the lack of dwellings, nor the inevitable increase in rents as charges and taxes are increasing while available fiscal deductions are disappearing.  This increase in rents in Paris is equally the reflection of the total investment cost that an apartment purchase in Paris represents, where the price per m² now often exceeds 10,000 €.

This is a serious problem, and City Hall has all the power.  Here are their requests: 

The law forecasts/anticipates that an authorization with Paris City Hall is necessary before transforming short-term rental property/properties for a term of less than one year (or 9 months for a student).  However, this authorization is unnecessary when the property constitutes the lessor’s primary residence.  –Illogical, as in this case it is only applicable for tourist rentals / only tourist rentals are possible!

Compensation :

The law forecasts that this authorization may be granted under the condition of transforming an equivalent surface area that the property rented furnished for something other than habitation (for example, an office or business).  The intention of this compensation has a goal of preserving the balance between a residencial and economic dwellings.  How many owners possess a real estate space that corresponds to the property that they’re renting, just waiting for it to be transformed commercial?

Without authorization, the owner could be fined 25,000€ plus an additional fine of 1,000€  (maximum) per day per m² until the authorization is sorted out.  The Grande Instance Court (like the Paris Court of Appeals) applies these sanctions to owners who practice tourist rentals without authorization matched with compensation.

What are the solutions?

One must hope the courts will know how to differentiate between a tourist rental and a furnished rental on behalf of an expatriate living and working in France, or of a French family whose apartment burned down or is undergoing renovations, or of separated couples looking for a temporary solution… 

But in the interim, one must remind all the furnished rentals clients that they can give their notice at any time, one month in advance, and sign a one-year lease.