The reform of the DPE, which measures the energy and environmental performance of homes, has an impact on the real estate market. Focus on its consequences for the old energy-intensive building park of Seine-Saint-Denis (93).
For nearly nine out of ten French people, the classifications used in the energy performance diagnosis (EPD) are an important selection criterion in their purchase decision (DRIMKI / BVA study, November 2021). Mandatory for sales since November 2006 and for rental of housing since July 2007, the DPE provides information on the energy consumption of a property and the associated greenhouse gas emissions, thanks to an energy classification ranging from A (best energy performance ) to G (worst energy efficiency). This is a strategic issue for the Seine-Saint-Denis department. Energy rehabilitation is a priority for the councilorship, which has set itself the goal of carrying out sustained and planned thermal renovations of private and public homes, favoring old buildings. With around 615,000 housing units, homes are the second largest source of greenhouse gas emissions in the department.
The growing importance of EDC
Two factors reinforced the importance of EDC for the real estate market. First, its recent reform, in the framework of the Law n. 2018-1021 of 23 November 2018known as Elan, which came into effect on 1uh July 2021, with the aim of enabling a more readable and representative assessment of a building’s performance. The so-called “actual consumption” method, based on the examination of invoices, has been abolished in favor of the method which consists in evaluating the characteristics of the property: housing type, insulation, heating, etc. Furthermore, the final label assigned is a synthesis of two pieces of information, the energy consumption and the amount of greenhouse gas emissions emitted by the accommodation. It depends on the worst performance, in primary energy or greenhouse gases (double threshold system). This reform is likely to result in changes in energy classes for many goods.
New obligations for owners
The second factor at work, after the law n ° 2019-1147 of 8 November 2019Energy and climate, the law n ° 2021-1104 of 22 August 2021, Climate and Resilience which imposes new obligations on property owners. Its provisions are intended to encourage owners to rehabilitate their property and are based on the classifications used under the DPE. From 25 August, landlords can no longer increase the rents for accommodation classified as F and G at the time of the move, or change them during the lease. A 1uh January 2023, energy performance will be taken into account to assess the decent character of the housing. Goods whose consumption exceeds 450 kWh / m2 / year can no longer be rented. From 2025, properties classified G can no longer be rented. In 2028 this ban will extend to properties classified F and in 2034 to properties classified E.
Critics target the ECD
In its fifteen proposals for the simplification of the law, published last September, the Superior Council of the Notary (CSN) recalls the transitional regime applicable to the old energy performance diagnoses (DPE) until the end of 2024. The reform of the DPE has allowed to set up new ways of calculating the DPE in order to make it more precise and reliable for the DPE. Even though the DPE entered into force on 1uh July 2021, the diagnostics carried out between 1uh January 2013 and December 31, 2017 can be used until December 31, 2022. As for diagnoses made between 1uh January 2018 and June 30, 2021, remain valid until December 31, 2024. To the extent that “ the schemes adopted elsewhere in other texts that impose sometimes quite restrictive measures for the energy requalification of less efficient housing “, the Superior Council of Notaries judges these measures” neither consistent “,” nor pertinent “. The measures envisaged by the Law of 22 August 2021 , n.2021-1104, Clima e Resilienza, therefore appear inconsistent with the fact that it remains legally possible to continue to attach to preliminary contracts and deeds of sale of old DPE, until 31 December 2024.
An old building stock for the departments of Seine-Saint-Denis
For real estate in the Seine-Saint-Denis department, these new rules represent an important issue. Two thirds of the dwellings were built before 1975, when the first thermal regulations came into effect. Although energy renovation is a priority for the department, which has set itself the goal of carrying out sustained and planned thermal renovation of private and public homes, favoring old buildings, the number of energy screens remains high. These are the most energy-intensive goods, corresponding to classes F and G of the DPE. According to data from the Ministry of Ecological Transition for 2020, these thermal filters represent 17% of French real estate assets. These thermal sieves are unevenly distributed over the territory. They are about 5% in the Seine-Saint-Denis department, or 34,545 homes affected (Fideli 2018 study, based on the DPEs made between 2017 and 2018 by ADEME).
What impact on the rental stock?
According to a survey conducted last September by the National Real Estate Federation (Fnaim) among its members, rental managers and trustees, only 32% of the owners concerned intend to undertake an energy renovation. 31% of owners plan to re-let their properties as they are and 6% of them imagine opting for short-term rentals. In fact, for the moment the owners of tourist rentals are not subject to energy requalification obligations. Short-term seasonal rentals using collaborative platforms like Airbnb or Abritel would then allow them to get rid of it. And about 26% of affected landlords plan to sell their property rather than carry out the necessary energy renovations. FNAIM sees a strong risk of reducing private rental stock, “at least 250,000 fewer rental units across France,” summarizes Jean-Marc Torrollion, president of Fnaim. According to data from the platform https://www.seloger.com/, sales of energy filters have already increased in the last twelve months, + 72% in Paris, + 74% in Rennes, + 70% in Nantes, + 43% in Lyon and Toulouse, + 41% in Lille, + 27% in Bordeaux and Aix-en-Provence.
Obstacles to sensitive energy renewal in Seine-Saint-Denis
If few owners are planning to start energy works, it is mainly due to the cost of the renovation, a brake cited by nine out of ten respondents. Furthermore, the complexity of the energy work to be carried out worries the owners who are alarmed by the technical difficulty of carrying out the work, for 62.8% of them, and by the need to submit this work to the decision of the general assembly. condominium (42.7%). “The technical difficulties raised in co-ownership challenge us, observes Jean-Marc Torrollion. The restructuring of the private rental assets concerns two thirds of the condominium buildings in the city center. It is necessary to contractually plan the energy requalification fulfilments inside the condominiums ”. The real estate assets of Seine-Saint-Denis, characterized by a high percentage of individual houses and buildings in micro-collective or single ownership, the challenges of energy requalification are particularly affected by these difficulties.
The challenges of energy redevelopment of condominiums
To be successful in the energy renovation of condominiums, FNAIM proposes a global strategy. First of all, it is a question of contracting out, through the multi-year work plan in co-ownership, the eradication of all energy-intensive homes from the private collective assets. Its adoption would automatically result in the suspension of the rental ban on energy-intensive individual housing located in the building for the ten years of the PPT. This solution would make it possible to guarantee the start of the works, ensuring solidarity between condominiums lessors and occupants, and allowing the co-owners to share the cost of the work. FNAIM proposes that the collective DPE be enforced and of greater value than an individual DPE, in order to encourage co-owners to engage in an ambitious restructuring plan, avoiding painful disputes within the co-owners themselves. The FNAIM proposes to extend the energy redevelopment objectives to the entire building stock with class F as a minimum standard of energy performance out of 1uh January 2030. In practice, these obligations would also apply to the owner-occupying families at the time of the transfer of the property. Finally, in order not to base the financial effort exclusively on public aid, the FNAIM proposes to diversify the financing solutions, which involves the development of banking products oriented towards co-ownership, through a principle of State guarantee for restructuring loans to condominiums and creation of a savings product, to facilitate the effective completion of the renovation work at the time of purchase.
What impact on the property market in Seine-Saint-Denis?
In addition to the impact on the rental market, these new obligations also affect the sale prices of these properties, the famous green value, which corresponds to the change in value generated by the energy and environmental performance of a property. On tense real estate markets such as those of the Grande and Petite Couronnes, the effect of the less good energy labels of the DPE (class FG) on the prices of old apartments remains weak (-2% loss in value) (The green value of housing in France, office of French notaries, November 2020). It is a little more important for homes. Likewise, the added value provided by the best ECD labels remains moderate. In Seine-Saint-Denis, the majority of real estate sales (91%) are for old properties. The market is particularly dynamic. In the first quarter of 2022, apartment sales increased by 16% compared to the first quarter of 2021, according to statistics from Ile-de-France notaries. In the first quarter of 2022, annual price increases reach 3.8%. The city of Saint-Ouen-Sur-Seine has just climbed to fifth place in the ranking of the most expensive cities in France. The perspectives opened by the Grand Paris Express and the upcoming Olympic Games help to strengthen the real estate dynamism of the department, particularly in the old buildings. In this context, the green value effect is still marginal.