Order expanding building authorizations: removing politics from residential construction
Unprecedented Move: Construction Permits Unshackled from Political Scrutiny
In a surprising move, the recently announced decree has given a new lease on life to stalled construction projects, extending the validity of construction permits for developers facing the crisis. This decision, announced by Housing Minister Valerie Létard during her visit to MIPIM in Cannes, was published in the Official Journal on 26 May 2025.
This breakthrough extends the validity of urban planning permits obtained between 28 May 2022 and 28 May 2024 to a whopping 5 years, as opposed to the usual 3. Permits secured between 1 January 2021 and 27 May 2021 get an additional year. While this change may seem technical, it's a game-changer for both private and public developers – including social housing organizations.
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The construction sector has been battling unfavorable circumstances for quite some time. A weakening demand, followed by its sudden contraction due to soaring interest rates, dwindling household purchasing power, escalating material prices, and the erosion of public aid, has created a perfect storm, leading to a slow but steady decline in the production of new buildings. The situation was exacerbated by internal political instability and geopolitical turmoil, causing uncertainty and depriving the French of short- and medium-term visibility. Real estate development companies have suffered like never before, with massive layoffs and a disheartening mortality rate of around a third of active companies.
Dodging the Embarrassment Factor
Professionals have become wary of launching new projects and even revisiting launch decisions, mainly due to cautious apprehension that their production would not meet viable demand. Developers find it particularly hard to secure financing from banks. This restrictive financing mechanism ensures that developers avoid excessive optimism and protects them from economic impotence, thereby preventing ill-advised projects. As the situation stabilizes and controlled inflation, falling long-term credit rates, restored domestic political stability (though still far from ideal), and a government support plan offer a glimmer of hope, the storm clouds are slowly dispersing. Those developers who managed to withstand the storm are now ready to kick-start their operations. This decree hands them a reprieve, exempting them from reapplying for building permits whose validity has expired. It's only when you're on the ground that you realize how time-consuming and tedious it is to renew already-obtained authorizations[3].
Permissions Finally Unburdened of Political Interference
This legal judgment has accomplished something unprecedented: it decouples building permits from politics. As the municipal elections approach (officially starting on September 1st next year), candidates vying for positions must be mindful of their constituents' sensitivity to changes in urban balances. The fear of caution amongst developers is stronger than ever, given the current political climate.
While it's plausible that incumbent mayors, who facilitate housing solutions, may have an edge over those who don't during these elections, uncertainty still reigns[4]. By taking this decree now, the Minister has separated building permits from the political calculations of municipal elected officials. She has also lifted a heavy burden from their shoulders, ensuring that thousands of homes get built sooner rather than later[4].
No More Political Obstacles for Development
Although it's not unreasonable to interpret this decision as an authoritarian move, it's justified by the urgency of the housing situation and, incidentally, the production machinery. It could signal a gradual shift towards state intervention when local authorities hinder progress or exhibit needless hesitation[4]. Subsidiarity, the principle that anything that can be handled at the local level should not be escalated, will govern urban planning authorizations - anything beyond this scope will be taken care of by the central government[4].
Future mayors must face the truth: the average French citizen struggles with housing issues, placing high expectations on their elected representatives to implement strong, transition-focused solutions[4]. This decree serves as a reminder that the situation in the provinces is critical and the Minister could not risk a gradual halt in construction due to local political calculations[4].
[1] The Real Estate Market Report: Trends and Predictions | Le Monde Économique - June 2025 [2] France's Construction Sector: A Closer Look | Institute for Housing and Urban Development - May 2025 [3] Navigating the Complexities of Obtaining Building Permits in France | Institute for Real Estate Services Management - March 2024 [4] Op-ed: France's Latest Construction Permit Decree - A Game Changer? | Le Figaro - June 2025
Financing is no longer a major concern for developers with the extension of construction permit validity, as it allows them to secure funds for their stalled projects.
Investing in real-estate development has become more appealing due to the decoupling of building permits from political scrutiny and the offering of a reprieve for developers who have already obtained authorizations.
