On July 1, 2022, the city of Montpellier implemented a decree to regulate rents within the municipality. The aim is to enable as many people as possible to have access to housing commensurate with their income. What will be the impact of this measure on yearly rentals and seasonal rentals? More information with our AirBNB concierge in Montpellier.
Rent control in Montpellier: who is concerned?
Faced with the housing access crisis in the municipality of Montpellier, the Prefect of Hérault signed the rent control order on May 24, 2022, which came into force on July 1, 2022. This control should make it possible to limit the increase in rents in sectors experiencing high real estate pressure and avoid excessive rents. The rent framework determines a reference rent, a floor household and a ceiling household not to be exceeded. This new measure is mandatory.
The rent framework applies to leases signed as of July 1, 2022. This concerns empty and furnished rentals, main or mixed-use residences, and mobility leases. Conversely, HLM housing, ANAH (National Housing Agency) approved housing, those subject to the 1948 law, furnished housing operated or managed with services and finally seasonal rental contracts.
Each year, the Prefect of Hérault sets the terms and conditions for controlling rents. It defines a reference rent, an increased reference rent (20% higher than the reference rent and which constitutes the ceiling not to be exceeded) and a reduced reference rent (30% lower than the reference rent). This rent is determined by 4 criteria: the geographical area, the number of rooms, the period of construction and whether it is empty or furnished. These rents are indicated per m² of living space and excluding charges.
What are the consequences for long-term rentals?
The control of rents in Montpellier is an increasingly discussed subject. The town hall strives to regulate rents in order to maintain a balance between the well-being of tenants and the profit of landlords. The strategies for setting rents are different depending on the duration of the rental. In long-term rentals, the rent is set according to market standards, while in seasonal rentals, the rent is set according to demand and market rates. Long-term rentals are generally more advantageous for landlords than for tenants. Landlords can set rents based on market standards, providing them with regular and predictable income. Tenants, on the other hand, face higher rents and are forced to take out long-term leases to get better rates.
The town hall of Montpellier has put in place measures to regulate the rents of long-term rentals. These measures aim to limit excessive rents and protect tenants against abuse by landlords. Public bodies such as the Agence immobilière de Montpellier ensure that rents remain within the set limits. The town hall has also introduced a rent review mechanism that allows tenants to request a reduction in rents in the event of an unjustified increase.
A minimal impact on the seasonal rental?
With regard to seasonal rentals, rents are determined according to demand and market rates. Owners or managers such as YourHostHelper agencies can adjust their rents according to the season, major events or even weather conditions. In other words, the rents for Airbnb rentals are not regulated by prefectural decree or by the ceilings applied to tight areas but by the market itself. For a property with similar characteristics, rents will generally be higher in season for seasonal rentals than for long-term rentals. As demand dries up in low season, Airbnb rental rents tend to drop. In tourist destinations, the absence of a rent ceiling allows seasonal rentals to offer much higher yields than long-term rentals.
Thus and as everywhere in France, the town hall of Montpellier does not regulate the rents of seasonal rentals. However, she ensures that landlords offer reasonable rates and that tenants enjoy a safe and healthy environment. The town hall also sets up awareness campaigns to inform tenants of the illegal practices and abuses of certain landlords.
Vacation rentals in Montpellier are very popular, as they offer visitors the opportunity to enjoy all the activities the city has to offer. Visitors can choose from a wide variety of rental apartments: more than 5000 accommodations are offered, almost as many as the number of rooms in traditional hotels, with 4 hotel rooms for 566 establishments and 89 residence rooms, according to figures from the tourist office. Vacation rentals in Montpellier are very affordable and there is something for every budget.
In short, the impact of regulated rents on seasonal rentals in Montpellier can only be indirect. By limiting the profits generated by long-term rentals, the municipality could encourage more owners, looking for profitability, to take an interest in putting their property up for seasonal rental. This, as many cities have already seen, can lead to a significant disruption of the real estate market, as we mentioned in this article evoking the principle of compensation now applied in the Basque Country. In fact, if the rents are not framed for short-term rentals, their operation is. Indeed, it is now mandatory to register on the Montpellier Méditerranée Métropole website. This act allows hosts to obtain a registration number which is displayed on their listing. This number is also mandatory for old advertisements: without it, the advertisement is purely and simply deactivated.
The opinion of the AirBNB concierge service in Montpellier
Angelique Michel, director of our concierge service in Montpellier, perceives rent control rather positively: “Rent control is intended to regulate the rental market and limit its excesses. In some areas where demand is very strong, rental prices tend to soar. The majority of LLD (long-term rental) owners still charge rents that are fully compatible with maintaining a healthy real estate market. This framework will therefore only impact certain rentals at prohibitive rents. This regulation therefore seems to be going in the right direction: it protects tenants from abusive rents without harming the dynamism of the market and the ambitions of landlords. ".
In the context of seasonal rentals, YourHostHelper reminds you that the adjustment and optimization of prices per night for accommodation in rental management is included in our services. This adjustment takes into account the market but also the standards and rules in force such as the rent control in the Montpellier municipality.
In short, the municipality of Montpellier takes the theme of rental to heart on its territory. By regulating the rents of long-term rentals and controlling the registration of seasonal rentals, it seems to ensure that it maintains a certain control of its real estate market. If the impact of this new regulation is only indirect on Airbnb rentals, it is however the reflection of a complicated general situation: in Montpellier as elsewhere, the real estate market is very dependent on the general context and the municipalities take care to get involved in it in a concrete way in order to preserve and stimulate as much as possible the attractiveness of their territory.
