Disclaimer: this article is for informational purposes only and does not constitute legal, tax, or investment advice. The IPP report it summarises is an academic evaluation, not a regulatory text. Always consult a qualified professional for advice on your specific situation.
In May 2026, the Institut des politiques publiques (IPP) — the research institute jointly run by PSE-École d’économie de Paris and the ENSAE-ENSAI group — published Note IPP n° 125, its evaluation of the rent-control experiment launched by article 140 of the Loi Elan in 2018. It is the most rigorous quantitative assessment to date of how the cap has actually worked across the nine French territories that opted in between 2019 and 2025. And it lands at a politically charged moment: under the terms of the law itself, the experiment expires in November 2026 unless parliament extends it.
For any foreign landlord holding property in Paris, Lyon, Bordeaux, Lille, Montpellier, Plaine Commune, Est Ensemble, the Pays Basque, or Grenoble-Alpes Métropole, the IPP’s findings matter operationally — and the November 2026 deadline matters strategically.
What is the encadrement des loyers, in two paragraphs
The cap was first introduced by the Loi Alur in 2014, suspended after a 2017 administrative-court ruling, then reinstated as a voluntary experiment by article 140 of the Loi Elan in 2018. Local authorities in zones tendues — areas with documented housing-market tension — can apply to opt in. Once approved, the préfet sets annually, by arrêté, a loyer de référence (the median rent per square metre observed for each category of dwelling) and a loyer de référence majoré, equal to 120% of that median. The base rent on a new lease cannot exceed the majoré ceiling.
A landlord can add a complément de loyer on top of the majoré, but only if the property has exceptional comfort features that justify it. The criteria are defined only by case law — there is no exhaustive list — and the IPP found this ambiguity is one of the main reasons the regime is hard to enforce.
Where the cap currently applies
Nine territories cover roughly 870,000 dwellings and around €12 billion in annual rents, per the IPP’s count. The roll-out has been staggered:
- Paris — since July 2019
- Lille, Hellemmes, Lomme — March 2020
- EPCI Plaine Commune (Seine-Saint-Denis) — June 2021
- Lyon and Villeurbanne — November 2021
- EPCI Est Ensemble (Seine-Saint-Denis) — December 2021
- Montpellier — July 2022
- Bordeaux — July 2022
- Pays Basque (24 communes) — November 2024
- Grenoble-Alpes Métropole (21 communes) — January 2025
The Pays Basque and Grenoble are excluded from the IPP’s quantitative analysis — they joined too recently to produce reliable five-semester data — but the cap is fully in force in both.
The headline finding: rents are 2–4% lower, reaching 5% by end of period
Using a panel of 30 million unique rental ads collected by Yanport between 2015 and 2024 and a staggered difference-in-differences design, the IPP estimate that after two years of the cap being in force, listed rents in regulated zones sit 2% to 4% below the level observed in comparable unregulated zones — with the effect reaching 5% by the end of the period studied.
The result holds across all three territory groupings the authors analysed separately: Paris intra-muros, the Seine-Saint-Denis EPCIs, and the provincial city centres. The effect is also broadly homogeneous across dwelling sizes — small studios and large family flats see similar percentage reductions.
This confirms and extends earlier work commissioned by the APUR (Atelier parisien d’urbanisme), which had found a roughly 5.2% moderation effect in Paris specifically. The IPP go further by analysing the Seine-Saint-Denis EPCIs and the provincial cities, where no equivalent prior evaluation existed.
The compliance gap: more than a third of recent leases sit above the cap
This is where the analysis gets uncomfortable. Using the Gérer mes biens immobiliers (GMBI) database — the lease-declaration platform built by the DGFiP — the IPP measured how many recent leases actually respect the majoré ceiling.
| Territory | Below cap | Within 5% of cap | Above cap |
|---|---|---|---|
| Paris | 45.2% | 19.2% | 35.6% |
| Est Ensemble | 43.2% | 15.5% | 41.3% |
| Plaine Commune | 42.5% | 15.3% | 42.1% |
| Lille, Hellemmes, Lomme (post-2024) | 44.9% | 15.9% | 39.2% |
| Lyon & Villeurbanne (post-2023) | 48.5% | 17.3% | 34.2% |
| Montpellier | 54.1% | 19.6% | 26.3% |
| Bordeaux | 38.8% | 17.7% | 43.5% |
More than one in three recent leases across the regulated zones — and more than two in five in Bordeaux, Est Ensemble, Plaine Commune, and Lille post-2024 — were signed at a rent above the majoré ceiling. The IPP are careful: the data don’t distinguish between legitimate compléments de loyer, abusive compléments, outright infractions, and avoidance through unregulated segments (bail civil, coliving, furnished tourism rental). That distinction is one of the report’s central recommendations for future statistical infrastructure.
Why so many breaches: the enforcement architecture is weak
The IPP’s qualitative work — interviews with préfectoral services, EPCI agents, Commissions Départementales de Conciliation, and Directions Départementales de la Protection des Populations (DDPP) — found two structural reasons compliance is patchy.
First, governance is fragmented. Each territory has its own coordination pattern between préfecture, EPCI, Commission Départementale de Conciliation, and competition authority. Paris alone holds a delegated sanction power; everywhere else, the préfectoral services report a chronic shortage of dedicated headcount. The application of the cap rests, in practice, on the local authority’s information campaigns and on tenants signalling violations themselves.
Second, enforcement is tenant-led. The legal route in case of a breach depends on which type of violation — a base rent above the majoré is contested differently from an abusive complément de loyer — and the deadlines are short. The proof burden sits on the occupant, who is often the structurally weaker party and may simply not signal.
Add in the complément de loyer’s ambiguity (criteria defined only by jurisprudence, no exhaustive list of qualifying comfort features), and you have a regime where a third of leases above the cap can persist without anyone facing real consequence.
What the cap has done to supply
This is the IPP’s most cautious finding. In the provincial city centres, the volume of rental ads relative to the housing stock contracted measurably after the cap came in — by roughly one fewer ad per 100 dwellings five semesters after introduction, equivalent to an 8% drop versus the 2015 baseline.
Similar contraction shows up, less statistically robustly, in the Seine-Saint-Denis EPCIs.
Paris is the outlier. Between 2020 and 2022, ad volumes there actually rose — but this is the post-COVID tourism collapse pushing former short-term lets back onto the long-term market, not an effect of the cap. The IPP explicitly flag this as a confounder.
The crucial caveat the authors put on this finding: a drop in ad volume isn’t necessarily a drop in supply. It could be longer tenant tenure (the “lock-in” effect documented in US rent-control studies); it could be a shift to off-listing channels (social media, word-of-mouth, coliving operators); or it could be genuine supply withdrawal. Distinguishing these will require the next round of population-census data, currently scheduled for later releases.
The statistical-infrastructure problem
A recurring theme of the report: France’s data architecture for tracking the rental market is broken.
The Observatoires Locaux des Loyers (OLL) — the local rent observatories that produce the median figures the préfet uses to set each year’s ceiling — have sample sizes too small to track new leases reliably, and they cannot identify compléments de loyer at all.
The suppression of the taxe d’habitation in 2022 — politically a tax cut for the middle class — eliminated the most reliable fine-grained source of information on who occupies which dwelling. Researchers and policymakers have been working with diminished visibility ever since.
The IPP’s first recommendation is to build a national rental registry anchored on the GMBI database, with mandatory declaration of lease information. Without it, the next evaluation of any rent-control policy will be just as data-constrained as this one was.
What happens in November 2026
Under article 140 of the Loi Elan, the experiment expires in November 2026. Three scenarios are possible.
1. Sunset, no successor. Parliament lets the experiment lapse. All nine territories revert to the underlying nationwide regime — IRL-indexed rent increases between two leases or at renewal, no cap on new leases. Practically, every landlord in Paris, Lyon, Bordeaux, Lille, Montpellier, Plaine Commune, Est Ensemble, the Pays Basque, and Grenoble would regain free rent-setting on a new lease.
2. Renewal as an experiment. Parliament extends the experimental framework for a further period — the politically cheapest option, and the one the existing political coalition supporting the cap is likely to favour.
3. Pérennisation. The cap becomes permanent and national law, possibly with adjustments to the loyer de référence formula or the complément de loyer criteria. This is the option the IPP report effectively pushes back against in its concluding section: it calls for a circumscribed use of the cap, “both in space and in time”, combined with structural housing-supply policies and land-taxation reforms.
The political signal from the IPP report is unusual for an academic evaluation: it is not neutral. The authors explicitly recommend against permanent national extension, and they explicitly call out the cost-benefit balance as deteriorating with time. For foreign landlords, that means the November 2026 deadline could go either way depending on the political composition of the parliament voting on it.
What this means for foreign landlords with property in regulated zones
Three operational points emerge.
1. If you currently let a property at a rent above the majoré, your exposure runs through tenant action. The IPP’s data show this is the prevailing pattern, not the exception. But the moment the lease is signed, the tenant can challenge the rent through the Commission Départementale de Conciliation or directly in tribunal judiciaire. The deadline is short. The court’s reading of “complément de loyer” criteria, in the absence of statutory clarity, varies by territory.
2. The November 2026 expiry creates a planning horizon. A new lease signed in October 2026 is locked under the cap for the term of the lease, regardless of what parliament does in November. A new lease signed in January 2027, in a sunset scenario, would face no cap. The decision on when to re-let — if you have the flexibility — is non-trivial.
3. Substitute-channel use is documented but politically vulnerable. The IPP explicitly mention furnished tourism rental, coliving with services, and bail civil as channels through which dwellings exit the regulated segment. The 120-day Airbnb cap on primary residences and the prefectoral classement obligations have already tightened the tourism route. The bail civil and coliving routes remain available but are under increasing scrutiny — and a future tightening would close them.
What to watch between now and the vote
Three things will move the November 2026 outcome.
First, the IPP report itself. It was commissioned by the government in 2025 with cross-ministry support from the Inspection générale des finances (IGF) and the Inspection générale de l’environnement et du développement durable (IGEDD). Its recommendations carry institutional weight.
Second, the academic case for land-value taxation — cited approvingly by the IPP through the work of Trannoy and Wasmer (Le grand retour de la terre dans les patrimoines, Odile Jacob, 2022) — is gaining ground in the policy community. The IPP’s framing pushes the debate beyond “renew or sunset” toward “replace with something better”.
Third, the local-authority lobby, particularly from Paris, Lyon, and Bordeaux, will push for at least renewal. The mayors of those cities have been among the strongest political supporters of the cap.
The companion piece to this article looks at the report’s other major finding — that one-third of the €612 million annual transfer to tenants is in fact financed by the State through reduced tax and social-charge receipts on rental income.
FAQ
What is the encadrement des loyers in France?
It is a rent-cap mechanism introduced by article 140 of the Loi Elan in 2018 as a voluntary experiment for local authorities in zones tendues. The base rent on a new lease cannot exceed the loyer de référence majoré, equal to 120% of the median rent observed for each category of dwelling. A landlord may add a complément de loyer only if the property has exceptional comfort features.
Which French cities have rent control?
As of 2026: Paris, Lille (with Hellemmes and Lomme), the EPCIs of Plaine Commune and Est Ensemble in Seine-Saint-Denis, Lyon and Villeurbanne, Montpellier, Bordeaux, 24 communes of the Pays Basque, and 21 communes of Grenoble-Alpes Métropole. Together these cover roughly 870,000 dwellings.
When does the rent-control experiment expire?
The experimental framework set by article 140 of the Loi Elan is scheduled to expire in November 2026. Parliament will need to vote on whether to let it sunset, extend it as an experiment, or make it permanent. The IPP report recommends against permanent national extension.
How is the loyer de référence calculated?
It is set annually by the préfet, by arrêté, based on median rent observations from the Observatoires Locaux des Loyers (OLL). Rents are stratified by location, number of rooms, period of construction, and lease type (furnished or unfurnished). The majoré ceiling equals 120% of the median for each category.
Can a landlord legally charge above the cap?
Yes, through a complément de loyer, but only if the property has exceptional comfort features that justify it. The criteria are defined by jurisprudence rather than statute, which is one of the main sources of enforcement difficulty the IPP identified.
What share of recent leases are signed above the cap?
According to the IPP’s analysis of GMBI lease declarations through 31 December 2024: 35.6% in Paris, 41.3% in Est Ensemble, 42.1% in Plaine Commune, 39.2% in Lille post-2024, 34.2% in Lyon-Villeurbanne post-2023, 26.3% in Montpellier, and 43.5% in Bordeaux. The data do not distinguish legitimate from abusive overages.
Does the cap apply to furnished rentals?
Yes. The cap applies to unfurnished and furnished dwellings let as a résidence principale. Furnished tourism rentals (short-term lets, including the regulated Airbnb segment), coliving with services, and bail civil arrangements are outside the cap — but the IPP identifies these as significant avoidance channels.
A note on sources
This article draws on the Institut des politiques publiques’ Note IPP n° 125, “L’encadrement des loyers : quels effets redistributifs ?” by Guillaume Chapelle (CY Cergy Paris Université, LIEPP-Sciences Po) and Gabrielle Fack (Université Paris Dauphine-PSL, PSE), published May 2026, and the accompanying conference-press slides by the same authors (April 2026). The underlying mission report, commissioned by the government in 2025 with support from IGF and IGEDD, is co-authored by Chapelle, Fack and Agathe Rosenzweig. The Trannoy-Wasmer reference is to Le grand retour de la terre dans les patrimoines (Odile Jacob, 2022), cited in the IPP report’s bibliography.
