The new construction crisis is getting bogged down and the year 2024 promises to be one of chaos for real estate development. If the activity of social landlords is largely guaranteed by public authorities, the effects are also felt in this area. As shown by the emergency support recently provided to Aquitanis and Gironde Habitatto constraints experienced by inCité in Bordeaux or the envelope released in the spring by Bordeaux Métropole. For Domofrance, the leader in social housing in New Aquitaine, the situation still seems to be under control.
The lessor, labeled B-Corp and based in Bordeaux, unveiled its strategy for 2024-2028 on November 16. Called “Vivant”, the project aims to find a way to maintain high levels of investment and social access. And yet, the sums invested and the housing produced will both experience a decline. “ We will not have enough equity capital or enough borrowing leverage to meet all the challenges of this crisis. », admits Philippe Rondot, its president.
Untenable investment objectives?
Domofrance plans to invest a total of 3.5 billion euros over ten years in construction and thermal renovation, i.e. a target of 350 million annually, compared to 4 billion euros announced in 2019. A lowered threshold but which even appears difficult to maintain in the short term since in 2022 the lessor has mobilized only 199 million euros, down 6% over one year, compared to 250 million announced. In terms of new construction, Domofrance is suffering in the same way as its counterparts from the halt in real estate development. 20% of the production objective for social housing is no longer delivered. “ Social landlords are no longer able to fulfill their countercyclical mission. Because of the crisis, there are 400 homes each year that we cannot produce », evokes Francis Stéphan, the general director, on an annual objective of 2,000 housing units.
Signs of slowdown which worry employer representatives, members of the lessor’s board of directors alongside professional unions. “We are rediscovering that to have an attractive territory, employees must be housed! Our needs are very strong in Gironde, there is a shortage of 66,000 housing units, including 49,000 in the mainland! »insists Mathias Saura, the new president of Medef Gironde.
Real solidarity sale and lease as relief
Although the situation is tense, Domofrance’s finances are in good shape. In 2022, the lessor achieved a record turnover of 261 million euros, which is expected to increase further this year. Whatever their situation, social landlords are forced to maintain ambitious levels of investment in thermal renovation to meet regulations which will prohibit the rental of housing classified G in 2025, F in 2028 and E in 2034. Domofrance aims its share reduced the emissions from its fleet by 15% and wants to mobilize 700 million euros to achieve carbon neutrality in 2040.
Access to borrowing is always made easier thanks to the State guarantee alongside landlords, but to cope with the overall increase in production costs, the sale of part of the rental stock has become anchored in the practice. Each year, Domofrance sells 300 to 350 homes out of a total stock of 40,000 units in New Aquitaine. Enough to increase equity capital, even if some mayors refuse to see social housing come under private ownership. Another means, the real joint lease (BRS) which allows land and buildings to be dissociated in order to only offer the second for sale. Domofrance generates 300 each year. Ways to give some breathing space and hope to limit the damage from the predicted storm.