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Desperate French Government Threatens To “Requisition” Vacant Buildings

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Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Prime Minister Jean-Marc Ayrault made it official: the government would requisition vacant buildings regardless of who owned them, including office buildings. It would then convert them to apartments and make them available to the homeless and the “badly housed.”

As a first step, he asked for “an inventory of available buildings.” That list should be on his desk in “a few weeks,” he said. He was in a rush to identify these properties “so that we can undertake at least several operations in January and February 2013.” A desperate move to halt the collapse of his numbers. And another broadside at investors.

It’s getting tough for him and President François Hollande. As France sinks deeper into its economic mire, people are losing patience: those who still have confidence in Hollande plunged to 36%, the lowest level of any president six months after taking office (the data go back to 1981). He dropped to 31% among workers —a catastrophe for a Socialist—and to 21% among shop keepers, artisans, business owners, and CEOs [they’d already stirred up the pot: A Capitalist Revolt in Socialist France].

And Prime Minister Ayrault hit 34%. Among his predecessors, only Édith Cresson in 1991 and Alain Juppé in 1995 were lower. Both were sacked, Cresson 11 months into her term, and Juppé two years into his. Only 19% of the shop keepers, artisans, business owners, and CEOs had any confidence in him—despite his “gaffe” that he would be open to discussing the 35-hour workweek to bring down the cost of labor, which was followed by furious backpedaling from the entire Socialist power structure. Among workers, his confidence level dwindled to 29%. An untenable position. He should be polishing his resume.

Instead, he’d requisition buildings.

With his announcement, he backed Housing minister Cécile Duflot. She’d already pointed at the “seriousness of the situation” and declared—as the first major cold wave imposed additional risks on the homeless—that she’d study the possibility of requisitioning vacant buildings for the purpose of converting them into housing for the homeless and the “badly housed.”

To preempt the conservative opposition from having public conniptions, she dragged their former standard-bearer Jacques Chirac out of the closet. Back in 1995 when he was still mayor of Paris, he requisitioned, “as everyone remembers,” about 1,000 offices and apartments.

Requisitioning buildings and apartments is a tactic for all sides of the political spectrum. The law that authorized it was passed in 1945 to deal with the post-World War II housing crunch. And during the 1960s, over 100,000 requisition orders were issued.

Advocacy groups such as Jeudi Noir (Black Thursday) and Droit au Logement (Right to Housing) have been pressuring the government to do something about the “housing crisis.” To make a public point, they chose a famous symbol as backdrop for their press conference: 1a, Place des Vosges—a building of 1500 sq. meters (16,000 sq. ft.) that has been vacant since 1965.

I used to live not far from there and walked through the Place de Vosges a lot, always wondering why someone would allow such a valuable property to remain empty. At the time, it was visibly going to heck. Yet it’s in an awesome location, facing the garden in the middle of the square, with galleries and cafés on two sides, and no traffic—an immense luxury in Paris. Members of Jeudi Noir squatted that building for a year until they were removed in 2010, a highly mediatized affair.

Instead of doing his utmost to encourage private sector construction, Prime Minister Ayrault has jumped on the bandwagon of the squatters, sending shivers down the spines of those who invest in real estate development and construction. With perfect timing: just when France desperately needs that business to pick up speed—not only to create sorely needed housing units, but also to create jobs [Worse than the Infamous Lehman September: France’s Private Sector Gets Kicked off a Cliff].

Unemployment is over 10%, youth unemployment over 25%. In disadvantaged areas, such as a number of volatile suburbs, unemployment is far higher. For example, in Clichy-sous-Bois, an eastern suburb of Paris, unemployment is 22%, and youth unemployment is astronomical. The pressure in these areas is rising. They’ve blown up before. Jobs would relieve some of it. But requisitioning buildings and scaring investors won’t.

To counter ugly economic trends that started while Nicolas Sarkozy was still president, the government has re-unearthed the catchword “competitiveness”—entailing the cherished and untouchable 35-hour workweek, equally untouchable wages, and sky-high employer-paid payroll charges. An explosive mix. And it just blew up. Read.... Attack On France’s Sacred Cow.

 

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Fri, 11/02/2012 - 04:31 | 2940281 onebir
onebir's picture

France has quite restrictive regs on what you can do to farmhouses in tiny vilages. Probably the entire Place de Vosges has national heritage status - it's a beautiful & I think historic place - so very expensive to do anything with a buildings there. Surprised it wasn't worth (at least) converting to apartments a few years back though. Or high end retail - from what I can remember it's all jewelers & haute couture around there.

Probably Lagarde's fashion ground-zero :p

Fri, 11/02/2012 - 04:48 | 2940297 Harlequin001
Harlequin001's picture

The clue might be in the detail - no traffic = no use for retail.

I wouldn't  know, I've never been there...

Fri, 11/02/2012 - 02:21 | 2940205 e-recep
e-recep's picture

if you think capitalism can live on without converging to crony capitalism you are a fool.

Fri, 11/02/2012 - 13:05 | 2941673 NotApplicable
NotApplicable's picture

Well, only if it is "regulated" by a government, as that's the only way Crony Capitalism can exist. (Because true competition destroys any advantages gained by political capitalism.)

Fri, 11/02/2012 - 14:42 | 2942141 e-recep
e-recep's picture

does a capitalistic community without a government exist?? did it ever?

Fri, 11/02/2012 - 05:28 | 2940326 Amagnonx
Amagnonx's picture

It is only the ignorant, or those with an agenda that blame capitalism.  Capitlism is purely the freedom to exchange goods without someone else setting the price or otherwise interfering in a voluntary process.

 

Crony capitlism is only possible if the state has powers that it can sell - powers that will effect competion, powers that can be exploited for the benefit of the wealthy.  It is excess government power that creates the conditions for corruption and cronyism - regardless of the underlying political system.

 

WHile the excess of government power is the basis of the rise of oligarchy - there are also issues with capitalism as it is currently defined.

 

1)  The fraudulent system called fractional reserve - this has been deemed lawful by government.  This is a primary example of how government power can create injustice - without government support, this system would readily be identified as fraud, and would quickly be destroyed.

 

2) Charging interest on loans of money, paying interest on deposits (same as a loan) and charging rent on real estate.  THese immoral actions are not readily identified by people as a cause of social injustice - however, they conflict with the natural law, and as such should be identified as unlawful.  This is simply stealing from those who produce - lending money or renting land does not create anything, and niether money nor real estate suffer depreciation.

 

So, apart from point 2, the cause of the uneven distribution of wealth is solely caused by government.

Fri, 11/02/2012 - 14:30 | 2942090 e-recep
e-recep's picture

well, how would the transactions of the individuals within a society be regulated without a governing force? impossible.

your reasoning is understandable but you suggest no solution. it's pure utopian talk, very much like the communist utopia. i call it the capitalist utopia. it is not realistic, it cannot be implemented.

Fri, 11/02/2012 - 06:38 | 2940375 o2sd
o2sd's picture

Capitlism is purely the freedom to exchange goods without someone else setting the price or otherwise interfering in a voluntary process.

Nope, that's the free market. Capitalism is the system where the owners of capital seek to preserve and grow their capital. The free market is at odds with this goal, so capitalists seek to corrupt the free market so they can preserve their capital.

We need more free markets and less capitalism.

 

Fri, 11/02/2012 - 08:52 | 2940646 DOT
DOT's picture

Please explain. Start by offering a definition of "capital".

Sat, 11/03/2012 - 21:31 | 2945429 o2sd
o2sd's picture

Capital is what remains after costs and taxes have been paid. Sometimes referred to as 'profit', other times as 'saving', it is the excess resources that can be put to another use. Historically,that 'other use' has been war, more recently, industry, even more recently 'lifestyle enjoyment'.

Until very recently, all of this excess was 'owned' by less than 1% of the population, even today when it is pooled from millions of people, it is still under the control of around 1% of the population who first seek to preserve it, and then seek to expand it.

While free markets are very good for expanding capital they are equally poor at preserving it in all circumstances. The free market disrupts encumbants, putting invested capital at risk. It also expands capital by that disruption, but only for those who invested early. The nature of capitalism is that preservation of capital takes precedence over expansion, or, capitalists are risk-averse, but free markets are intrinsically risky. The inevitable outcome of this conflict is that when capitalists become wealthy and prosperous through the expansion of capital, they will seek to preserve that wealth by limiting the disruption of the free markets to protect their current investments. In other words, in capitalist free-market systems, corruption inevitably follows prosperity.

It's not that 'crony capitalists' have taken over the system from 'good capitalists'. The capitalists haven't changed, only the stage of the capitalist cycle has changed. Risk taking and capital expansion has given way to risk-averse capital preservation.

Fri, 11/02/2012 - 06:06 | 2940350 disabledvet
disabledvet's picture

simple solution: something to waste...er, i mean SPEND all that money on. In this case it's called REAL ESTATE. of course trying to use that as a borrowing authority has already whittled the Globaloney Econ to just Switzerland and California. Sorry...but it's "real money" time now. the uneven distribution of so called "wealth" is caused by creating DEBT bubbles that must be monetized "so that we can pay for everything." now we enter the age of "actual distribution" as wealth itself has no meaning (what's the value of Manhattan when there is no way to get there?)....but getting a bite to eat sure does...let alone owning land. to date the Government has interceded (40 plus million on food stamps) but i would argue "ineffectually." or is it "inefficiently"? forty million? a lot bigger than the Postal Service that's for sure. not as big as the deficit or the debt of course...

Fri, 11/02/2012 - 04:38 | 2940288 AnAnonymous
AnAnonymous's picture

Crony capitalism is what 'americans' call the 'american' communauty spirit when they happen not to be part of the said communauty.

Hence a simple matter of perception. There is nothing like crony capitalism.

Only 'americanism'.

Fri, 11/02/2012 - 06:32 | 2940372 malikai
malikai's picture

Not very good at spelling are you?

Fri, 11/02/2012 - 14:32 | 2942096 akak
akak's picture

 

Not very good at spelling are you?

Our Chinese troll friend is even less good at thinking, and less good yet at rationality.

But he does excel in making bigoted rambling diatribes.

Fri, 11/02/2012 - 14:45 | 2942162 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous was the Chinese citizenism national champion of the misspelling bee.

Fri, 11/02/2012 - 07:55 | 2940457 AnAnonymous
AnAnonymous's picture

Are you good at pointing spelling mistakes?

Bah, you are an 'american' so nobody should hold their breath on that.

'Americans' living in a world of fantasy. Their consent dictates how the world turns around. Or not.

Fri, 11/02/2012 - 02:12 | 2940193 buzzardsluck
buzzardsluck's picture

fuck the french

Fri, 11/02/2012 - 14:21 | 2942043 lincolnsteffens
lincolnsteffens's picture

Buzz, are you Tahitian? I got a cab from the Pepeete airport and those were the first words out of the drivers mouth when I told him I was an American.

Fri, 11/02/2012 - 11:20 | 2941247 donsluck
donsluck's picture

I had a French lover once, crazy but a wonderful lover (female). She actually touched me! But I don't think that's what you meant. So -1 for you!

Fri, 11/02/2012 - 02:03 | 2940179 otto skorzeny
otto skorzeny's picture

this is all setting up as a repeat of the 1930s quite nicely. liberal/socialist govts printing $-check. govts spending massive amounts through WPA style programs that are ineffectual-check. middle class getting pissed and scared-check. massive unemployment-check. let's see-how does this all end again?

Fri, 11/02/2012 - 14:16 | 2942011 lincolnsteffens
lincolnsteffens's picture

Ahhh, some of the WPA programs were successful. Hydro-electric power, Civilian Conservation Corp. Not too familiar with much of the WPA but lots of young unemployed men got three squares a day and minimal housing fixing up State parks around here.  They got off the streets at a minimal cost to taxpayers and left accessible public land still used by thousands every year at low charge.

Of course we couldn't let anyone live in housing like that anymore now could we. It all has to be up to current building codes. Housing then for the destitute willing to work probably would cost less than $10K today per occupant. With Boston building codes and "prevailing wage" mandates it probably comes closer to $50K per occupant.

Instead government is subsidising my town to tear up a perfectly well paved cross street by the Town Hall and put in paving bricks.  Just note the modern day logic of useless work.

Fri, 11/02/2012 - 01:56 | 2940167 Zero Govt
Zero Govt's picture

Well we all know how fab, fab, fab politicians are at understanding and meeting market needs ...the mass building programs of the British Govt post-WWII and in the 60's and 70's were nice give-aways when new but turned to crap pretty quickly, the high rise was a joke many being so badly built they collapsed (typical of any Govt program)

any idea what the private sector think of the Ministers views about the market needing housing?

are they not meeting demand, if it even exists, because planning rules and regs' make the expense so high that cheap housing is impossible to deliver?

Wolfy, regards the Place des Vosges being vacant since 1965... who owns it and what is their reason for leaving a prime bit of Paris vacant? 

Fri, 11/02/2012 - 05:33 | 2940330 Tango in the Blight
Tango in the Blight's picture

The thing was probably built with government subsidies and then left unocuppied to generate scarcity in the office space market.

Fri, 11/02/2012 - 01:53 | 2940163 Lord Koos
Lord Koos's picture

That's what the new deal was all about... it put millions of idle people to work... you're still benefiting from infrastructure built back in the 1930s.

Fri, 11/02/2012 - 09:42 | 2940844 A Nanny Moose
A Nanny Moose's picture

How am I benefitting by having a $16T tab for all that collapsingg horseshit (with interest) passed on to me, and to the next generation? Please remind me again?

UE did not drop in the 1930's solely because of The New Deal's stimulative effects, which many agree prolonged TGD 1.0. UE Started falling in 1934, which correlates quite nicely with the repeal of the Volstead Act. Market liberalization is the key.

What really put people to work was the destruction of the industial capacity of the rest of the planet in that mother of all public works projects, and the finest example of a government "solution,"  known as WWII.

Fri, 11/02/2012 - 11:18 | 2941237 donsluck
donsluck's picture

Incorrect. WWII did not lift us out of depression. Please note the rationing, mandatory recycling, shortages and suburban "victory gardens" during the war. These are not signs of economic progress. What lifted us was the end of war. And if we follow that path today, we will have the same result. Note Clinton's "peace dividend". It was real.

Fri, 11/02/2012 - 09:26 | 2940777 LawsofPhysics
LawsofPhysics's picture

Will we still be "benefiting" when that infrastructure starts to collapse?

Fri, 11/02/2012 - 02:07 | 2940187 otto skorzeny
otto skorzeny's picture

dumbass

Fri, 11/02/2012 - 01:37 | 2940139 Peter Pan
Peter Pan's picture

Before they start requisitioning empty houses, how about they "requisition" unemployed people to work for the unemployment benefits they receive.

This suggestion is not meant as retribution but rather as a means of giving some purpose and experience to people who might otherwise either fall into depression, despair or a life of crime.

I wonder if that other clever government in Spain might try the same trick or perhaps even the Obama government might try it during its second term.

Fri, 11/02/2012 - 09:41 | 2940837 HurricaneSeason
HurricaneSeason's picture

Clinton already ended "welfare as we know it"; the welfare recipients ended up government jobs. The government will be forced to downsize, not increase it's employment.  They can't keep adding trillions to the national debt even at 1% interest. Being skilled at sweeping someone with a metal detector for TSA will not translate into a high paying job in the "private sector". We don't need the roads repaved again and again when we're going down the tubes from all the jobs going to China and eroding our tax base. Something productive must be accomplished and the federal state and local governents have clearly proven that they're not that good at that.

Fri, 11/02/2012 - 07:06 | 2940399 GCT
GCT's picture

LOL Peter Hud is arleady buyimg homes!

Fri, 11/02/2012 - 02:56 | 2940239 Joe A
Joe A's picture

That would be a good idea but only if it would not take work from people that do have jobs.

Fri, 11/02/2012 - 06:11 | 2940354 disabledvet
disabledvet's picture

how about those that have work? how about those that do the work? how about those that do the work but we don't pay them because...

Fri, 11/02/2012 - 09:28 | 2940780 A Nanny Moose
A Nanny Moose's picture

Government pretends to pay them. They pretend to work.

Fri, 11/02/2012 - 05:25 | 2940324 Tango in the Blight
Tango in the Blight's picture

It always does. And then the poor guys who were laid off can go back to their old job to work for benefits. If your going to put unemployed people to work why not cut away the bureacracy and let them have a proper job for decent wages? In the end it's cheaper and makes them tax payers instead of tax burdens and you can give a big FU to the crony capitalists who love these schemes because they offer them cheap labor and the government bureaucrats who earn a living administrating the "unemployed workers".

Fri, 11/02/2012 - 01:27 | 2940129 pashley1411
pashley1411's picture

After Spain, France.   But what should be interesting is, when beset by a crisis, the instinct of the political class is to stab themselves in the gut.

Fri, 11/02/2012 - 06:32 | 2940373 malikai
malikai's picture

Odd, I always thought the first instinct of the political classes during crisis was to stab everyone else in the gut.

Fri, 11/02/2012 - 01:16 | 2940111 Joebloinvestor
Joebloinvestor's picture

Stick a bunch of gold into a French bank and watch what else is gonna get seized.

Fri, 11/02/2012 - 01:15 | 2940109 Joebloinvestor
Joebloinvestor's picture

If they wanted to put every unemployed person in France to work, all they would have to do is announce a massive reinvestment in nuclear safety.

All the generating stations need work.

Fri, 11/02/2012 - 13:01 | 2941658 NotApplicable
NotApplicable's picture

How 'bout Maginot Line 2.0?

Fri, 11/02/2012 - 00:50 | 2940078 ebworthen
ebworthen's picture

Well, why not?

If you bail out banks, corporations, insurers; why not finally bail out people?

I know, I know, it rails against your free market capitalism; but that beast is dead.

All that is left is the kleptoligarchy; which will parasitize the individual citizen along with the corporations until there is nothing left but rabid nationalism that falls to facism of one stripe or another.

The moral and social contract is utterly broken, shattered, dissolved; there is nothing left but parasitism before collapse.

Fri, 11/02/2012 - 11:50 | 2941365 gaoptimize
gaoptimize's picture

Come take it.  Are you going to use the force of Government to take what little I have left? My family has significantly reduced our lifestyle for years to set aside and prep for this collapse, meanwhile paying taxes to contribute to the 956 billion ( http://blog.heritage.org/2012/10/18/morning-bell-welfare-spending-shattering-all-time-highs/ ) being spent every year on the dependent. You've economically wounded and cornered me.  Come take it.

Fri, 11/02/2012 - 01:45 | 2940152 Lord Koos
Lord Koos's picture

That's right, when policy helps "investors" and banks it's capitalism, when it helps some average shmoe, it's socialism.

 

Fri, 11/02/2012 - 09:26 | 2940773 A Nanny Moose
A Nanny Moose's picture

Depends on the policy. If we are talking bailouts, it is more like fascism. If we are talking less coercive means of taxation, then it begins to resemble capitalism.

Thu, 11/01/2012 - 23:34 | 2939984 Stuck on Zero
Stuck on Zero's picture

I'll bet there are lots of empty rooms in the Prime Minister's palace.

 

Fri, 11/02/2012 - 03:00 | 2940242 Joe A
Joe A's picture

No, they are filled with mistresses and illegitimate children.

Thu, 11/01/2012 - 23:58 | 2940040 Dead Canary
Dead Canary's picture

Touche, Mon ami

Thu, 11/01/2012 - 23:32 | 2939978 nah
nah's picture

you didnt build that

Thu, 11/01/2012 - 23:27 | 2939962 Bindar Dundat
Bindar Dundat's picture

The next step is to identify bedrooms in houses that are not used :-)  Then have them designated as rooms for the homeless.  Works for everyone!

 

" Daddy!  Who is that man with the wiskey breath in our bathroom? "  

Fri, 11/02/2012 - 06:09 | 2940352 machineh
machineh's picture

"It's Édith Cresson after his sex change, honey.

"Just leave him alone, he's looking a little irritable."

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