Reforming French housing benefits: why not merging benefits?

Résumé En

Involving 18 billion euros in public expenditure, individual housing benefits represent almost half of the budget for housing policies in France. The effectiveness of this aid has, however, been called into question by a series of empirical studies showing that the greater part of it is appropriated by landlords in the form of higher rents. In addition, this aid strongly penalises the return to work in modest households because it is badly coordinated with other social benefits. To respond to these criticisms, the Institute for Public Policy studied several reform scenarios aimed at restoring the effectiveness of this social policy. The most promising option consists of combining individual housing benefit with other measures of household benefit, in particular the Revenu de solidarité active (RSA – low-income benefit) and the Prime pour l’emploi (PPE – employment bonus). Such a reform would considerably simplify the complex architecture of social benefits, reduce the gains made from the public aid by landlords and preserve the gains made by a return to paid work.