Is the government's housing stock doing its part?

Key Messages

• The French public housing stock is substantial in terms of volume, accounting for 10% of the total housing stock in square meters.
• Its current carbon footprint is not well understood.
• This housing stock is subject to the same energy and carbon targets as the private sector, but there is a significant delay in implementing them: no comprehensive strategic plan exists, even though there is an urgent need for radical transformation.
• The government’s role as a model for local authorities and the private sector is being called into question: in light of the looming “investment barrier” for renovation, the strategy to reduce the size of the government’s real estate portfolio must not become a strategy for the government to withdraw from addressing this challenge.

Introduction – Background

The French housing stock is currently facing a a challenge of unprecedented magnitude : To successfully decarbonize the entire commercial and residential building stock by 2050, with an interim target of a 49% reduction in GHG emissions by 2030 compared to 2015.

To achieve this, a pace of 500,000 renovations per year had to be maintained^[1]. Significant discrepancies both in terms of pace and performance The energy performance of renovations relative to the established goals now accounts for a real risk of failing to meet national targetsand European by 2030.

With the Tertiary Decree (DEET) and the law prohibiting the sale and rental of thermal strainers^[2], businesses and individuals are subject to requirements and mandates to decarbonize their building fleets.

These same regulations apply to the government housing stock, which is predominantly in the service sector, and which seems to be struggling to embrace a transformation that is nonetheless necessary.

Last December, the The Court of Auditors released a report on “the government’s real estate policy—a necessary reform to address future challenges” "^[3], providing an overview of the government’s real estate portfolio and recommendations for a successful energy transition.

This assessment raises questions about The Role of Public Parks in the French Real Estate Landscape and its role in the comprehensive decarbonization strategy for France’s power generation fleet. In this article, Carbone 4 summarizes the current situation, the challenges, and the specific prospects for this fleet.

What percentage of the housing stock is owned by the government?

The public housing stock totals 380 million square meters^[4], or about 10% of the French fleet as a whole, which measures approximately 3.66 billion square meters, including both commercial and residential space^[5].

It is located between the complex of connected buildings to the government (25% of the fleet), to the municipalities (29% of the fleet), to the departments and regions (46% of the fleet).

The Court of Auditors' report specifically analyzes the government's vehicle fleet, which accounts for 94.4 million square meters across 192,550 buildings. This state park plays a significant role when compared to private-sector players (landlords) or other European countries (60 million square meters(12 million for Germany, 6 and 7 million for Finland and Austria)^[6].
It is also characterized by the diversity of buildings, at 81% service sector, which comprise it:

• Offices (24% of government-owned properties)
• Educational or sports facilities (21%) : higher education buildings, schools, training facilities, sports facilities, etc.
• Technical Buildings (20%) : storage facilities, workshops, research facilities, laboratories, etc.
• Housing (19%)
• Healthcare or social service buildings (10%) : university campuses, prison complexes, institutional dining facilities, CROUS, …
• Cultural buildings (4%) : museums, libraries, Parisian opera houses, places of worship, …
• Other (2%) : agricultural or livestock buildings, infrastructure for utility networks and roads, …

A park subject to the same objectives as the rest of France's national parks

Given the size of the public building stock, its decarbonization is a major challenge for achieving carbon neutrality by 2050, as it is subject to two decarbonization requirements:

First, the tertiary public park (81% of the state’s building stock) is subject to a requirement under the DEET (Tertiary Sector Eco-Energy Decree) a target to reduce energy consumption in the existing building stock by 40% by 2030 compared to a reference year prior to 2020, followed by a 50% reduction by 2040 and a 60% reduction by 2050. All new or existing buildings in the state’s building stock with a tertiary sector floor area of 1,000 square meters or more are affected.

An exception was also made for all buildings belonging to the Ministry of the Armed Forces, for security reasons (reports on floor areas and sites). However, the Ministry of the Armed Forces accounts for the most important ministry in terms of office building floor space (25% of the government’s total office space), or 3.4 million square meters.

Second, the residential public park (19% of the state housing stock) is subject to the renovation requirements that apply to energy-inefficient buildings, with a ban already in place on renting out energy-intensive housing (classified as Energy Performance Certificate [EPC] G, >450 kWh/square meter) since January 1, 2023. This ban is set to gradually extend to properties with energy performance ratings of F (2025), E (2028), and D (2034), accompanied by bans on raising rents for these units and a requirement for energy audits prior to sale.

Housing renovation is a major challenge for the government’s housing stock, particularly for the ministries that own the largest share of housing in the stock, such as the Ministry of the Armed Forces (33% of the total housing area^[7]). Audits conducted on this portion of the park appear to reveal energy performance that is below the average for the French housing stock (32% rated F or G, compared with 22% nationwide), as well as than a poorer carbon performance (48% rated F or G, compared with 20% nationally)^[8][9].

A Park Falling Short of Its Goals: Obstacles Identified

At a time when the government should be beginning to transform its vehicle fleet to meet the first milestones for 2030—just six years from now—it has so far only a phase to assess the condition of its fleet and reporting of land areas.

The report by the Court of Auditors notes that the lack of information on the current state of the fleet, for which building monitoring records exist for only two-thirds of them and are complete for only a minority.

This mandatory, fundamental first step to implement decarbonization measures and monitor their progress, covered only 20% to 30% of the areas subject to the Tertiary Sector Decree (DEET) as of the summer of 2023.

The Court of Auditors notes that the government has fallen behind over the past ten years, allowing regulations to pile up. It emphasizes the need for this initial phase of information gathering and data collection before it is possible to develop a roadmap and a formalized strategyrenovationand climate change adaptation to meet the mandatory targets set by the DEET^[10].

This lack of a formalized real estate strategy is accompanied by a lack of governance tools to implement this strategy (dashboard, tracking trends)—even though they are recommended by the State Real Estate Council.

Added to this are problems related to the "investment wall" required to begin this transition, estimated by Cerema to be between 140 and 150 billion euros by 2050, as well as technical and organizational needs of the renovation sector which are already dangerously slowing down renovations in the private sector. There are many strategies available to accelerate this transition^[11] : On the critical issue of funding, proposals are available to avoid adding to the public debt^[12].

The Strategic Role of the State

The government’s role is all the more important in planning a real estate strategy for its housing stock because it occupies several functions : it is both occupant (for buildings they may or may not own) and manager (whether or not they own the buildings). It thus occupies 60% of this building stock and is believed to own 77% of the buildings it occupies^[13].

A Significant Responsibility is therefore a burden on the government with regard to the buildings it owns and operates (offices, barracks, and housing associated with government departments, etc.), whether or not it owns them.

An even greater responsibility for all buildings in which it is owner and that it leases or makes available free of charge to local governments—regions, departments, and municipalities—(for example: universities, CROUS, prestigious higher education institutions, research centers, cultural institutions, middle schools, high schools, etc.) should be taken into account: the government, in particular, can play a role in ensuring that these services are equipped as quickly as possible with the tools and pathways needed for decarbonization.

The government can set an example in the decarbonization of France's building stock. By identifying and implementing low-carbon solutions for its own buildings, the government not only sets an example for similar projects but also contributes, through the resources it mobilizes, to the development and growth of the energy-efficient renovation sector in France.

The government's policy, which aims to reduce its housing stock by 30%, poses a risk major. Without prior renovation of these properties, or without providing the new private owners with the tools and resources needed for these renovations, this could amount to a withdrawal of government involvement in the modernization of France's housing stock.
To fulfill its responsibility regarding these transferred properties, the government could establish a framework and set energy and/or carbon performance standards for the properties prior to transfer—for example, in the form of an energy performance certificate (DPE) rating, or by requiring compliance with the performance standards set forth in the Tertiary Sector Decree.

The Tools for an Ambitious Carbon Reduction Pathway

Carbone 4 provides its expertise to all stakeholders in the construction and real estate sectors to help them develop their climate strategies.
The climate strategy tools are particularly well-suited for stakeholders in the public real estate sector, such as the government and its real estate operators, public agencies, local governments, and public-private partnerships, among others.
They allow you to:

• To establish accurate and detailed energy and carbon accounting for their real estate portfolio and operations, thereby providing a clear overview and making it easier to track performance.
• From understand the climate goals and objectives to be achieved.
• From work together to develop a carbon reduction plan by examining the available options for action and assessing the necessary funding.

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