Organisme de Foncier Solidaire de la Métropole Lilloise (OFSML)

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Organisme de Foncier Solidaire de la Métropole Lilloise (OFSML)

Mismatches Price Financing
Policies and regulations Local policies Regulation
Promotion and production Public promotion Cooperatives
Ownership and tenure Shared ownership Protection of social housing

Main objectives of the project

The Organisme de Foncier Solidaire (OFS) focuses on ensuring long-term housing affordability through an innovative lease model that separates land and property ownership. Established in Lille and approved by the State, the OFS acquires land and partners with developers to build affordable housing units. This model prevents land speculation, keeps housing costs low, and guarantees that homes remain affordable for future generations, thereby addressing housing needs for households with limited financial resources.

Date

  • 2017: Implementation

Stakeholders

  • OFSML

Location

Continent: Europe
Country/Region: France, Lille

Description

The City of Lille, with a population of 228,000, is the 10th largest city in France, comprising 138,000 housing units. Seventy percent of its residents are tenants, reflecting a tight housing market with a 25% turnover, a 5% real vacancy rate, and over 16,500 requests for social housing. Lille ranks as the 4th most expensive provincial city in the existing market (€3,130/m²) and the 3rd most expensive in the rental market (€13.9/m² in 2017). Despite this, Lille's median income is 17% lower than the national median. Housing prices in Lille tripled between 2000 and 2011. To address these challenges, the City of Lille set a goal of 10,000 new housing units from 2014 to 2020, with a focus on equal distribution of social and affordable housing. Various tools support this initiative, such as the Reserved Site for Housing (Emplacement Réservé pour le Logement – ERL), land action, and social diversity obligations (servitude de mixité sociale). Despite anti-speculation clauses, affordable housing is not permanently socially-oriented, as original buyers can sell back to the free market. Consequently, Lille has been exploring new models for securing permanently affordable homeownership.

The "Organisme de Foncier Solidaire" (OFS) is a non-profit organization, approved by the State on July 20, 2017, designed to tackle these housing issues. Lille's OFS, the first in France, operates on a metropolitan scale, acquiring and managing land to support the construction of housing for households struggling to find decent housing. This model neutralizes land costs over time, reducing housing costs and increasing affordability. The OFS grants a lease known as “Bail Réel Solidaire” (BRS), which only OFS can use. While the OFS does not directly build housing, developers do so under BRS conditions: resource thresholds, sale price limits, principal residence requirements, and appropriate housing size for household size. The BRS is valid for 19 to 99 years and can be renewed upon ownership changes.

The OFSML is the first OFS approved by the State, aiming to introduce a new ownership approach that treats land as a common good, ensuring permanent affordability and better use of public funds. The model also secures households with the BRS lease. Projects under the OFSML, like the Cosmopole project (developer: Finapar), follow the Community Land Trust (CLT) model, separating land ownership from building ownership. The process for the Cosmopole project includes several steps:

1. The City of Lille owns the land.
2. An agreement between the OFSML and the City of Lille is made to develop OFS/BRS housing.
3. The City of Lille issues a call for tenders and sells the land to the selected developer.
4. The developer sells the land to the OFSML for €1 (equivalent to 15 OFS housing units) and signs an initial BRS with the OFSML, paying a monthly fee of €1/m².
5. The developer constructs and sells OFS/BRS housing while adhering to criteria set by the OFSML. Buyers must be approved by the OFSML.
6. Approved buyers sign a VEFA-type reservation with the developer and a User BRS with the OFSML.
7. The household becomes the building owner and land tenant (paying a monthly fee of €1/m²).
8. If the owner sells the housing, the selling price is regulated, and the new buyer must meet the same conditions: resource thresholds, principal residence, and appropriate housing size. 9. The BRS is then renewed for another 99 years.

The first OFS housing project in Lille enabled middle-class households to access housing in city centers and neighborhoods typically inhabited by affluent residents. The OFSML successfully reached its target audience through press articles and the municipal paper explaining the OFSML model. Additionally, the OFSML launched a website to expand its reach further.

The housing offered by the OFSML is very affordable, priced at €2,110 per square meter (including VAT) without parking. These prices align with the local definition of social homeownership, aimed at people with modest resources. In the first project, half of the buyers transitioned from social rental housing. The project's prime location near various urban services enhances its attractiveness and keeps the land affordable over time, combating land speculation.

Despite these successes, the OFSML faces challenges such as uncertainty regarding bank mobilization. It is exploring different legal systems to better align with its model and activities while seeking metropolitan-level opportunities.

The OFS model has garnered significant interest in France. In November 2018, the City of Lille hosted a two-day event for French OFS organizations and established the French OFS network "Foncier Solidaire France," supported by the French government. This network aims to facilitate member exchanges, address challenges, gather proposals, and forward recommendations at the national level.