Laurent Gobillon*, Anne Lambert and Sandra Pellet

No-interest loans (NILs) were introduced in 1995 in France to promote access to home ownership for first-time home buyers and to stimulate construction. To be eligible for these loans, households must meet income conditions that depend on family structure and location. Nevertheless, NIL is not well targeted since many households are eligible. It has also been criticised because of unintended consequences: it has encouraged the construction of low-cost housing estates in distant suburbs of large cities where real estate prices are lower. These neighbourhoods intended for low- and medium-income households are located far from employment sites, public transport, schools, and childcare services. We can then wonder whether access to home ownership, often considered a symbol of social success, is not gained at the cost of significant sacrifices for the lower socio-occupational classes.

In their article, Laurent Gobillon, Anne Lambert, and Sandra Pellet focus on the effects of NIL on access to home ownership and location of blue-collar workers and employees over the 1992-2006 period. They rely on an interdisciplinary approach that combines quantitative study using INSEE Housing Surveys and SGFGAS loans data, with interviews conducted in a suburb in the outskirts of Lyon, where a sizable proportion of the population has become homeowners thanks to NIL. The quantitative analysis shows that, in a context of growing housing prices, NILs have limited the exclusion of the lower-class groups from the new housing market, especially outside the Paris region. Still, households that benefited from NIL, especially blue-collar workers, tend to move to outer suburbs that are characterised not only by a lower proportion of white-collar employees than the city centres, but also by a lower access to employment and amenities.

The interviews show that lower-class households that gained access to home ownership thanks to NILs were often trying to leave social housing estates located in Lyon suburbs. Most of them first tried to find a dwelling in a better neighbourhood still located near the city centre, before considering moving to the outskirts. Before relocating, they had no clear perception of the social and geographic isolation that they would face in their new neighbourhoods. Interviewed households stress the need for new infrastructures and facilities in those areas. Childcare has become more expensive for families since female partners, who often work atypical working hours, were previously helped by family members or friends located close by. Around one third of women were thus forced to quit their jobs or stop working altogether to perform household chores. Usually, interviewed households have a negative opinion of their new housing estate that they compare to “flat public housing” due to the low density of construction and the horizontal succession of small poor-quality houses. One might wonder whether access to home ownership with a subsidized loan has really had a positive effect on the well-being of interviewed low-income households.

Original title : The suburbanization of poverty: Homeownership policies and spatial inequalities in France
Published in : Working paper, 2019. hal-02164985
Available at : []

* PSE Researcher

Visual credits : Shutterstock – Artem Oleshko