This client alert provides a critical analysis of the recodification of the French Town Planning Rules, in particular regarding the changes to the content of local planning schemes (PLU). This reform impacts all those who operate in the French real estate market, especially investors and developers.

This client alert is an adapted version of a client alert prepared in French.

The French real estate sector is once again confronted with a reform of development rules.

After relentless alterations over many years, the French Town Planning Code had become unwieldy and difficult to read. Following an Act of 23 September 2015, which re-codified the French Town Planning Code (primary legislation), the Code’s statutory rules (secondary legislation) have been re-organised by a decree of 28 December 2015.

For the most part, the Code has simply been rewritten without altering the law. However, this redrafting gave lawmakers the opportunity to modernise local planning schemes.

This reform, wished for by developers in favour of a more ‘project-based approach’ to urban planning, raises several issues. While the refreshed town planning schemes promise new and exciting possibilities for development projects, the reforms also risk opening the gate for new types of development appeals. It will be essential for project developers and investors to stay ahead of the curve and anticipate local government’s strategic vision, as they will now need to articulate and justify their projects by reference to new ‘development objectives’ instead of traditional urban planning rules.

Representatives from the public and private sector discussed these issues at a conference held on 8 March 2016 in Paris, attended by Emanuelle Cosse, minister for housing and sustainable communities.

I. Changes to the ways town planning rules apply under the schemes

The ‘rules’ of a planning scheme are the normative part of a local town planning document. Unlike the general planning context and orientations set out in the scheme’s preliminary chapters, the rules contain the specific regulations and restrictions on land use which govern the grant of planning and building permits. They set out, for example, rules about built-form density and setbacks for each zone (urban, agricultural, etc.)

There are multiple stakes in reforming the content of local planning schemes. Local government now has a new box of planning tools which it can use to adjust local schemes, in accordance with its strategic vision and at a lesser cost. As for land developers and permit applicants, they will benefit from a simplified and more flexible system to present their projects to the authorities.

The principal innovations of the reform are as follows:

• It is now possible for local government to simply outline ‘development objectives’ in urban and future-urban zones, instead of specific town planning regulations. Similarly, areas covered by an inter-city planning scheme can now simply be governed under the National Planning Rules (RNU), set out in the Code, as opposed to local rules. Given their strong environmental and political context, natural and agricultural zones must still be governed by a set of specific local regulations.
• The rules themselves can now be expressed qualitatively, in the form of a goal to be reached. This means that the rules can take the form of simple objectives (“A building’s height must be consistent with its surroundings.”), instead of fixed, empirical rules (“A building may not be more than 18 metres tall.”).
• It is now merely optional for local government to set building height and footprint rules. Instead, permit applicants will need to meet a key objective: integration into the built and natural landscape.
• The drafting of the rules has also been clarified. For example, it is now expressly provided that rules can be graphic and written. If a rule is expressed only graphically (i.e. by way of illustrations or charts), its normative force needs to be specifically mentioned in the scheme. Permit applicants will need to read the new format rules very carefully, to ensure that they have fully taken account of all applicable norms (written and graphic), with the hope that any images are sufficiently clear, so as to avoid confusion about the interpretation of the applicable rule.
• Finally, the decree provides for the creation of a national town planning dictionary by ministerial order (not yet published), to harmonise the vocabulary used by local governments in their planning documents. Industry actors will no doubt be very pleased with this initiative, because imprecise legal language is regularly a source of hesitation by town planning departments in the interpretation of their own planning rules, which leads to third-party appeals.

II. A reworking of building classifications

In France, a town planning scheme may define, in accordance with local priorities, rules concerning the classification and permitted uses of constructions. These are a means for local government to control the mix of economic and social activities practised in any given area, by limiting a building’s use. The need to change a permitted use can often be a hurdle for developers, especially major urban centres where building use is tightly controlled.

The decree reduces the number of building classifications from nine to five, now being: (1) agricultural or forest uses, (2) residential, (3) commercial and service activities, (4) public infrastructure and (5) public services. These five building classifications are then divided into 20 new sub-classifications. For example, “commercial and service activities” is sub-divided into crafts and retail, restaurant, wholesale trade, service activities receiving clients, hotel and tourist accommodation and cinema. An administrative order, not yet published, will further define each of these sub-classifications.

In order to promote a more diverse urban landscape, it will now be possible for project proponents to combine more than one permitted use inside the same construction or lot. These provisions will allow the emergence of ‘hybrid’ construction projects linking residential, commercial uses and entertainment, which are an increasing trend, particularly in the new ‘Greater Paris’ super-region.

III. Entry into force

This reform automatically applies to new town planning schemes drafted after 1 January 2016. However, for new schemes which are already in preparation or under general review, the town council can vote to apply the new reform to the existing rules.

For ‘minor revisions’ to existing, old-form schemes (as defined under article L. 153-34 of the Town Planning Code), these remain essentially governed by the old rules, with some exceptions.

The reform also applies to inter-city planning schemes (which cover multiple local government areas), of which approximately 500 are currently under preparation. It is worth remembering here, that under the ‘ALUR’ Act of 24 March 2014 (Article 136), inter-city councils will assume responsibility for all town planning matters from March 2017. This latest reform is therefore, in part, a step towards the generalisation of inter-city town planning, with schemes covering much larger and more diverse geographical areas.

IV. Conclusions

The practical impact of the ‘softening’ of town planning schemes will depend on the willingness of local government to put these new tools into use.

If a reduction in hard and fast planning rules suggests a potential increase in the number of third-party appeals, these innovations also need to be set off against other recent legal reforms. For example, the tightening of standing rules for local associations and the additional case-management powers given to administrative law judges are intended to limit appeals and shorten the lead time on judgements.

Some local governments will undoubtedly insist on retaining strict development rules, in order to preserve the identity and coherence of their urban landscape. They will be reluctant to modify their schemes to make them less precise. On the other hand, some town councils, who are still operating under older and less detailed planning documents, will now be able to update their scheme more easily.

For permit applicants and developers, the increasing complexity of town planning rules, very often nuanced by case law, can be a source of hesitation and legal insecurity. A specialised town planning and environment lawyer can bring substantial added value to a project, both by assisting with interpreting the town planning scheme and during the difficult negotiations with the multitude of local administrations and government departments involved in a development approval, ahead of a permit filing.

Our experience. Reed Smith’s French real estate department, based in Paris, provides legal assistance to clients in the European real estate market at all stages of their development projects, from conception to construction, including obtaining governmental approvals and successfully defending public and private law development appeals. We regularly assist with complex development and construction operations, alongside investors, developer/contractors and third-party objectors.

Client Alert 2016-113