What Is the Developer Financing Gap in Affordable Housing?

In France, affordable housing supply runs partly through private developers: 42 percent of the social homes first let in 2023 had been bought off-plan from them, and developers typically need part of a programme pre-sold before a bank will back its completion. When pre-sales and lending tighten, that channel tightens too, at a time when total housing starts in 2025 ran 21.3 percent below the average of the previous five years. Pre-construction capital from many smaller holders already exists in the form of real-estate crowdfunding, and its recent record of delays shows that the structure and the protections behind the capital matter more than its source.

The housing crisis is usually described from the demand side: too many households competing for too few homes. In France more than 2.9 million families were waiting for social housing in late 2025 (Union sociale pour l'habitat, November 2025). The supply side receives less attention, and it is the side where capital can actually change outcomes, because the question there is whether homes get built at all.

How short is new supply running?

New construction is running well below its own recent level. France started 274,611 homes in 2025, 21.3 percent fewer than the average of the previous five years, and the 369,723 homes authorised between September 2025 and August 2026 were 9.7 percent below the average of the five preceding years (SDES, January and September 2026). Across the EU, the European Commission reports that residential building permits are down 22 percent since 2021, and names "rising land and construction costs, tighter lending conditions" among the reasons investment in supply has fallen (European Commission, COM(2025) 1025, December 2025).

Why does affordable supply depend on developers?

Because a large share of new social housing in France is not built by social landlords themselves. It is bought off-plan from private developers under the VEFA regime, vente en l'état futur d'achèvement. According to Banque des Territoires, drawing on the national social housing register, 42 percent of the social homes first let in 2023 had been built in VEFA, up three points on 2022 (Banque des Territoires, Perspectives 2025). A survey of 163 social landlords by ANCOLS, the sector's oversight agency, found that the share of their operations carried out in VEFA rose from 43 percent in 2017 to 56 percent in 2021, and that VEFA delivered homes in about 37 months from investment-committee approval to handover against 49 months when the landlord managed construction itself (ANCOLS, annual report 2023).

The dependency runs both ways. When private buyers withdrew, public institutions stepped in as buyers of last resort. In March 2020 CDC Habitat announced an order of 40,000 new homes within twelve months, 15,000 social, 15,000 affordable and 10,000 intermediate, to be bought in VEFA "auprès de l'ensemble des promoteurs immobiliers", from developers across the market (CDC Habitat, March 2020). In spring 2023 a second support plan by CDC Habitat and Action Logement provided for the purchase of 47,000 new homes (Banque des Territoires, Perspectives 2025). A bulk institutional buyer gives a developer certainty; the terms of that certainty are negotiated with a single counterparty.

Why does a developer need pre-sales before it can build?

Because the financing of a VEFA programme rests on a guarantee that the building will be finished. For building permits applied for since 1 January 2015, a developer selling in VEFA must provide an external completion guarantee from a financial institution; the older intrinsic guarantee, based on the programme's own characteristics, was abolished (ordonnance n° 2013-890 of 3 October 2013; Assemblée nationale, ministerial answers published 18 February and 25 November 2014). The buyer, in turn, pays in stages capped by law.

The completion guarantee is where the pre-sale requirement comes from. A guide drawn up by the French developers' federation in Pays de la Loire with its partner banks cites a minimum of 30 percent of a housing programme pre-sold, and 50 percent for offices, as part of the security a bank needs before issuing the guarantee (FPI Pays de la Loire and partner banks, October 2021). Practice varies by bank and by operation, but the logic is consistent: the developer must demonstrate demand before the bank will stand behind completion, and a developer without the sales reach or balance sheet to secure early buyers waits, or does not build.

That is the developer financing gap in its precise form. It is not that capital for housing does not exist. It is that the capital which unlocks a programme, early commitments to buy, is concentrated in a few large buyers and in households who must commit years before delivery.

Is pre-construction capital from many smaller holders a new idea?

No, and its record is the most useful evidence available. French real-estate crowdfunding already channels money from many investors into development, mostly as loans to the developer's project company. Crowdfunding platforms raised EUR 1.46 billion in France in 2024, of which real estate accounted for 54 percent, down from 66 percent the year before (AMF, December 2025). Platforms in this market operate under the European crowdfunding regulation, applicable since November 2021, which caps fundraising at EUR 5 million per project owner over twelve months (Regulation (EU) 2020/1503).

The stress in that market since 2023 is documented:

In June 2025 the AMF warned that in crowdfunding "le paiement des intérêts puis le remboursement in fine du capital ne sont jamais garantis", and that investors are exposed to late payments and defaults if the project owner runs into difficulty (AMF, June 2025). The lesson is not that dispersed capital cannot finance construction. It is that capital lent to a development, usually behind the bank and without the protections a VEFA buyer has, carries development risk in a concentrated form.

Does lending to a developer differ from buying the future asset?

It does, and the difference lies in where the legal protections attach. A VEFA buyer pays in stages within legal caps and is covered by the developer's external completion guarantee. A crowdfunding lender to a development typically has neither protection: it is usually a subordinated creditor of the project company or of its sponsor, ranked behind the bank, although some deals add security such as a guarantee or a mortgage.

Pooling many smaller holders in a vehicle that buys homes in VEFA moves the capital to the buyer's side of that line, but the protections attach to the vehicle as the buyer, not to the holders directly. The holders take on the vehicle's own risks instead: how it is managed and governed, how its interests are valued, and whether they can be sold. The completion guarantee does not cover delays or a fall in value between purchase and delivery, the homes still have to be let or sold at the end, and the vehicle must be set up and run under the applicable financial regulation. Recording the interests on a shared register makes ownership, staged payments and milestones visible to every holder at the same time; it changes none of those risks. Neither route is safe. They place development risk differently, and an investor should know which one it is holding.

For a foundation or impact investor, the attraction of this stage of the cycle is additionality. Capital committed before construction, to a programme that cannot otherwise secure its pre-sales, can be the reason homes exist at all, which is a stronger claim than improving a building that would have been built anyway. It is also the hardest claim to prove, because the counterfactual is a project that never happened. A programme that makes it should document why the project could not be financed conventionally, and accept development risk as the price of that additionality rather than describing it away.

The bottom line

France's affordable housing pipeline runs partly through developers' pre-sales, and when those stalled, public buyers have had to step in to keep it moving. The gap is not a shortage of capital in general; it is a shortage of early, committed buyers for the programmes that need them most. Pre-construction capital from many holders can help close it, but the French crowdfunding record shows that the form matters: lending to a development and buying the future asset carry different protections, place risk in different hands and fail in different ways. The structure, not the source of the money, decides whether this kind of capital adds housing or adds defaults.

This article is part of DeReal Perspectives on real-estate access, liquidity, and tokenization. It is analysis of the market, not investment advice or an offer of any kind.

Sources

• SDES (French Ministry for Ecological Transition statistics), Construction de logements : résultats à fin décembre 2025 (Jan 2026): statistiques.developpement-durable.gouv.fr

• SDES, Construction de logements : résultats à fin août 2026 (Sep 2026): statistiques.developpement-durable.gouv.fr

• European Commission, European Affordable Housing Plan, COM(2025) 1025 (16 Dec 2025): data.consilium.europa.eu

• Union sociale pour l'habitat, press release (17 Nov 2025): union-habitat.org

• Banque des Territoires, Perspectives 2025 (2025): banquedesterritoires.fr

• ANCOLS, Rapport annuel d'activité 2023: vie-publique.fr

• CDC Habitat, press release (27 Mar 2020), hosted by the Fédération des promoteurs immobiliers: FPI file store

• Assemblée nationale, written question 33076, ministerial answer (Journal officiel, 18 Feb 2014): assemblee-nationale.fr

• Assemblée nationale, written question 56634, ministerial answer (Journal officiel, 25 Nov 2014): assemblee-nationale.fr

• Assemblée nationale, written question 24934, ministerial answer (Journal officiel, 9 Mar 2021): assemblee-nationale.fr

• FPI Pays de la Loire and partner banks, Bilan de promotion (Oct 2021): pays-de-la-loire.developpement-durable.gouv.fr

• AMF, Prestataires de services de financement participatif : chiffres clés 2024 (Dec 2025): amf-france.org

• AMF, Financement participatif : l'AMF appelle les investisseurs à la plus grande vigilance sur les risques (18 Jun 2025): amf-france.org

• Regulation (EU) 2020/1503 on European crowdfunding service providers for business: eur-lex.europa.eu

• Forvis Mazars, Baromètre du crowdfunding en France, Focus immobilier (Feb 2025): forvismazars.com