PARIS: The French government and state-owned lender Caisse des Depots are to provide 1.9 billion euros to finance the construction of 25,000 new homes, President Francois Hollande said on Monday.
Hollande's Socialist government is eager to revive homebuilding in the face of a slump that has choked broader growth in the euro zone's second biggest economy.
Using proceeds from the sale of stakes it owns in some companies, the state fund will make one billion euros ($1.29 billion) available for new home building over a five-year period, Hollande said at an investment conference. CDC will provide a further 900 million euros.
The measure aims to subsidise privately owned housing developments where owners offer below-market rents in exchange for a tax break. The priority will be building in cities where adequate housing is particularly scarce.
Last month the government offered tax breaks to property owners to spur construction, which has woefully lagged an Hollande campaign promise to build 500,000 new homes a year.
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