Developing the co-housing market, removing barriers to renovate houses into flats and offering fiscal benefits to people who rent out spare rooms in their homes were among the recommendations outlined in a seminar held by the Idea Foundation on Wednesday.

“If there was one single solution [to the housing shortage], we would have found it. There are certainly a number of solutions to consider,” said Marc Wagener, Idea Foundation’s director.

The think tank’s recommendations tackled the issues of under occupation, empty homes and co-housing.

According to Idea Foundation, six out of ten people in Luxembourg live in under-occupied homes, i.e., they have more rooms than they require. To exploit this potential for housing, the foundation called for the government to maintain benefits when a person rents out a spare room in their main place of residence.

They also recommended the introduction of tax benefits on rents for people who rent out their spare rooms in this way, like the Rent a Room scheme in the UK. The latter is an optional scheme for owner occupiers or tenants who let out furnished accommodation to a lodger in their main home, enabling them to earn up to £7,500 per year, tax-free or £3,750 if letting jointly.

Luxembourg ranked in the bottom 10 countries in the housing affordability survey released last year by InterNations, an expat social networking group

Regarding empty homes, current estimates place the number of potential homes not being used at around 10,000. Communes may impose a tax on empty properties, but few exercise this right.

In this area, the organisation recommended that communes look more favourably on planning applications to convert offices to homes and transform houses into flats.

Finally, the phenomenon of house-sharing, which is common among young employees in the capital, should be further developed, the think tank suggested.

It recommended the creation of a co-housing portal and a labelling system to develop it further. In addition, it also companies to develop their own co-housing schemes for interns and young workers.

Data shared by the foundation showed that during the last ten years, the population grew by 20%, the number of people working in Luxembourg jumped 30% while the cost of housing rose 40%. The supply of housing, particularly affordable housing, cannot keep pace with the growing population, the foundation explained.

It had been estimated that Luxembourg would need on average 6,500 new homes per year from 2010 to 2030 to meet projected demand. Idea, however, puts the need closer to 9,500.

“The shortage of housing is a national problem which is damaging the attractivity of the country,” the outfit’s Sarah Mellouet said. She outlined the impact this shortage is already having on the working population by explaining that four out of ten working young people still live with their parents.

Meanwhile, Wagener added that it is pushing residents over the border to find cheaper housing. Currently, 16,000 former Luxembourg residents who work in the Grand Duchy are believed to have made this move. “It’s a huge trend and something to keep in mind,” he said.