The project foresees renting out flats at €10 per m2, which would be 30% to 40% below market price.

On Friday 29 September, the government presented the project, an apartment block of 23 units. It is to be built in Grevenmacher, and would entail an initial investment of €8.5 million.

The aim is to involve the Compensation Fund (Fonds de compensation, part of the public pension system) to a higher degree in developing state-owned housing at low cost.

Minister of housing Marc Hansen and minister for social security Romain Schneider said they were in the process of developing a “new model”. The fonds de compensation would buy land or buildings to then rent them out to the social real estate agency (Agence immobilière sociale) for 20 years.

The AIS will guarantee rent payment to the Fonds de compensation and a return of 2.5%. The collaboration between ministry, Fonds du logement (Housing Fund) and Fonds de compensation was hailed as a change of paradigm by the housing minister.

The Fonds de compensation currently manages real estate worth around €410 million. If the Grevenmacher project goes well, the ministry may decide to launch 12 more similar projects.