Luxembourg is suffering from an acute housing shortage, causing housing prices to spiral
Measures to increase the amount of social housing in Luxembourg are failing, a report by the court of auditors has found.
On Monday, the budget implementation control committee studied a special report on social housing construction from 2008-2017.
Among its findings, the report pointed out that there was no clear definition for “social housing”, nor was there a distinction between housing intended for sale, rent and student accommodation. It called for better budgetary monitoring for each type of housing in future.
Apartments for €8,856/sqm
Luxembourg is suffering from an acute housing shortage, causing housing prices to spiral. A recent JLL report found that in 2018 people paid on average €8,856 per square metre for an apartment in Luxembourg City, and €5,976 across the country.
To meet demand from the growing population, the country needs to construct on average 6,000 homes per year. JLL figures suggest it constructed on average 2,600 per year since 2000.
One solution has been to offer aid for the construction of housing projects. But the court of auditors report found this had fallen short of its mark. From 2008 to 2016, it noted of 3,000 housing units receiving aid, only 900 were social rental units. The report called for adjustments to the construction programme. Another mechanism which was expected to ease social housing demand was the use of pre-emptive land purchasing rights. But the report found that these rights were massively underused in Luxembourg.
The findings come a week after Luxembourg housing minister Sam Tanson announced the government’s two key priorities in the area of affordable housing: overhauling housing subsidies and a new housing pact 2.0 for State and communes.
According to the chamber of deputies, the law on housing assistance and the subsidy system will be overhauled to define more clearly the concepts of “social housing” and “low-cost housing”. The minister wants to create a one-stop shop for applicants for social housing and a system that ensures that agency fees are no longer charged unilaterally to tenants. The minister also wants to create a legal framework for joint construction projects, for housing cooperatives and shared apartments.
The new Housing Pact 2.0, meanwhile, aims to strengthen and support communes in the fight against housing shortages. Tanson hopes to create a dedicated cell to support communes in this area within the housing ministry.