The amendments to the draft law 7642--presented by housing minister Henri Kox (déi Gréng) on 6 October could lead to higher rent in some cases, states the Mieterschutz in a statement released in the evening of 17 October.
The bill foresees a series of changes, like an equal participation of tenants and landlords to agency fees, a lower deposit, and a lower maximum rent. The aim, according to the ministry, is to create a fairer rental market in the grand duchy, where affordable housing is scarce.
The proposed maximum rent would reach 3% to 3.5% of the revaluated capital invested, down from 5%. While this may seem advantageous, it only would be the case for new builds, while older, less energy-efficient housing could end up costing far more in rent. “According to our calculations, we have found legal limits 2 to 3 times higher than those currently in force,” says the Mieterschutz.
“The Ministry of Housing needs to review the system proposed in its reform,” the union demands.
Luxembourg has seen rents grow by 17% over a ten year period. 18,000 low-income households pay over 40% of their income towards rent.
The Mieterschutz union had already criticised the previous draft presented in 2020. Some of its demands had been heard--like the mention of the invested capital on the leasing contract, or the reevaluation of the 5% maximum threshold.
For the housing ministry, the arguments and calculations used by the Mieterschutz are misleading. “A house that cost 170,000 euros converted in 1980 can be compared to a house that would cost around 2.6 million today. We are talking about an exceptional home, for example a penthouse in the best location or a large one-family house with a big yard. For such an object, the calculated rent is completely in line with the market,” a spokesperson for the ministry told Delano.
“Today we already have a legal ceiling for the rent, but it is much higher. Therefore, the ministry does not assume that with this realistic ceiling the rents would rise. On the contrary, the improved transparency of the rental agreements leads to the fact that the tenants know better than today to accuse the rent commission of the respect of the ceiling.”
Article edited on 18/10/2022 at 12pm to include a comment by the housing ministry.