The steelworks in Dudelange closed their doors in 2005 when the last remaining ArcelorMittal rolling mill shut down. The 36-hectare wasteland will now be transformed into a new urban district.

Members of parliament on Thursday unanimously supported two separate funding bills, one to clean up the site and the second to pay for construction.

The first of 1,575 housing units are expected to be delivered by 2027, including subsidised and affordable housing. Over the next 15 years, Neischmelz should accommodate around 3,700 people.

Shops, restaurants and leisure facilities will also be part of the new Dudelange district that will incorporate refurbished industrial buildings, similar to concepts developed at the science campus in Belval.

Just over 21,500 people currently live in Dudelange, including around 40% foreigners from 111 different nationalities.

Land available, housing lacking

Despite the scale of the project, the investment also shows Luxembourg’s struggles to keep up with demand for housing. Statistics office Statec has previously said that between 5,500 to 7,500 new units are needed per year to accommodate the grand duchy’s growing population.

The International Monetary Fund this month said that “” is needed in Luxembourg’s housing market, warning that rising property prices, soaring construction costs, towering demand and restricted supply are threatening the grand duchy’s economy.

The government has pledged to reform property taxes to incentivise owners to build and not leave properties vacant. Close to 50 landowners own a quarter of Luxembourg’s empty housing plots, a report published in January said.

In total, there are 5,018 hectares of potential building land available, enough for 142,000 housing units.