Illustration photo shows a construction site in Belval
Photo: Matic Zorman/archives
As the pace of house price increases continues unabated in Luxembourg, a group of social workers is pushing for urgent action to make affordable rented housing a right.
Unlike the housing ministry, which they visited a day before we meet, social workers Aldina Ganeto and Jean-Michel Campanella are constantly confronted with the housing difficulties facing their clients. “It’s not only refugees, there are women with children who got divorced, have to sell the house and have to find something in the meantime,” Campanella says. “They can’t afford a new house on one salary so they go back and live with family.”
In one such instance, he describes a family of four adults and three children living in a two-bed flat. “It’s important to emphasise this because we have a high divorce rate in Luxembourg,” Campanella adds.
€1,616 per month
New rent prices have risen less steeply than purchase prices, at 2-6% annually from 2019-2020, but they remain high for new leases. In April 2020, average monthly rents for a flat in the capital came out at €1,616. Working on the principle of responsible finance, renters should only spend a third of their income on housing. “They need to be earning €4,000 a month, if you’re just one person. And imagine if you’ve two or three children and need more rooms,” says Ganeto. Indeed, a 2018 Liser report found that in the lowest earning bracket, 18,000 households spent more than 40% of their income on rented accommodation.
The growing urgency of the affordable housing crisis pushed them and colleagues to found Mieterschutz, a not-for-profit that was established earlier in 2020 to protect tenant rights. Their first major awareness-raising event will be a peaceful public demonstration in the Glacis on 10 October. “Sooner or later it will concern everyone,” Ganeto says, explaining that the problems don’t end with single parent families and are beginning to impact the middle classes in general. She cites the issue of where her children will live when they complete their studies. But also the impact on critical skills shortages, for instance in the health sector, that are not helped by eye-watering rents.
Based on their contacts with clients, they estimate that around 40,000 affordable homes are needed in Luxembourg to fill the gap.
Mieterschutz founding members Aldina Ganeto and Jean-Michel Campanella. Photo: Delano
Failure to act now will result in more workers moving over the borders to the greater region, exacerbating the issue. Luxembourg’s housing monitoring body the Observatoire de l’Habitat will soon begin monitoring this phenomenon, which concerns Luxembourgers and international workers alike. Workers’ search for better value for money in a home in the German Moselle, for example, often results in locals being outpriced and pushed further out.
What the law says
Under Luxembourg law, rents are capped at 5% of the capital invested in a property by the landlord. The problem in Luxembourg is that if the property is old, tenants are not able to access this kind of information. Few of them know the law, have the resources to pursue an issue in court and struggle even with languages, issues that the Mieterschutz team are helping with.
Most Luxembourg communes over a certain size have a commission for rents, funded by the housing ministry, to handle grievances between tenants and owners. The association wants a reform of these bodies, which Ganeto believes in some instances lack neutrality in disputes.
A housing reform that is underway would, in future, oblige landlords to be more transparent over investments. The same reform also calls for agency fees to be split 50-50 between tenant and landlord. “We still think that if the landlord is getting a service, they should pay 100% of the fee,” Ganeto says. This measure has prompted concern that landlords will simply raise the rent, but Campanella said a similar system was introduced in Germany where “they didn’t see prices go up as a result.”
The pair also suggest this might disincentivize landlords from using estate agents altogether. This, they say, could be positive as they suggest estate agents can add to the discrimination facing tenants. “The agent is looking for the best price and doesn’t want to take risks,” says Campanella. This can translate into excluding tenants of colour, people on a fixed term contract or people with more than one child. Ganeto said several family members of colour have felt obliged to visit properties with a white person to avoid being discriminated against. “I always use my husband’s name because if they saw my name, I wouldn’t get an appointment. That’s the reality!”
She described some clients who openly lied about the number of children they had in order to secure a rental contract.
Luxembourg is constructing affordable housing and the government last week announced that 3,600 homes were underway. “It’s helping but it’s not enough. It will take years,” Campanella says, adding: “In the meantime, we must find a lot of solutions.”