Henri Kox, Minister of Housing; Credit: MLog

On Thursday 20 May 2020, Luxembourg's Minister for Housing, Henri Kox, presented the first report of the Special Housing Development Support Fund: in 2020, the government contributed with almost €100 million to the construction of affordable housing in Luxembourg; this effort will predictably be doubled over the next 5 years to ensure the creation of more than 4,000 affordable housing units by 2025.

The key figures of the Special Fund report give an overview of the number of subsidised housing projects underway or in planning, as well as the amounts committed and the budgets in perspective.

1. More transparency and predictability

Since 1 April 2020, the Special Housing Development Support Fund has been operational and allows greater transparency of public investments in the development of affordable housing in Luxembourg. From now on, the Chamber of Deputies and the public can know the details of the public investments spent through the Stone Aid granted to affordable housing projects carried out by public and private promoters with a social vocation.

The Special Fund's annual report also presents the development of the various projects, including in particular large-scale projects such as Elmen in Kehlen, Wunne mat der Wooltz in Wiltz and Neischmelz in Dudelange, projects which are carried out by the major public promoters SNHBM and the Housing Fund. Finally, putting medium-scale projects in perspective makes it possible to draw up a forecast table of the future development of the stock of rental housing and long-term rental in public hands.

2. The affordable and sustainable housing offensive

As of 31 December 2020, the Fund's inventory included 300 projects, representing more than 3,125 housing units under construction, for a total financial volume of €514 million. In 2020, the Fund spent €96 million. In view of the many large-scale projects that will be initiated in the months and years to come, the activity of the Special Fund will increase significantly Indeed, the amount of the annual expenditure of the Fund should double within 4 to 5 years. In addition, it is estimated that until 2025 new agreements with developers will be signed for 8,200 additional housing units.

In order to guarantee efficient and responsible management of the amounts committed, the Ministry of Housing has introduced two new instruments. The specifications for the creation of subsidised housing introduce recommendations in terms of urbanisation, architecture and economy, as well as ceilings of subsidised costs. These specifications can be viewed on www.logement.lu. In addition, a Critical Analysis Commission for Stone Aid (CAAP) has been set up at the ministry level to better advise developers to comply with the specifications. This Commission also evaluates housing projects submitted to a request for state participation and advises the Minister in this regard. 

3. The right to housing, a national mission

53% of homes built in 2020 were for rental, compared to 47% for sale. The government has made it a priority to significantly increase the supply of affordable public rental housing in the coming years.

Currently, nearly 70% of affordable housing in the Special Fund's inventory is provided by the two public developers, SNHBM and the Housing Fund. The 300 projects currently underway are located in 59 municipalities.

In order to boost the offer and mobilise municipalities that have not yet developed this type of housing in their territory, two new tools will be added to the Special Fund in the future and will bring about a notable change. With the Housing Pact 2.0, municipalities will be better advised and assisted in the creation of affordable housing. And with the new article 29bis of the law on municipal development, for each particular development plan, in each municipality, between 10% and 30% of the building surfaces intended for housing will be transferred to the public with a view to it. build additional housing.

The Special Fund is the financial instrument that will accompany the necessary systemic change, and already initiated, towards the realization of the right to housing for all. This change is imperative to give perspective to the growing number of households seeking affordable housing. It is the guarantor of the social cohesion of the country", underlined the Minister of Housing Henri Kox, during the press conference.