Luxembourg's Ministry of Housing has announced a series of initiatives to address the housing crisis, in particular the issue of affordable housing.
The ministry is looking at reforming the amended law of 25 February 1979 on housing assistance, with two new bills, one component of which is that the government will provide grants of €10,000 to homeowners to convert their home into two separate housing units with separate entrances.
The €10k conversion grants will be available without being means-tested; conditions include being the owner of the accommodation and not owning another home. In addition, applicants must receive a building permit from the municipal administration, each of the two housing units must have its own entrance door (either from the outside or from a collective space) and the owner / applicant must live in one of the two units after the end of the work.
The first of the two bills will establish a clear, transparent and fair framework for the financing of affordable housing and the support of its inhabitants. The second bill provides for the expansion and simplification of individual support for housing, rental and private market ownership.
A. Affordable housing: towards a supply of sustainably affordable housing
The objective of the reform is to boost the creation of affordable housing in public hands in order to give a perspective to the growing number of households who have difficulty finding decent housing. “Luxembourg needs a housing stock that remains affordable in the long term. This is how we will ensure the right to housing and thereby social cohesion!" underlined Henri Kox, Minister of Housing.
Key elements of the affordable housing bill:
• Modernisation of the “stone aid” financial participation system
• Introduction of the concepts of social landlord and affordable lease
• Establishment of a national register of affordable housing "RENLA"
B. Individual housing assistance: a simpler and more generous assistance system
The objective of this bill is to better help vulnerable populations who remain particularly affected by soaring prices. "By reforming the system of individual housing aid as a whole, our primary objective is not only to simplify the aid system, but to make them at the same time more generous and fair", summarised the Minister of Housing.
Key elements of the bill on individual housing assistance:
• Revision of eligibility criteria and grant conditions to benefit a greater number
• Increase in amounts and ceilings to reduce the effort rate
• Administrative simplification and digitisation of the system as a whole
• Only future buyers of housing on the private market are eligible for individual aid, knowing that buyers of affordable housing benefit from indirect financial support within the framework of stone aid.
“With these two affordable housing and individual assistance bills, the government is delivering on the promise made in the coalition agreement. Namely: fundamentally reform the legislation on housing assistance. Together with the Housing Pact 2.0, the creation of the Special Housing Fund, the adoption of laws to finance large-scale national projects (Elmen, Wunne mat der Wooltz, NeiSchmelz, etc.), the launched public affordable housing offensive is thus complete" noted the Minister of Housing. Furthermore, Minister Kox underlined that with the forthcoming reform of the rental agreement and the planned introduction of a tax on the mobilisation of unbuilt land, another important step in the paradigm shift has thus been initiated. "This targeted policy is a strong commitment to the right to housing, in order to guarantee a dignified, sustainable and quality" living together "for all" noted the Minister.
