During the meeting of the parliamentary committee on housing and spatial planning on Thursday 12 September 12024, Luxembourg's Minister of Housing and Spatial Planning, Claude Meisch, presented the report of the Special Fund for Affordable Housing for 2023.
The fourth edition of this report highlights the public investment policy pursued by the Ministry of Housing and Spatial Planning in favour of affordable housing.
In 2023, expenditure by the Special Fund for Affordable Housing increased by 7%. As of 31 December 2023, the inventory of the Special Fund included a total of 270 projects representing 3,786 housing units or 728 additional housing units that were approved in 2023. Nearly 70% of these projects were carried out by public developers SNHBM and the Housing Fund.
The report indicates financial commitments of €541 million as of 31 December 2023, up from €310 million in 2022. More than €183 million were paid out for the creation and acquisition of housing, of which 60% are intended for affordable rental and 40% for affordable sale. Throughout 2023, the ministry signed agreements granting financial contributions for €408.2 million.
The ministry also reported that the Special Fund enabled the Luxembourg state to acquire more than 2,000 ares of land in 2023, with an estimated potential for creating 550 affordable housing units.
The ministry noted that the real estate market was strongly affected by economic factors in 2023. In response in part to this crisis, the state set up a programme for the acquisition of VEFA (sale in future state of completion) projects, in order to contribute to the production of affordable housing while supporting the construction sector.
Throughout 2023, the state pledged €95 million to the acquisition of VEFA projects, of which nearly €8 million have already been paid in 2023. As of 31 December 2023, the state committed to four projects totalling 160 new affordable housing units.
Moreover, the ministry recalled that the municipalities play a special role within the Housing Pact 2.0, the budget management of which is part of the Special Fund. More than €23 million have been allocated to the municipalities that have signed an implementation agreement before 31 December 2023.
The ministry added that several large-scale projects, contributing to affordable housing, are currently being planned or have already been launched. Among these, projects whose work started in 2023 include: "Haargarten" in Wiltz, with 250 housing units planned and an estimated budget of €40-€50 million; "Itzegerknupp" in Luxembourg-Bonnevoie, a project of 484 housing units with an estimated state participation of €180-€220 million; "JFK Sud" in Luxembourg-Kirchberg, comprising 175 housing units with an estimated budget of €35-€50 million.
The Housing Ministry described the Special Fund for Affordable Housing as an "essential lever" in the creation of affordable housing in Luxembourg. "To increase supply and meet housing challenges, it is essential to involve and cooperate with all housing stakeholders: the public, social and private sectors. In this context, the Special Fund constitutes an essential instrument of the housing policy pursued by the government," stressed Minister Meisch.
