The Luxembourg government’s Fonds de Compensation (Compensation Fund) has launched a new initiative designed to plug the price gap between social housing and the open rental market.
The new plan is to work with other government agencies, principally the SNHBM (Société Nationale des Habitations à Bon Marché) but also with private investors, to build new housing which will target those people whose income is too high to qualify for social housing, but nevertheless is insufficient to be able to afford market house rental prices. As such the prices will typically be about 30%-40% below market rates. Private investors will be given a relatively low, but guaranteed, return on their investment.
The scheme goes beyond simply providing the accommodation, as it contains a social element, and its stated mission is to
• Make housing available at a reasonable rent
• Provide social assistance to the beneficiaries
• Perform day to day maintenance of the properties
• Perform the administrative and technical management of the properties
• Guarantee the payment of the rent and a modest return on their investment to the private investors
It is hoped that the first example of this new initiative will take place in Grevenmacher with the building of a new block of apartments, Kräizbierg, at the bottom of Kahlenberg, the hill that leads to Grevenmacher from the motorway. The estimates are that the private investment required would be about €8.5 million, and that the guaranteed net annual return to the investor would be about 2.5%.
The project anticipates a total of 23 two and three bedroomed apartments, and 35 underground parking spaces. There will be a fully equipped disabled apartment on the ground floor.
