As head of the Foundation for Access to Housing and AIS director, Hempel does not mince his words when asked about homes left unoccupied in Luxembourg. “In the current situation, it’s a crime to leave a home or plot of land unoccupied just to make money,” he argues.
The housing shortage has afflicted Luxembourg for many years. Although there are no official figures for the number of empty homes, experts in the sector estimate that there are between 10,000 and 20,000 in Luxembourg’s housing stock.
“It’s unfair, housing is meant to be used, ... the state must punish these people”, says Hempel as the government prepares to introduce a tax on unoccupied homes. However, he draws a distinction between people “acting in good and those acting in bad faith”.
Hempel went on to criticise landlords who do not rent out their properties purely on speculation. “It’s just a financial product for them ... in most cases they don’t even install a bathroom”, according to the AIS director.
But, it is not just speculators who leave homes empty.
There are those who inherit a property but prefer avoiding the responsibilities that come along with renting it out. There are also those who keep a property while waiting for their children to return from university. But, more commonly, it is the elderly who leave properties in Luxembourg empty.
The AIS director explains that they are sometimes reluctant to enter the rental market. These are, in fact, the cases favoured for social rental management, a concept recently generalised by the Luxembourg government, but already launched more than a decade ago through the AIS.
Hempel says that it is generally relatively straightforward to reach an agreement with retirees who are leaving a home behind. “We sign a lease with the landlord and then take care of everything ... if there’s a problem to be sorted out, our phone rings. The owner is not disturbed,” he explains.
An “ideal” arrangement for those looking to supplement their income, according to Hempel. “It allows [retired people] to have a bit of money for little things like hairdressing,” he says, pointing out that elderly people often spend a large part of their retirement in retirement homes.
For others, it is an opportunity to rent out their homes and avoid any complications. In fact, the AIS has a technical team responsible for maintaining the flats or houses made available to them.
“Landlords no longer have any excuses,” stresses Hempel and points out that using the social rental management service is also “a good thing” in terms of social inclusion. However, he is aware that this is not a solution for everyone.
“People who are waiting for their property to appreciate in value won’t come to us”, he admits. The 75% tax exemption on social rents does, however, “compensate a little for what you lose compared with the traditional market”.
“We’re really about social inclusion,” he says. The AIS does more than just manage properties, it also works with social actors to establish a project for the affected tenant.
Hempel believes that housing should not be seen “as a financial product”. He stresses that housing is “a fundamental right”. In this context, he welcomed the Luxembourg government’s efforts to introduce a law on affordable housing.
However, he criticises the late announcement of a reform of the property tax and considers the planned penalties to be “negligible” compared with the gains usually made on building land. As for the taxation of empty homes, he believes that it is not high enough, saying that the reform of the tenancy agreement will not change much either.
“Rental prices will always be linked to the purchase price ..., so the tenant should have been at the centre of the reform, not the landlord”, concluded Hempel.
