The escalating costs associated with land and construction were at the centre of discussions at a recent meeting of the Parliamentary Housing Committee.

During the session, Minister of Housing Claude Meisch provided insights to MPs regarding the government's initiative to purchase housing projects from the private market. The primary consideration in these acquisitions is naturally the price, with Minister Meisch asserting the government's commitment to refrain from "helping those who speculate and fail."

To this end, the government has established maximum prices for purchasing residential projects from private individuals. These caps are set at €5,800 per square metre for construction and €1,800 per square metre for land (i.e. for net living space). The municipality of Luxembourg City has also engaged in similar acquisitions. As far as construction is concerned, the capital's local authorities aligned their pricing strategy with the state's parameters, i.e., €5.800 maximum. For plots of land, however, the municipality of Luxembourg City has set a maximum of €4,000. The committee acknowledged the varying value of land across regions and the particularly high prices in the capital.

Minister Meisch affirmed the importance of assessing land values on a case-by-case basis — emphasising the necessity of prudent decision-making in negotiations with private property developers. This statement came in response to a query regarding the role of the Registration Duties, Estates and VAT Authority in setting prices for these acquisitions. While acknowledging the need for flexibility in assessing land values, Minister Meisch underscored the importance of setting reasonable limits to ensure fiscal responsibility.

Within the meeting, MP Paulette Lenert of the Luxembourg Socialist Workers' Party (LSAP) advocated for greater flexibility in the state's approach to the cahier des charges, which outlines construction criteria (the size of flats or parking spaces, for example) for affordable housing. Lenert later expressed satisfaction that her proposal had received positive consideration.

Meanwhile, MP François Bausch of the Green Party (déi Gréng) expressed optimism that the crisis in the construction industry is slowly but surely coming to an end. Bausch suggested that the state should prioritise its own construction projects on government-owned land rather than exclusively relying on purchasing private developments. Minister Meisch responded by suggesting that the number of enquiries would go down naturally, as soon as the market was "booming again." However, Bausch expressed concerns that prices will skyrocket as soon as the market "booms" again, reiterating his argument for increased state intervention.

Senior civil servant Diane Dupont presented a report on the state's acquisition of VEFA properties (vente en l'état futur d'achèvement or "sale in future state of completion"). Dupont outlined progress on 11 projects, totalling approximately €218 million. Notably, one project in Differdange involving 61 flats has been finalised for €33 million, while four upcoming projects, in preparation or finalisation, comprise 125 flats for €55 million.

Discussions are ongoing for six additional projects, totalling 186 flats for €114 million. Due to confidentiality agreements, further details could be disclosed at this time. However, MPs, in particular Marc Goergen of the Pirate Party, have pressed for increased transparency and additional information regarding the projects in question.