RTL Today - Housing action plan: Will landowners soon have their backs against the wall?

Significant changes are on the horizon for Luxembourg's housing market. Prime Minister Luc Frieden unveiled a comprehensive action plan on Tuesday aimed at revitalising housebuilding efforts.

Addressing the Chamber of Deputies, Prime Minister Frieden reiterated that the new government has made housing a priority. Less than two months ago, the government introduced several measures to stimulate housebuilding, and now it plans to go even further with a "10-point action plan."

Frieden described the initiative as a "paradigm shift" in housing procedures, with an administrative simplification project already in motion. The action plan includes principles such as "silence means agreement" and "ministerial consolidation," indicating substantial changes ahead.

Implications for landowners

Luc Frieden pictured during his State of the Nation address on 11 June 2024. / © SIP/ Emmanuel Claude

The objective is clear: to expedite and increase construction. One key measure involves ministerial consolidation, which would allow the government to override landowners who obstruct building projects. Frieden explained that the Minister for Home Affairs could reassign such land to ensure projects proceed without delay.

The proposed legislative changes are expected to accelerate construction timelines significantly. Prime Minister Frieden announced that the bill would be presented to the Chamber of Deputies "before summer," i.e., before 21 June.

Prime Minister Luc Frieden also confirmed plans to introduce a mobilisation tax for building land, with the necessary amendments expected to be tabled before the end of the year. In other words, things are likely to move very quickly, especially if MPs follow suit.

Additional changes include the "partial" application of the "silence means agreement" principle, the merger of the General Development Plan (PAG) and Special Development Plan (PAP) procedures, the introduction of a single digital platform for building permission procedures, and an increase in the threshold for mandatory environmental impact studies from 2 to 4 hectares.

Environmental procedures taking a backseat

This last measure sends out a very clear signal. Especially when considering that it is accompanied by other simplifications in terms of environmental procedures. In particular, Frieden has announced greater flexibility in managing construction debris. He remained vague, simply stating that "this will avoid lorries having to travel the length and breadth of the country."

The introduction of the "Timed Nature" principle in urban areas is expected before summer. This allows landowners to let hedges and shrubs grow without jeopardising the feasibility or cost of their projects. Such urban habitats will no longer require compensation, Frieden explained.

In exchange, 10% of each new residential zone must be reserved for green spaces. However, the specifics of what constitutes a green space were not clearly defined by the Prime Minister.

Frieden also announced the intention to introduce standard national building regulations starting in 2025. This standardisation is expected to accelerate construction activities in Luxembourg over the coming months and years.

The long-term impact of this action plan on existing environmental regulations remains unclear. However, it is evident that the dynamics of Luxembourg's housing market are poised for significant change.