A package of housing reforms, including measures to increase affordable housing, simplify permit approvals, and encourage sustainable development, has been unveiled by the Luxembourg government to address the country’s housing shortage.
Minister of Housing Claude Meisch has announced the expansion of the sectorial housing plan to allocate new housing spaces, as part of a broader effort to address Luxembourg’s housing shortage.
During a press conference, Meisch, alongside Minister for Home Affairs Léon Gloden and Minister of the Environment Serge Wilmes, detailed a series of measures aimed at speeding up the construction of new homes.
One key change will allow the construction of housing in activity zones under certain conditions. Minister Gloden drew a comparison to the worker flats once common in the steel industry, although he humorously assured that "no penthouses" would be built in these areas.
Boosting affordable housing
Gloden also highlighted reforms to Article 29bis of the Housing Pact, which will increase the percentage of affordable housing units required in new projects. Under the revised rules, affordable homes will be included as additional units rather than part of the overall project count. This change ensures that developers cannot pass on the costs of affordable housing to the other units. This reform is expected to create an additional 9,300 homes, including 3,600 affordable units, while encouraging denser construction.
Although municipalities will retain control over the number of homes built, Gloden expressed confidence that local authorities have received the message to build more and faster. He assured that the state would provide support to help municipalities achieve these goals.
Environmental benefits of denser construction
Minister Wilmes welcomed the changes, emphasising that denser construction would free up more space for the environment. He also announced a reduction in parking space requirements, with affordable homes now needing only one parking space.
Wilmes further highlighted measures to facilitate the installation of solar panels and wind turbines in activity zones. Additionally, he proposed amendments to harmonise deadlines for various environmental procedures.
Administrative simplification: "Silence means agreement" to be introduced
As part of efforts to streamline administrative processes, the ministers confirmed the introduction of the "silence means agreement" principle, though it will only take effect toward the end of the year. Under this system, municipalities will be required to make decisions on construction permits within four months. Applicants will have two months to submit all necessary documents, after which municipalities can no longer halt the process due to missing paperwork. In the following two months, the municipality must either approve or deny the application.
During an initial phase in 2025, a lack of response from municipalities will be interpreted as a refusal. However, ministers emphasised that this will save applicants time, as they can immediately appeal the decision. By 2026, silence from municipalities will automatically signify approval.
Property tax reform still under consideration
Minister Gloden described the measures as "brave" and addressed criticism from the Luxembourg Socialist Workers' Party (LSAP) regarding the shelving of property tax and mobilisation tax reforms. Gloden clarified that these projects remain "on the radar" and are currently being revised to avoid issues similar to those experienced in Germany.
He also explained that the government has proposed amendments to consolidate and redistribute ministerial duties, which have already been discussed in the relevant parliamentary committee.
