Minister of Housing Claude Meisch told members of the Parliamentary Housing Committee on Thursday that he intends to completely overhaul the proposed rent cap legislation. Meisch emphasised the need to adapt the draft bill to current economic conditions and base it on recent data.
Both the government and opposition acknowledge the shortcomings of the current rent cap. However, they differ on the urgency of reform. While opposition parties advocate for a swift implementation of revised regulations, Minister Meisch wants to take his time.
Balancing tenant protection with investor confidence is a key concern for Meisch. “The housing market today is significantly different from two years ago, with considerably higher interest rates on home loans,” he explained. “We must carefully consider this new reality before enacting legislation that could have negative consequences in the future.” The Minister fears a potential freeze in the housing market if reforms are rushed.
“We need to incentivise investment in residential properties to increase availability,” Meisch stated. “This objective, of course, must be balanced with ensuring the protection of tenants who rely on the rental market for housing.”
Opposition parties acknowledge the need for further analysis but remain sceptical of the construction crisis argument. “It’s a bit far-fetched,” said François Bausch, MP for the Green Party (déi Gréng). “While taking time for careful consideration is sometimes necessary, in this case, it’s particularly frustrating,” Bausch continued, “because tenants are the most vulnerable group in the housing crisis.”
Minister Meisch outlined a two-step approach. First, the Housing Observatory will conduct a new assessment of the current rental market situation. Following this, discussions will be held with all stakeholders to determine the most effective solution. Meisch refrained from providing a specific timeline for the process, acknowledging the complexity of the issue and the unlikelihood of a quick fix.
Taina Bofferding, president of the Luxembourg Socialist Workers’ Party (LSAP) parliamentary group, has made clear her intention to hold the government accountable. She stressed that re-analysing the issue once again cannot mean “staring at the ceiling and forgetting about the task at hand.”
