Luxembourg is expanding its affordable housing fund

On 18 September 2025, the Minister of Housing and Spatial Planning, Claude Meisch, addressed the Chamber of Deputies with his annual report on the Special Fund for Affordable Housing. According to him, 2024 was one of the most productive years, with 504 new properties for social and regulated tenancies. The total number of such units reached 4,226, spread across 292 active projects in 82 communal entities. This is a clear indication that the state is not only focusing on quantitative growth, but also on the territorial diversity of the housing stock.

The volume of investments is in line with the scale of the task: the total financial commitment of the fund has reached 669 million euros, of which 153.6 million have already been transferred to social developers. In addition, the state is actively using the VEFA (housing under construction) mechanism, having acquired 228 properties, and has also invested in the acquisition of 11.9 hectares of land in several regions of the country. The potential of these sites is estimated at about 397 additional housing units.

The government is not just focusing on building housing, but on creating new types of urban environments - sustainable, mixed and social. Major urban projects such as Neischmelz in Dudelange, Wunne mat der Wooltz in Wiltz, Elmen in Kehlen and Itzigerknupp in Bonnevoie reflect a strategy to create neighbourhoods of the future - with a focus on inclusiveness, transport connectivity and multifunctionality. These initiatives are inextricably linked to spatial planning, where housing is not seen in isolation but as part of a wider system.

A wide variety of structures are involved in the expansion of the affordable housing stock. The national company SNHBM is responsible for 36.4% of the housing built, the State Housing Fund for 29.7%, the communes for 19.9%, and non-profit private developers for 14%. This division of roles helps not only to speed up the process, but also to make it more flexible and resilient to market fluctuations.

The key tool remains Pacte Logement 2.0, an inter-municipal agreement that helps to build housing with the participation of local authorities. So far, 98 communes have signed the initial convention and 93 have signed the implementation agreement. More than 29 million euros have already been allocated to them and the total housing counselling has exceeded 30,000 hours.

Speaking in Parliament, Claude Meisch emphasised that the issue of affordable housing has become a national priority: "It is the foundation of Luxembourg's social stability and attractiveness. We will continue to work with the same tenacity to make it a reality for everyone - without exception." The report consolidates Luxembourg's reputation as a country that builds not just houses, but the infrastructure of the future - social, sustainable and open.