“Many people who have recently bought a home are crumbling under the weight of inflation and rising interest rates. This is the latest proof that the private sector cannot overcome this crisis and that the housing policy of recent years has been a complete failure. It is time for a radical change of approach. The state must tackle the problem head on and create public housing on a massive scale,” insisted Gary Diderich, spokesperson for déi Lénk, on Wednesday 1 February during the presentation of the leftwing party’s “housing package.”

Déi Lénk is therefore proposing that public actors acquire existing housing. “Because of the current housing crisis, prices are falling, so now is the time to buy. Whether it is vacant housing, housing in the process of being completed or old housing in need of energy renovation. Of course, the same actors should also buy undeveloped land in order to develop it as quickly as possible,” added Ana Correia Da Veiga, member of the Luxembourg City Council and member of the participative housing cooperative Adhoc.

Applying the CCF strategy

Another proposal from the left is the creation of a construction company with public capital. “To finance our package, it would be enough to double the budget of the Special Fund to support housing development for one year. Thus, the fund could take care of 75% of the operation. The remaining 25% would be covered by the municipalities and associations. In order to help the municipalities and associations, the registration fees will have to be reduced to a minimum and the VAT for affordable housing will have to be fixed at 3%, as we requested in a motion in 2019,” said Diderich.

Déi Lénk also did not forget the role that the Common Compensation Fund (CCF) can play in the general pension scheme. “Its strategy provides for a 5% investment in real estate. However, in the 2021 report, we can read that the fund invested only 1.5% of its assets in housing in that year. This is a refusal to use a crucial instrument in the fight against the real estate and housing crises. For example, in 2021, the non-implementation of the CCF strategy deprived housing policy of €865m,” said déi Lénk.

After the CSV, which also presented its proposals to fight the housing crisis, déi Lénk is now relying on public actors, while the CSV was advocating aid for private actors. In any case, the subject will be discussed in the weeks and months to come with the upcoming municipal and legislative elections in June and October.

This story was first published in French on . It has been translated and edited for Delano.