New analyses by the Housing Observatory: land used for construction, non-use of rent subsidies and tenants' housing conditions

To coincide with National Housing Week, the Housing Observatory is publishing three new studies to support the implementation of housing and accommodation policies. They provide valuable information on the consumption of land for the construction of new homes, the non-use of certain social benefits by potential beneficiaries and the housing conditions of tenants on low incomes. The results of these studies show that the efforts made in recent years are bearing fruit, but need to be reinforced.

Land used for housing construction between 2016 and 2022

In a context of increasing pressure on the environment and natural surroundings, "La Note 35" provides a detailed analysis of the use of land reserves for the construction of new housing New homes can be built either on land that has not yet been built on, known as "consumed land", or on land where a pre-existing building has been demolished and replaced by a new one, known as "rebuilt land".

The analyses in "La Note 35" update the analyses of land consumption and reconstruction for the period 2016-2022. Here are the main findings:

• The period 2016-2022 was marked by stable residential consumption, and a significant increase in the rebuilding of residential land. This reflects growing pressure to find land for construction in a context of high concentration of residential land.
• A significant number of dwellings were created over the period: 17,000 dwellings came from land consumption and around 12,000 from reconstruction (without taking into account the number of dwellings that may have been demolished during the reconstruction process).
• The proportion of flats is higher for reconstruction (78%) than for land consumption (59%). The net density obtained is therefore also higher for rebuilt land: 39.7 dwellings on average per net hectare on consumed land compared with 53.7 dwellings per hectare for rebuilt land.
• Vacant urban spaces, known as "Baulücken", account for 43% of the land consumed.

Reducing non-use of rent subsidies in Luxembourg

Since its introduction in 2016, the rent subsidy has aimed to support tenants in Luxembourg with low incomes, and whose housing-related expenses exceed 25% of their net income (law of 9 December 2015). However, the Ministry of Housing estimates that by 2023, around 76% of potentially eligible households will not be making use of this assistance. This situation raises questions concerning, on the one hand, the socio-demographic characteristics of households that are entitled to the rent subsidy but do not apply for it and, on the other hand, the reasons why they do not apply for it.

Analysis report n. 8 is based on an analysis of the initial results of the "affordable housing" survey carried out by the Housing Observatory between February and August 2023. It shows that:

• 47% of potentially eligible households, but not recipients of the rent subsidy, are unaware of the housing subsidies available in Luxembourg. This particularly concerns people aged between 19 and 35, and people of non-EU nationality.
• 45% of potentially eligible households who are not in receipt of rent subsidies believe that they are not eligible for housing benefit. The groups in which this is most often the case are people aged 56 to 65, households with 2 children and those with a nationality from an EU country.

On the basis of these analyses, it would seem appropriate to:

• improve general communication about rental housing subsidies,
• better identify the eligible populations (possibly through new sources of administrative data on tenants),
• to improve communication about grants aimed at less well-informed groups (foreign nationals and young people).

Estimated number of households eligible for rent subsidy

Data for 2023 are taken into account up to 18 September only.

Combining housing-related difficulties to obtain a more coherent view of households' living conditions

The Housing Observatory's "La Note 34" introduces an indicator of cumulative housing-related deprivation, thus providing a new perspective on the housing conditions of households in Luxembourg's private market.

Housing deprivation, as defined in this report, encompasses the problems and challenges faced by households and includes, in addition to the inability to cope with unforeseen financial expenditure, situations such as overcrowding, water leaks, noise nuisance from neighbours, and arrears in the payment of housing-related charges. Household housing conditions are measured on the basis of 12 indicators taken from the EU-SILC 2019 European survey, which can be aggregated at household level.

Nearly 36% of tenant households and 54% of owner-occupier households with a mortgage claim not to be experiencing any difficulties with their housing. For the least well-off tenants, only 22.6% say they are in this situation. The graph below shows that, in 2019, 47.1% of the least well-off tenants are experiencing at least two housing-related difficulties, and 31.8% at least three.

In order to assess any improvement in deprivation conditions, it would obviously be necessary to extend the study over time.

Press release by the Ministry of Housing