“Affordable housing is compartmentalized, I find that very sad. But you can’t win a game when you don’t play it.” Jean-Paul Scheuren rarely minces his words. To be better understood. To raise awareness of housing market challenges.
“All the political parties seem to want to involve the private sector in the construction of affordable rental housing that we need, except the Greens”, regrets the president of the Real Estate Chamber. “It’s still the private sector that provides 95% of housing. I reasonably think that we cannot sustainably resolve the issue of affordable housing without associating ourselves with this approach.”
To each his own job, ours is to bring out square meters of earth.
And to take as an example the ongoing reform of the 1979 law concerning housing assistance which lists a series of actors who may fall within the scope of “social promoter”. A list that ignores private promoters as commercial companies.
For the president of the Real Estate Chamber, it is necessary to review the roles of the stakeholders according to their skills and their expertise: to the state and municipal authorities the organization and the administrative framework; to the private sector the task of building. “To each his own job, ours is to bring out square meters of land, with all the related and sometimes misunderstood aspects, such as development as such which is often underestimated. This essential step before seeing the craftsmen arrive on the construction site consumes a lot of time and energy.
Rising costs… and tenants
While the rise in rates is confirmed, the question of the final cost of housing will continue to arise. “We must aim for a policy that allows spending on housing to be limited to 33% of a household’s income.” It will then remain to redefine new aid for tenants who would be destined to become more numerous, with some prospective buyers being caught between the rates and high price levels, even if these could settle.
“What I fear the most is the impoverishment of the middle class, which will be excluded from access to property despite having comfortable incomes,” adds Jean-Paul Scheuren. A phenomenon that could result in increased caution of promoters vis-à-vis new projects. “Housings will continue to sell – perhaps less easily in the new – but we will address more and more to a clientele of investors who will rent out their property,” adds Jean-Paul Scheuren.
A new deal that would ultimately contrast with the political objective displayed for several decades: to maximize the number of owners. “It was not necessarily a bad approach,” says the president of the Real Estate Chamber. “We must now also ask ourselves the question of access to housing by imagining an additional model: between property and social housing.”
The Real Estate Chamber indeed offers a middle way: rental housing at moderate cost, at 25% below the market price. “We would simply need the support of political power to set up this new market via a state guarantee,” he adds.
And to recall the long-discussed project with ministerial officials for a Luxembourg-style “green book”: opening up private savings for social housing with a tax exemption at stake. An aborted project, but which reflects, underlines Jean-Paul Scheuren, the will of the sector to bring its stone to a building which takes on more and more a social character. With the focus on a housing stock that would be half of the rental.
Build denser… and bequeath a floor
Where to build these additional and essential dwellings? The debate on the preservation of the rural character of certain localities, the quality of life and therefore the growth of the country is never far away. To the need to stimulate supply, the Real Estate Chamber responds with a pragmatic approach: building as a priority around centers of activity or existing housing.
“The provision included in the Housing Pact 2.0 which allows denser construction on the new PAPs, in return for the creation of 15% of affordable housing, seems commendable to us, but why not extend it to all Existing MAPs? If we limit ourselves to increasing the density on the new PAPs, we will inevitably come up against limits of buildable volumes”, points out Jean-Paul Scheuren.
He proposes another solution on certain existing PAPs: “We could imagine increased densification on existing areas and add a floor intended for affordable housing that we could transfer to the municipality which would undertake to ensure the smooth running in terms of authorizations . The idea would make it possible to change the thinking on the creation of affordable housing by moderating expenditure for the State.”
Property tax: going to the end of the reflections
Economic, social and political, housing covers many aspects and continues to occupy the agenda of the government which has promised to tackle property tax reform. In his speech on the state of the Nation in October 2021, the Prime Minister, Xavier Bette l (DP), promised an ad hoc law within 12 months. The deadline is approaching and the subject was discussed on June 10 with the Minister of the Interior, Taina Bofferding (LSAP).
“We are for the fight against vacant land and housing, but will this approach apply to everyone? The figures show that the State also has a large land reserve…”, says Jean-Paul Scheuren who proposes, in the context of this discussion, the establishment of an incentive VAT rate for owners who will renting their accommodation below the market price. And to call for a global vision of taxation on housing: “The current low property tax is perhaps the tree that hides the forest of a sector that is punctured at each stage, for the benefit of the coffers of the ‘State.”
Another subject discussed with Taina Bofferding: the Baulandvertrag or how to ensure, with sanctions in support, that building land is well serviced. A bill amending the law on municipal planning and urban development must set this framework and the penalties. But the Council of State issued several objections to the text due to legal uncertainties. The teams of the Ministry of the Interior must therefore review their copy. “We are always reluctant to any form of expropriation, but if, at the end of the process, the owner does not service his land, we understand the issue”, specifies Jean-Paul Scheuren on this subject.
We may have reached a limit in terms of numbers and, sometimes, professionalism.
As for the interview of May 19 with the Minister of the Economy, it allowed us to come back to the idea of Franz Fayot (LSAP) to cap the commissions received by real estate agencies. “The selling price depends mainly on the promoter in the new and the seller in the case of existing properties”, notes the president of the Real Estate Chamber. Who recognizes that individuals are subject to a form of auction on the estimated price provided by certain unscrupulous agents to win the market.
It is up to the Competition Council to carry out a study at the request of the Minister – and welcomed by the Real Estate Chamber – on these commissions which theoretically amount to 3% of the sale price (excluding value added tax, VAT), payable by the seller. But which are also often the subject of negotiation.
“We are aware that we are talking about a hyper-competitive market with 1,000 new authorizations issued each year to practice as a real estate agent. We may have reached a limit in terms of numbers and, sometimes, professionalism,” explains Jean-Paul Scheuren. The strengthening of training being in progress, the idea of limiting the number of agents and checks is gaining ground.
Factor of attraction, reflecting the ability of the various stakeholders to dialogue, housing occupied a round table organized by Paperjam on October 13th. The idea of national housing foundations was shared there.
“According to my information, meetings will be organized soon by the ministry, but, on this date, we have not been invited. I hope that we will soon be able to meet the minister (Henri Kox, déi Gréng, editor’s note) who let us know that his door was open. We hope that his spirit is too”, concludes the president of the Real Estate Chamber.
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“No affordable housing without the private sector”
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