Triple A, but no apartment?

AAA rating for public finances – but what does that mean for the people?

Luxembourg is one of the few countries that still has an AAA rating. The state attaches great importance to this, as it naturally makes a good impression when you can brag about it to foreign investors.

However, this is of little use to the normal population. What use is a AAA rating to a family if living and housing in their own country is increasingly becoming a question of survival? For many households, rent or mortgage now account for over 40% of their income. There are clear recommendations from the OECD that housing costs should not actually exceed 30% of disposable income. In Luxembourg, however, this limit has been massively exceeded for years.

But perhaps this is the new Luxembourgish definition of “affordable housing”: when you have enough left over for gas and a frozen pizza after the rent.

The middle class is coming under increasing pressure.

And it is no longer just people on the minimum wage who are affected. Quite the opposite. It is above all those people who are just above the social thresholds and therefore receive no or only minimal state support who are increasingly suffering from this situation.

For many single parents, it has become almost impossible to find affordable housing in Luxembourg. Many young people in particular, who are just starting their careers, are moving across the border. Family plans are being put on hold and more and more people are wondering whether they even have a future in their own country.

And you have to ask yourself the question: Aren’t we also weakening our social life, our sense of community and, in the long term, even our economy?

Many announcements – but few concrete results.

The government regularly introduces new measures that may be well-intentioned, but do not solve the core problem.

A “Pacte Logement 2.0” was announced, along with a reform of the VEFA system. There was also talk of “housing bonds”, which again sounds more like a measure to attract investors than a concrete response to people’s problems.

Because if a normal family can no longer find an apartment, it is of course logical to bring another attractive financial product onto the market first.

Simplified registration via Guichet.lu should make it easier for people to access affordable housing. But this raises a simple question: What good is a digital waiting list if there is not enough affordable housing?

But at least you can now apply in a modern, digital way for an apartment that doesn’t even exist.

A rent register is also to be introduced to make it easier to track how high rents are and how many apartments are vacant. Transparency is certainly not a bad thing.

However, if tenancy law itself is not applied consistently, then this also remains merely an administrative measure with no real effect. Moreover, the rent register is controversial even within DP’s own ranks and has already triggered internal criticism.

The same applies to the planned national rent commission. Of course, it may make sense to better regulate disputes between landlords and tenants. But here too, one could ask whether this is not just more administrative tinkering while the actual housing crisis is getting worse.

And finally, “coffee shops” have now simply become “apartment buildings” – as if a new name would change the reality of the situation. For a wealthy country like Luxembourg, it is a bitter tragedy that in 2026 we still have to debate whether 9 square meters and reduced safety regulations are acceptable for such forms of housing.

Luxembourg is getting better at documenting, analyzing and managing the housing crisis – just not at solving it.

The market alone will not solve this crisis.

To really get a grip on the housing crisis, clear goals and the courage to implement them are needed.

It should be clear to everyone by now that the market alone will not solve this situation.

Luxembourg needs up to 6,000 new apartments per year to meet actual demand. Rents must remain affordable in the long term and must not be constantly adjusted speculatively.

Planning procedures must finally be simplified and accelerated. It is unacceptable for each municipality to have its own rules and thus block projects for years. The municipalities must also realize that they cannot each go their own way in such a national crisis.

At the same time, building land must be released. It must no longer be profitable to leave land lying fallow for years just to make even more profit from it later.

Politics is responsible.

There are many other measures that would be necessary. But this requires a government that is also prepared to make really bold decisions – and not just constantly announce new studies, registers, commissions or “innovative” financial products.

After all, housing bonds may sound modern and innovative, but in the end it sometimes feels like investors are once again being given another opportunity to profit from the housing crisis, while ordinary families are still wondering how they are going to pay their next rent or mortgage.

However, the government has a duty to give everyone a prospect of affordable housing – as provided for in Article 40 of the Constitution.

But perhaps “view of living space” now means that you can at least see your own home from a distance.

What future do we want for Luxembourg?

Luxembourg is at an important crossroads: are we prepared to accept that affordable housing is increasingly becoming a privilege for those who earn a lot or have family wealth to fall back on?

Or that foreign investors are taking over the real estate market here in order to increase yields even further?

The need is clear: Luxembourg needs around 6,000 new homes every year. If the private market cannot provide this, the state must take on more responsibility and create affordable housing that is not left to speculation.

The question is therefore which future we want: a country in which only the strongest can afford to live, or a Luxembourg in which young families, workers and the middle class still have realistic prospects?