Poor housing even for the not so poor

If one looks at Luxembourg’s history, a case can easily be made that the country’s golden age is precisely right now. The economic boom over the last 20 years is easily a big part of that argument, and the country has begun to offer an exponentially higher ceiling in terms of lifestyle for those looking to make the grand duchy their home. At the same time, paying for said home has become a bigger challenge. While high real estate prices are an unwelcome expense for those earning above average income, for those struggling financially it is often a dealbreaker that can impact their future.

"The real estate market is the main cause [for ending up in a difficult situation]. You will always have people in difficulty, and you have that in other countries where real estate isn’t as expensive. But here in Luxembourg, it eats away your money, " says Gilles Hempel, CEO of the Housing Access Foundation. Since 2009, the birth of the foundation and his appointment, he has witnessed the evolution of social housing in the country. The Hamm-based organisation assists people with housing problems who are often in a precarious financial situation.

A third of the foundation’s clients are former refugees who have received the international protection status. In terms of origins, approximately a third are Luxembourgers, another third is from other European countries and the rest come from Africa and the Middle East. Being a victim of domestic abuse, unemployment, low income, drug or alcohol addiction or having to exit their accommodation and then not being able to afford another one line up among the more common causes. Poor money management ranks low on the list of issues, according to Hempel, but the foundation provides assistance in that regard when needed.

A five-year safety net

The foundation offers a temporary workaround to those in need of social housing. A contract of three years with an option to extend for two more allows the tenants to pay a substantially lower rent, set at one third of their monthly income at most. If unforeseen expenses arise for the inhabitants, they can communicate that to the foundation and arrange a temporary reduction of their rent. However, that does not impact the owner of the residence who has a separate contact with the foundation which in turn pays them the rental fee. The tenants and the landlord are not in direct contact and have no explicit expectations of each other.