The Luxembourg government, at its cabinet meeting on Friday 23 October, adopted three draft bills on the reorganisation of the Fonds du Logement (Housing Fund).
A thorough analysis of how the Housing Fund, supported by various audits, highlighted the need to reform its fundamental functioning in order to meet its expectations, with a focus on governance, transparency of its management and employment of public resources allocated to it. These texts are intended to boost the supply of social housing.
The new approach is defined in accordance with the European rules on state aid and provides for compensation in two parts: firstly, endowments covering part of the price of the acquisition of land and, secondly, compensation for deficits concerning the exploitation of social rental activities.
The members of the Board of Directors will be appointed for a term of five years, renewable once, with the mandate of the members of the steering committee not limited in time. The Board of Directors will include in the future a representative of the Syndicat des Villes et Communes Luxembourgeoises (Syvicol).
State control on the fund is being increased, with the Minister for Housing appointing a government commissioner overseeing its technical, administrative and financial aspects and monitoring compliance of the legislation as well as agreements with the state.
The state will guarantee loans contracted by the Fund of up to 60 million euros. The limit of the State guarantee is still set at €25 million. The tax exemption enjoyed by the fund is abolished.
