Marc Giorgetti (Félix Giorgetti): Building the Future
Luc Frieden made resolving Luxembourg’s housing crisis his top priority for 2024. Several meetings later, the problem remains unsolved, only slightly eased by falling interest rates. An interview with Marc Giorgetti.
How do you assess the current situation?
I look at it from the perspective of a third-generation entrepreneur. For context, my great-grand-uncle Achille brought my grandfather Eustache to Luxembourg to build the Arbed headquarters, now occupied by Spuerkeess at 19, avenue de la Liberté. The current situation is highly complex. On one side, a significant amount of infrastructure work is underway hospitals, railway lines, large buildings giving the impression that the sector is still doing well. But in terms of residential construction, the country should deliver around 5,000 units per year 6,400 according to the IDEA Foundation. In reality, we are trending around 500. Each year, the gap between the nation’s housing needs and the actual projects widens. And remember: any construction started now will not be completed before 2027. That delay creates a major obstacle for Luxembourg’s growth, for housing employees, and for maintaining the social security and pension systems. A highly relevant issue right now.
"Luxembourg must innovate in the same spirit as the Rau law did at the time."
What solutions do you see?
It really should not be complicated. Looking at state-owned land, municipal properties, the Kirchberg and Belval development funds, or former industrial sites, you will find three million square metres ready for construction if we simplify the procedures. We need emergency measures to unlock these projects with fast-track permits. Then, from the investor’s side, property must become attractive again. Take a simple example: if you buy an Apple share and keep it for six months, you do not pay taxes on the capital gain. Luxembourg should introduce similar incentives to boost investment just as the Rau law did in its time. Real estate must regain its appeal through financial innovation that aligns with today’s economic context.
What risks do you foresee if the situation persists?
Interest rate cuts may offer a slight rebound, but more broadly, the country must acknowledge that reforms are necessary to match evolving lifestyles. In 2025, in Luxembourg City, half the population will live alone. One quarter will live as couples, and the remaining quarter in larger households. Yet regulations still focus on building 80 to 90 square metre units. For instance, if you want to build a 40 square metre studio, you need to balance it with a 140 square metre apartment. The real market demand among staff at the Big Four, Ferrero, or Amazon is for smaller units. Increasing density is crucial and must be authorised again, especially in areas near major roads. The biggest risk? Missing the recovery. The construction sector lost 10,000 out of 60,000 workers in three years. When the market rebounds, it will be difficult to quickly find the labour force needed.
"The biggest risk is missing the recovery."
How do you envision Luxembourg a generation from now?
To predict Luxembourg’s future, one must first consider the future of Europe. How will 450 million people unify under current political and economic conditions? Revitalising Europe’s economy poses a significant challenge after decades focused mainly on legislation and regulation. Everyone in Luxembourg benefits from its outstanding quality of life: excellent schools, culture, sports, social protections, and free public transport. I’m often surprised by how many people complain. That said, I remain optimistic about the future. The policies underway appear to be heading in the right direction. What’s often missing in politics as in business is a clear vision and the courage to follow through with the necessary reforms. Media also have an important role to play.