Article 29bis – Pacte logement 2.0

No, funds that benefit from the lifting of a ZAD, even after 18 February 2022, are not covered by the provision of article 29bis (2), paragraph 3.

This depends on the number of dwellings actually permitted in the PAP, which must comply with article 29bis in particular. The procedure is as follows:

First step:

The building potential is first determined by taking into account the increase in surface area and number of dwellings based on the counterpart provided for in article 29bis, in this case 10%. In extreme cases, however, it may not be feasible to use all of the building potential obtained in this way, in order to ensure the harmonious integration of the project into the existing built fabric.

Second step:

On the basis of this building potential, a development project that does not exceed these theoretical maximum values and that complies with the PAG land use plan and the ratios relating to the mix of urban functions and housing types (single-family - multi-family) is developed. We recommend applying the ratios relating to the mix of housing types also to affordable housing.

Third step:

Finally, the housing units and SCBs, which may not reach the aforementioned buildable potential, are distributed over the different lots. (See Appendix I - Summary table - February 2022 version).

Fourth step:

The gross built area earmarked for affordable housing ("SCB-logabo") is calculated on the basis of the number of dwellings and the maximum SCB dedicated to housing, as actually adopted in the PAP, and not on the basis of the maximum building potential.

So, for our example, we could waive the maximum permitted number of dwellings of 26 and then submit a PAP that only provides for 25 housing units.

As a result, 10% of the SCB dedicated to housing would be reserved for affordable housing. Compliance with article 29bis is therefore determined on the basis of the specific features of each PAP application. If, on the other hand, the maximum number of dwellings permitted in the PAP is only 26 units, 15% of the gross floor area allocated to housing must be reserved for affordable housing.

Please note: if the PAP is amended later on, article 29bis will still apply. An increase in the number of dwellings is likely to generate a different proportion (e.g. 15% instead of the initial 10%) of the area to be set aside for affordable housing.

If a PAP modified in this way is already in the implementation phase, however, such a modification of the PAP is likely to complicate its implementation in terms of compliance with these new provisions when the relevant building permits are issued.

No, municipalities cannot require developers of special development plans to devote more SCB to affordable housing than the minimum percentage stipulated in article 29bis. However, PAP initiators are free to exceed this minimum percentage when drawing up the PAP.

If a PAP covers land reclassified from a zone other than a residential or mixed zone to a residential or mixed zone by an amendment to the PAG, the proportion of the gross built area of the land reserved for affordable housing is increased to 20%, 15% or 10% respectively.

The provision in question relates exclusively to amendments to the PAG concerning the classification of the original zone, which relate to the classification as a residential or mixed zone (e.g. changing the ECO zone to HAB-1), for which the adoption procedure (first vote by the Communal Council) was initiated after 18 February 2022.

According to article 29bis, the municipality must accept or reject the transfer of land reserved for affordable housing or, where applicable, affordable housing with the corresponding share of land, at the latest when the agreements relating to this transfer are drawn up.

However, it is certainly advisable to raise this issue with the municipal authorities (as potential future transferees) beforehand, preferably at an early stage in the development of the urban planning concept for the PAP in question.

In principle, this allocation should be made in close consultation with the future transferee, preferably at an early stage in the development of the urban planning concept for the future PAP.

With regard more specifically to the types and configurations for affordable housing, please refer to the provisions and specifications drawn up by the Ministry of Housing and Spatial Planning:

https://logement.public.lu/fr/professionnels/aides-etatiques/demande-aides-a-la-pierre.html

In particular, the specifications will ensure that future homes built under the PAP have living areas that will enable them to be eligible for the various grants offered by the Ministry of Housing and Spatial Planning. The same applies to the type of dwelling and the layout of the interior rooms.

Both the distribution of the surface areas reserved for affordable housing and the determination of the types of housing planned for this purpose need to be discussed with all of the stakeholders involved from the outset of the project's urban design, in particular during the meeting with the PAP consultation platform.

As for checking the conformity of the affordable housing and its designated areas (Art.29bis Loi ACDU):

Any experts, in particular urban planners (registered on the relevant list with the OAI), may carry out such checks by using the Excel table in Appendix I - Summary table - (latest version) or by making an appointment with the consultation platform. The purpose of this platform is to enable municipalities, together with project initiators, to obtain advice prior to the elaboration of a PAP, before the file is officially submitted for the adoption procedure provided for in article 30 of the amended Act of 19 July 2004 on municipal planning and urban development.

As for the provisions contained in the specifications by the Ministry of Housing and Spatial Planning, project initiators will have to check directly with the ministry.

https://logement.public.lu/fr/professionnels/aides-etatiques/demande-aides-a-la-pierre.html

The PAPs define for each lot or parcel the number of affordable housing units and the gross built area to be reserved for affordable housing. Lots or parcels that are subject to significant constraints in terms of execution, likely to generate disproportionate costs in terms of creating affordable housing, are not subject to this regulation.

Lots reserved in whole or in part for affordable housing should be determined in close consultation with the municipality, the private developer and the public developer who will be responsible for managing the affordable housing units.

Lots and parcels reserved for the development of affordable housing do not necessarily contain affordable housing only. In this case, the affordable housing units will have to be ceded with their share of the corresponding funds, and a cession of exclusively these funds is not possible.

All the coefficients relating to the degree of land use (DL, CUS, COS, CSS), as determined in the PAG, are increased by 10%. However, the resulting maximum number of dwellings must always be rounded down.

For example, for a project covering an area of one hectare and with a DL of 24, the PAG allows 24 housing units (without application of article 29bis), i.e. 26.4 units, taking into account the provisions of article 29bis. A maximum of 26 housing units may therefore be planned in the PAP.

Yes, this increase is always limited to 10%, irrespective of the percentage of the SCB to be reserved for affordable housing (10%-15%, if applicable, 20% or even 30% [if PSL]).

It is reduced according to two factors:

-          the proportion of land owned by public developers, and

-          taking into account functions other than housing.

The SCB-logabo is to be defined based on the maximum SCB reserved for housing as set out in the PAP, taking into account, if applicable, the increase in building potential of 10%.

The first step is to check that the project complies with the summary table in the supporting report, for each zone for which the same degree of land use is set in the PAG. In the case of different coefficients relating to the degree of land use (CUS, DL, COS or CSS), it is necessary to draw up several tables.

In these tables it will also be necessary to enter the proportion of the SCB-logabo for each zone analysed using the above-mentioned tables.

However, it is possible that in one or more zones covered by a single PAP, the proportion of the SCB-logabo, as required by the provisions of article 29bis, is not achieved, due to a disproportionate distribution of affordable housing within the PAP. In fact, a disproportionate distribution of affordable housing across the different zones of the PAG is not contrary to the law, if the aforementioned minimum share is respected for the entire PAP, and without prejudice to the provisions of article 2 of the aforementioned law.

If the table provided in XLS format by the Ministry of Home Affairs indicates that part of the surface area covered by a PAP does not meet this minimum share, the table can be completed with a comment providing information on the total SCB-logabo of the PAP and the share of SCB-logabo for the entire PAP.

These agreements must be signed and, where applicable, approved by the Minister for Home Affairs before any building permit is issued for one or more dwellings (affordable housing or "conventional" housing). Apart from this requirement, there is no statutory deadline.

The decision to opt for a transfer of land reserved for affordable housing or, as the case may be, affordable housing with its corresponding share of land is made simultaneously. It is therefore important to raise this issue with the public authority at an early stage in the development of the urban planning concept, which will subsequently be translated into the PAP.

This is the net building plot, i.e. the fully serviced plot that is to be transferred free of charge. The dwelling itself is to be sold at the value equivalent to its completion price.

It is the responsibility of the project owner, in consultation with the future transferee, to define the level of finish and equipment, as well as the plans for the construction of the affordable housing, since these terms and conditions form an integral part of the agreements.

Similarly, a private developer may be appointed in the case of a transfer of affordable housing to the municipality, in order to monitor the completion of the project.

The law does not explicitly regulate the level of detail required in these documents. It is obviously useful for these documents to be sufficiently detailed to enable the transfer of the property with full knowledge of the facts on the part of the transferor and the transferee. The preparation of execution plans does not seem to be required at this stage, as such plans are excessively detailed, whereas a preliminary design is hardly sufficient at this stage. Final plans should therefore be used wherever possible.

When the public authority builds the affordable housing, these costs are its responsibility. If it is the initiator of the PAP NQ who builds the affordable housing, these costs will initially be its responsibility. However, they will be recovered when the housing is sold, since the sale price will be equivalent to the completion price, which obviously also includes the related planning costs.

First of all, it should be noted that an exclusive transfer of land reserved for affordable housing is only conceivable if these plots are exclusively reserved for affordable housing. In fact, the free transfer of land under article 29bis is excluded if "conventional" housing or functions other than housing are also permitted on this land.  

Pursuant to article 29bis, the PAP must indicate which lots are to be used for affordable housing. It is therefore up to the regulatory section of the PAP to allocate the gross built area to be reserved for affordable housing to the various lots. The net surface area of these lots is not regulated and does not necessarily have to correspond to the same proportion of the gross built surface area dedicated to housing that will be reserved for affordable housing. The surface area of the plots to be transferred is therefore determined by the urban planning concept and the organisation and size of the plots, as adopted when the PAP was drawn up.

In accordance with article 29bis (6), paragraph 2, the sale price of affordable housing must be equivalent to the completion price. This includes planning costs, which are borne by the transferee, in this case the public developer.

First of all, it should be remembered that the transfer of land reserved for affordable housing is carried out without any financial consideration. Therefore, the value of the transfer of affordable housing units with their corresponding share of funds takes into account only the price of building the units, including their planning costs, and not the value of the land or the costs of servicing it.

Given that this completion price must be set out in an agreement between the transferor and the transferee, which must be concluded prior to the construction of the housing units, this value can only be established on the basis of detailed estimates of the realisation costs for the construction project. This is why the legislator opted for the term "takes into account the costs of completion", in the knowledge that the actual costs of completion will only be known once the work has been definitively completed.

When estimating completion costs, however, it is important to be as close as possible to the actual construction costs at the time, without including a profit margin for the developer.

However, in view of fluctuations in the price of materials and construction in general, which can be significant, it is essential to include a clause in the agreement allowing these prices to be indexed, to avoid the transfer price not being able to cover the private developer's actual construction costs.

Article 29bis does not specify a deadline for the completion of affordable housing.

However, such a deadline may be set as part of the agreement for the transfer of the affordable housing to municipality or another public developer. (See convention-type art.29bis)

Generally, one calculates the net surface area of dwellings as some 25% less than the SCB. Without having at one's disposal the summary plans relating to the various dwellings when the PAP is being drawn up, there is no way of determining the exact usable surface area that the dwellings in question will have during this phase.

However, the definition of the SCB provided for in the Grand Ducal regulation of 8 March 2017 concerning the content of the general development plan of a municipality has been slightly clarified in order to facilitate the application of the provisions of article 29bis of the aforementioned law of 19 July 2004.

There is no specific methodology for determining the SCB to be reserved for affordable housing ("SCB-logabo") at the PAP level on the basis of the SUH. In the context of the PAP, the SCB-logabo needs to be set solely on the basis of the maximum SCB dedicated to housing and the proportion of this area to be reserved for housing. It is only when the architectural projects are drawn up that this SCB-logabo will be allocated to the dwellings, garages and other spaces associated with these dwellings.

At the PAP level, the SCB-logabo will be determined on the basis of the maximum SCB dedicated to housing.

When the PAP is implemented, in this case when applying for the construction permit, the minimum SCB definitively dedicated to affordable housing does not necessarily have to correspond to the minimum SCB-logabo provided for in the PAP, as this is simply a reservation of areas for affordable housing. However, the part of the SCB-logabo reserved by the PAP that is not implemented cannot be dedicated to other urban functions or to "conventional" housing.

Any single-family home can house an integrated dwelling, regardless of whether the dwelling is rented out on an affordable basis, unless otherwise stipulated in the PAG or the PAP. More specifically, with regard to obtaining subsidies, the Ministry of Housing and Spatial Planning considers the SUH dedicated to the main dwelling to be a SUH of a single-family home and the SUH dedicated to the integrated dwelling to be part of a flat.

In this context, a distinction between two cases must be made:

• If, in accordance with the provisions of the PAP in force, such a change of use remains possible because the maximum number of dwelling units permitted has not yet been reached when the initial project was carried out, only an application for a construction permit covering the change of use and, where applicable, the conversion work is required.
• If, on the other hand, in accordance with the provisions of the PAP in force, such a change of use is not permitted because the maximum number of housing units has already been reached when the initial project was carried out, the PAP must first be amended in accordance with the PAG. When the PAP is amended, compliance with article 29bis must be guaranteed for the entire PAP site, which generally also means increasing the SCB-logabo and also means amending the agreements on the transfer of the land and, where applicable, the affordable housing to the municipality or another public developer.

Thus, especially in locations that are less suitable for retail development, such as rural areas and outside the central areas of the main towns of development centres and centres of attraction, it is generally not advisable to plan areas exclusively for retail use, while at the same time consuming the full potential in terms of housing units in the remaining areas.