This paper examines the political economy of urban residential land in Luxembourg, focusing on the impact of the landownership structure and of unequal access to land on landowner and developer land strategies. The rapid and intense house price inflation and severe undersupply of housing relative to demand—driven by Luxembourg’s rapidly growing population and finance-based economy—has dominated public debate in recent years. However, the critical role of the landownership structure and of the balance of power between social actors around the system of landed property remains notably absent from political discussions and government policies aimed at tackling the housing crisis. Luxembourg’s residential landownership is dominated by a small number of private individuals and companies, while state-owned land remains minimal. This extremely concentrated landownership structure favours land hoarding – a phenomenon exacerbated by the country’s low property tax regime – and puts landowners in a position to influence the amount and location of new housing. It also complicates access to land for new market entrants. Drawing on semi-structured interviews with private developers and landowners, the paper identifies two key strategies mobilised by those involved in the production of housing: conservation and production. On the housing developer side, access to developable land introduces a split into two capital fractions with conflicting interests. Conservative developers, who control significant land reserves, often behave more like speculative landowners, deliberately withholding land to inflate prices and slow build-out rates. In contrast, productive developers, who treat land as an input for construction, face severe constraints even though some are often more capital-rich: while some are already bankrupt or at risk of bankruptcy, others are forced to merge, adopt cooperative strategies, or engage in public-private partnerships where land is provided by public or semi-public institutions to survive in the market. On the private landowner side, the same two strategies can be identified. For those who hold large tracts of land, piecemeal or large-scale land sales allows for meteoric wealth creation. However, the pull of conservative strategies is particularly strong in the Luxembourg context: land serves as an illiquid asset, a hedge against uncertainty, or long-term family security, with owners often reluctant to liquidate due to fears of managing large cash sums. At the same time, in some cases, land carries personal and emotional significance, rooted in family history and attachment. This coexistence of commodified and decommodified meanings of land highlights the complex motivations of private landowners. By examining these dynamics, the paper analyses the interplay between concentrated landownership, land-based strategies, and fragmented class interests, offering critical insights into Luxembourg’s housing affordability crisis and its structural factors.
