Co-living and short-term rentals in Luxembourg are governed by unclear rules, according to a study by the Housing Observatory published on Friday, with inconsistent standards on safety, density, and tenant registration creating gaps in oversight across communes.
The study, authored by Liser researcher Constance Uyttebrouck, shows that co-living -furnished rooms rented individually with shared common spaces – and short-term rentals targeting mobile workers and expatriates – blur the line between residential housing and hospitality.
This ambiguity complicates how municipalities define housing units, apply safety standards, and manage tenant registration, the report states.
Local administrations do not necessarily fully understand [co-living and short-term rental projects] in terms of their implications
Housing Observatory report ‘Enjeux de régulation liés au développement de nouveaux segments sur le marché locatif privé’, 2025
As a result, local authorities often find themselves without clear guidance when deciding whether to approve or regulate these projects. “Municipalities therefore appear more or less powerless in the face of requests for such projects […] which local administrations do not necessarily fully understand in terms of their implications,” the report says.
Without clear criteria for these new housing types, some municipalities may have little choice but to accept proposals from large international developers, giving them influence over local housing projects.
Planning decisions could end up reflecting developers’ priorities rather than local housing needs. “More comprehensive planning and greater regulatory certainty […] would also help curb opportunistic behaviour in the choice of locations and project purposes,” the report says.
Co-living in Luxembourg: convenient solution or exacerbating the housing crisis?
Not all co-livings in the country have the same standards
Under Luxembourg law, a logement is defined as a self-contained unit with a living area, kitchen, and bathroom. Co-living clusters, where several private rooms share common facilities, do not neatly fit this definition, complicating enforcement of safety standards and tenant registration, explains the report.
Uyttebrouck reviewed national housing, planning, and registration laws, as well as local building regulations in eleven communes, revealing a patchwork of approaches: Hesperange and Differdange – for example – specify minimum room sizes and require a second emergency exit; Esch-sur-Alzette and Dudelange demand prior authorisation for collective housing conversions; Luxembourg City allows large co-living projects to be counted as single housing units.
Muddy waters: how legal are Luxembourg’s rental practices?
Short-term rentals, legally classified as commercial accommodation, present further confusion: Some communes have allowed residents to register in these properties, but the 2013 law restricts registration to habitual residences. “It is generally not possible to register [residency] in short-term rentals, which are considered lodging establishments and are not regarded as housing,” the study explains.
Overlapping categories between co-living, shared apartments, and short-term rentals make enforcement difficult, with some landlords exploiting the ambiguity to bypass stricter rules, says the report. “Another area of tension lies in the fact that certain co-living and short-term rental developments […] are located at the interface between housing and hospitality.”
To address these grey areas, the Housing Observatory is planning a National Register of Buildings and Housing, which could clarify property usage and strengthen municipal oversight.
Additionally, several communes are already developing local databases combining housing and population information to flag irregular situations.
