How the “Room Rental” Boom is Reshaping Luxembourg
Luxembourg real estate promises premium living. But what happens when your neighbour’s family home quietly morphs into a sardine can for strangers?
This four-part series takes a closer look at how Luxembourg’s growing room rental market is reshaping our neighbourhoods - and what it means for the quality of life and the future of community life.
1. The New "Hostel" Next Door
In Luxembourg, we regulate the height of your garden fence to the millimetre, but how many strangers can share a bathroom before it qualifies as a public facility? The answer, apparently, is more flexible than you’d think.
Here’s the business plan:
Take a regular single-family home. Don’t bother with renovations (too costly). Skip the permits (too complicated). Simply cut it up on paper. Forget families. Forget long-term tenants. Instead, rent out each bedroom individually. Charge each occupant between €800 and €1,200 a month. Don’t worry about the parking - the street will absorb the cars somehow. Call it colocation.
Because nothing says neighbourly warmth quite like coming home to a house full of strangers who weren’t there yesterday and might not be there next week.
And no, this isn’t a theoretical scenario. It’s a business model. One that’s spreading through Luxembourg’s towns and villages faster than election season promises. Family home on Monday, micro-hostel by Friday.
If you think this is just a problem for the big city, think again. It's not limited to Berlin, Brussels, or Barcelona.
It's happening beyond Luxembourg City and Esch-Sur-Alzette (the second largest town in Luxembourg).
You'll also find it in Bettembourg, Dudelange, Remich, and even smaller villages close to Luxembourg City - places where you'd expect a bit of tranquility, unless, of course, the rental math says otherwise.
All the charm of small-town life, but with the parking situation of a festival campsite.
The logic is simple: when rental prices are high and regulations are vague, squeezing maximum profit out of every square metre becomes irresistible. Why rent your house to one family, when you can rent it by the slice?
Never mind the neighbours. Never mind the infrastructure. Never mind the question of what happens to a place when homes stop being homes and start becoming revenue streams.
Because here’s the thing: density alone doesn’t destroy a neighbourhood. But turning your street into a loosely supervised collection of bed factories? That just might.
2. What Is Colocation (And Why It’s Not What You Think)?
Let’s clear something up right away: not every shared flat is a “Café Zemmeren Model”. And not every colocation is a problem.
True flat shares - students renting together, friends co-living by choice, a couple subletting their spare room to make ends meet - are not what this is about. Those situations come with a shared contract, shared responsibility, and, most importantly, some kind of social glue. You know your flatmates. You share a kitchen, not just a Wi-Fi code. Maybe you even argue about the right way to load the dishwasher. That’s normal. That’s life.
The model we’re talking about here has very little to do with this idea of home-sharing.
It’s what happens when a landlord looks at a single-family house and sees not a home, but a spreadsheet.
The business plan is brutally efficient:
• Take a family house.
• Don’t split it into apartments - that would require permits.
• Keep the structure exactly as it is.
• Chop it up on paper instead: rent out each bedroom separately, sometimes even with double occupancy.
• Charge per head.
Congratulations! You’ve just unlocked the next level of passive income. Forget soundproofing, parking spaces, or neighbour relations. You don’t even need to know who’s living there next month, as long as the rent keeps landing in your account.
This isn’t co-living. It’s crowd-living. Sardine-style.
Calling this colocation is like calling a sardine can spacious studio living with fellow fish enthusiasts.
And here’s where the local flavour comes in: In Luxembourg, this model has a name with history “Café Zemmeren”. A nod to the old practice of renting out rooms above cafés, often in dismal conditions, to whoever was desperate enough to say yes. Hygiene optional, fire exits negotiable.
Today, the practice has simply moved upstairs, and out into the suburbs.
It’s not just a city issue. Even in those postcard villages where the shutters are freshly painted and the facades still whisper “respectability.” The maths works wherever the demand is high enough, and the oversight low enough.
Why rent your house once when you can rent it six times over?
Still curious? The story continues in [Part II →]
If you’d like to share your thoughts or personal experiences, I would be happy to hear from you.
written by Helen M. Krauss