In comparison to other European countries, Luxembourg’s planning system is still relatively young. Up until the late 1990s, the country’s spatial planning regime was not sufficiently equipped in terms of legal instruments or institutions to steer the dynamic developments as mentioned in section 1 or to counteract unwanted spatial developments. It could even be said that, until the 1970s, spatial planning was of secondary importance. The municipal planning law of 1937 (Loi du 12 juin 1937 concernant l’aménagement des villes et autres agglomerations importantes) aimed primarily at technically-oriented land use planning by requiring all municipalities with more than 10,000 inhabitants, as well as ‘localities in the process of development, swimming resorts and places with a primarily scenic, artistic or historical character’, to draw up a development plan. While the 1974 revision of the municipal planning law of 1937 failed to change the overarching orientation of land use planning, it made general and partial development plans compulsory even for smaller municipalities in the Grand Duchy. Even the spatial planning law (Loi du 21 mai 1999 concernant l’aménagement du territoire) introduced in 1999 could not compensate for the limited conceptualisation of spatial planning in Luxembourg. This new spatial planning law of 1999 did indeed show a broader understanding of land use and included aspects such as quality of life, resource use, nature conservation and cultural landscape issues, and provided for a Higher Council for Spatial Planning (Conseil Supérieur d’Aménagement du Territoire) whose members are appointed directly by the Minister of Spatial Planning on the basis of their institutional affiliation and an Interministerial Committee for Spatial Planning (Comité Interministériel d'Aménagement du Territoire, only active until 2013) to assist the responsible ministry, but its impact remained minimal. The spatial planning orientations contained in the ‘Programmes directeurs’ of 1978 and 1988, drafted on the basis of the new spatial planning law, failed to materialise due to the lack of legally binding instruments, and also due to the rising development pressure that unfolded as a result of the country’s strong growth. 

The introduction of the 1999 spatial planning law led to a paradigm change both in terms of instruments and institutions. Influenced by the European discourse on spatial planning (especially the European Spatial Development Perspective (ESDP) and the Territorial Agenda (TA)), the new law has contributed to modernising the legal basis of spatial planning in the Grand Duchy, to redistributing competences, encouraging interdepartmental coordination and providing ministries with the appropriate personnel and other resources. 

Since 1999, the legal framework has been continuously revised and adapted with the aim to create a comprehensive legal framework that (a) encompasses Luxembourg’s two-tier institutional system with spatial planning competences against the background of a modern multi-level governance approach, (b) combines different formal and informal spatial planning instruments, and (c) takes an integrative approach in the sense of sustainable development. In this way, a planning system is emerging that is structured according to vested institutional responsibilities and specific spatial focal points. 

In Luxembourg’s two-tier institutional system, both the national and the local level hold spatial planning competences. The national level first and foremost has the ministry responsible for spatial planning (currently the Ministry of Energy and Spatial Planning) and above all retains strategic competences via the 2003 orientation framework ‘Programme directeur de l’Aménagement du territoire’ (PDAT) and the 2004 Integrated Traffic and Territorial Development Concept (Integratives Verkehrs- und Landesplanungskonzept, IVL). The purpose of these instruments is mainly to define development objectives for the country’s future territorial structure and to coordinate the various sectoral policies on the basis of the 1999 law on spatial planning. These instruments also address fundamental questions such as how to deal with growth and how the territory is structured by means of the primary sectoral plans (plans directeurs sectoriels primaires) for mobility, housing, economic activity zones and large landscape ensembles. In addition, these primary sectoral plans, enacted as of March 2021, are envisaged to provide the national level with substantial regulative competences to counteract or at least to dampen the negative effects that arise from Luxembourg’s highly dynamic demographic and economic developments. A first draft of the four sectoral plans elaborated by the Ministry of Spatial Planning was presented back in 2014. They eventually had to be withdrawn due to legal inconsistencies and major public resistance as a result of a lack of coordination between the state and the local level with regard to policy objectives, plan content and implementation. In addition to the primary sectoral plans, there are special secondary sectoral plans (plans directeurs secondaires) tailored to integrate the construction of specific infrastructures into a territorial logic, three of which have entered into force so far: a sectoral plan for secondary schools (plan directeur sectorial ‘lycées’), a sectoral plan for landfill sites for inert waste (plan directeur sectorial ‘décharges pour déchets inertes’) and a sectoral plan for base stations for public mobile communications networks (plan directeur sectoriel ‘stations de base pour reseaux publics de communications mobiles’). The land-use plans (plans d'occupation du sol, POS) play a very special role: here the ministry in charge of spatial planning itself develops Land Use Plans for the municipal level. The municipalities, which are actually responsible for urban development at the local level, may only be involved as subordinate actors. This intervention in municipal autonomy is limited to cases of overriding importance, such as for Luxembourg’s international airport and surroundings. These regulatory tools are intended to link to the various national strategic tools and support their implementation. 
On the other hand, there are 102 (to some extent very small) municipalities which, under the supervision of the Ministry of the Interior, have a long tradition of strong formal competences in land-use planning. Neither the revision of the municipal planning law from 2004 (Loi du 19 juillet 2004 concernant l’aménagement communal et le développement urbain) nor the subsequent reforms to the 2004 law (2008, 2011, 2013, 2017) have been able to significantly challenge municipal planning sovereignty, which unfolds mainly through the so-called “General and detailed land-use plan” (Plans d’aménagement general, PAG), the “Accompanying master plans” (plans d’aménagement particuliers, PAP) and the “General planning schemes” (schémas directeurs, SD). With the exception of the very few POSs, the PAG and PAP currently represent the only effective and legally-binding land-use planning instruments. To date, the latter ought to, but from a strictly legal point of view do not have to, respect the national strategic planning instruments. Attempts to make national strategic planning legally binding have been overturned by the Council of State. Furthermore, municipalities in core functional urban areas (Luxembourg City, South Region and Nordstad) are encouraged to engage voluntarily in strategic planning though informal forms of inter-municipal cooperation (i.e. Conventions Etat-Communes). Intended originally to achieve the strategic objectives laid out in the PDAT, these informal forms of cooperation are often used for strategic cooperation between municipalities on more concrete issues such as parking space management or inter-municipal bicycle lanes and economic activity zones.

Over the past 20 years, a complex spatial planning system has thus developed in Luxembourg in which considerable shifts of political forces can be observed: the system is characterised on the one hand by a much stronger state level that, in a ‘Napoleonic’ tradition of state agency, is increasingly trying to execute planning and thus get a grip on land-use decisions taken at the very local level. On the other hand, there are strong municipalities that are required to completely redraft their formal land-use plans and adapt them to the strategies defined at the national level while at the same time refusing to give up any of their municipal planning sovereignty. This new division of spatial planning power between the local and the national levels has become a source of major and to some extent destabilising conflicts, as the example of the sectoral plans shows. Such conflicts are bound to occur again and again unless it is ensured that participation during the development and implementation of spatial planning tools is taken seriously and that both parties meet on an equal footing.

Alongside the state and municipalities as the most important authorities in terms of spatial planning, it is important to note that state agencies in charge of implementing specific projects have played, and still play, an important role in the practice of planning and development in Luxembourg. This applies most notably to the two major public development funds that were created in order to realise major large-scale urban developments – the “Kirchberg Development and Urbanisation Fund” (Fonds d’Aménagement et Urbanisation de Plateau de Kirchberg, FUAK), created in 1961, and the “Belval Development Fund” (Fonds Belval), created in 2002, which is in charge of steering the development of public sites on the reconversion area of Belval in Esch-sur-Alzette and Sanem. Alongside the two public development funds, there is also Agora: a public-private development fund between the state and Arcelor/Mittal, whose objective is the reconversion of brownfield sites on the border between Esch-sur-Alzette and Sanem (Esch/Belval) and Esch-sur-Alzette and Schifflange (Alzette Quarter). The two public funds as well as the public-private fund were not only essential for the financing and implementation of development, but also became operational in spatial planning terms, thus taking over major responsibilities which were actually in the hands of the municipalities. The related tension has caused a range of conflicts between the two levels of governance, state and local.

The most important national spatial planning instruments in Luxembourg are as follows:

• Master Programme for Spatial Planning (Programme Directeur d’Aménagement du Territoire, PDAT): The PDAT, prescribed in the new spatial planning law of 1999 and published in 2003, is the overarching strategic framework document regarding sustainable territorial development for national and local authorities. The principles, policy objectives and measures defined in the master programme will be put into practice through sectoral master plans and land use plans, for example. Integrative in its nature, the programme develops synergies between urban and rural development, transport and telecommunications and the environment. The PDAT stipulates the principle of deconcentrated concentration (déconcentration concentrée) as the key guiding principle of regional planning. In other words, it establishes the concentration of settlement development and infrastructure expansion in selected cities and municipalities according to different levels of centrality. By promoting such “Regional development centres” (Centres de développement et d'attraction, CDA) – cities and towns with a high degree of centrality – or by preventing the development of areas in places not classified as CDAs, a balanced development of all parts of the country should be ensured. At the same time the demographic and economic dominance of the capital is to be balanced out. The revision process for updating the current masterplan was officially launched in 2016. Between 2017 and 2019, a broad participatory process involving local politicians, NGOs, civil society and cross-border workers was conducted. The process consisted of four regional workshops with a total of almost 200 participants, in particular through the methodology of ‘collaborative change making’. Four regional laboratories were organized across the country, involving a total of almost 200 participants. So far, no draft version of the new master plan has been published.
• Integrated Traffic and Territorial Development Concept (Integratives Verkehrs- und Landesplanungskonzept, IVL): Completed in 2004, this development concept, as an insightful scientific analysis and non-binding medium-term strategy paper, has had a lasting impact on the planning debates and planning decisions in Luxembourg up to the present day. The IVL consists of a detailed analysis of the situation, and various scenarios for the expected development of the residential population and cross-border commuter flows up to 2020 were developed depending on the development of new jobs and residential construction activity. In the sense of ‘deconcentrated concentration’, the development concept defined 39 ‘IVL communities’ along the main settlement axes. These IVL communities are important in terms of urban development mainly because they have good transport connections and infrastructure (retail, schools, hospitals, etc.). The figures in the IVL regarding population growth as well as the growth of cross-border commuter flows became outdated rather quickly due to the substantial demographic growth in Luxembourg in the past 20 years. There are currently no plans to revise the IVL.
• Primary sectoral master plans (PS primaires – plans directeurs sectoriels primaires): The four primary sectoral plans (mobility, large landscape ensembles, economic activity zones and housing) can be seen as the future central regulatory instruments for spatial planning in Luxembourg. At present, they are still in the process of being adopted after a first draft of the plans was pulled from the law-making process. After the sectoral plans have come into force, they will comprehensively and bindingly allow for the implementation of the objectives of the PDAT.
• Secondary sectoral master plans (PS secondaires – plans directeurs sectoriels secondaires): Besides the primary sectoral plans, a series of secondary sectoral plans focusing on the territorial integration of particular infrastructures such as secondary schools, landfills and stations for public networks and mobile telecommunications were adopted between 2005 and 2006.
• Land-use plans (plans d’occupation du sol, POS): POSs include detailed land use provisions for areas of national importance such as for the national airport, military sites or refugee care structures. The POS de facto overrides municipal planning autonomy, as the national level takes over the planning sovereignty for these particular areas. The plans and regulations prepared by the national level thus replace the municipal land-use and building plans in those respective areas.

• The municipal level is actually the only level in Luxembourg that provides legally binding plans for urban development – plans that become effective to concretely steer planning and building activities. Comparable to the situation in many other if not all European countries, we can distinguish between general land use plans on the one hand and particular building plans on the other. Municipal land-use plans (Plan d’aménagement general, PAG) determine the general direction of development (built-up versus open spaces) and also allocate certain land uses, such as lots reserved for housing purposes, areas for public use, office and mixed-use areas and the like. Municipal zoning plans (Plan d’aménagement particulier, PAP) contain detailed land use provisions for the use, protection and the design of larger plots of land or series of plots. They also prescribe features of the single buildings to be developed, such as their height, floor space and plot ratio. There are two different types of PAP in common use: PAPs for existing neighbourhoods (PAP quartier existant) and PAPs for new neighbourhoods (PAP quartier nouveau). According to the local building regulations (Règlement des Bâtisses), planning permission is required for the new construction, demolition and expansion of buildings. The application is usually submitted to the mayor’s office.
• Quite different from the large majority of other countries, the establishment of land use plans (both PAG and PAP) in Luxembourg is an activity that is not necessarily the responsibility of the municipality alone, but can be delegated to a planning consultancy or even to a private investor; in the latter case, the investor or developer is then obliged to engage expertise from a planning consultancy in order to ensure that the plan conforms to the usual requirements. This situation should probably be seen against the background of the limited size of the communes in the Grand Duchy, whose planning capacity is often limited. In this context, private engagement may make sense, and it is also in line with the country’s liberal approach to economic development. However, it can also be problematic when the various powers between private and public interests are unequally distributed and the vested interest of development and profit maximisation cannot be entirely limited throughout the planning process.

1. Large-scale projects: Urban planning trajectories in Luxembourg accelerated in the early 1960s with the urban extension of the 365-hectare European quarter and banking district of Kirchberg, which is part of Luxembourg City. Kirchberg was the first and biggest in a series of large-scale projects pursued by the city and country to make space for the service industries and the European institutions in particular. This tendency to favour big projects, of which the new, EUR 1 bn university campus/science district in Esch-Belval is the most recent incarnation, became quite popular in Luxembourg: it promises to offer space for development, and in doing so, also allows for some experimentation with state-led financing and implementation. However, it also faces a range of problems, such as a dominance of office space, a related lack of urban integration, and high risks in relation to financing and implementation. Moreover, these projects are often placed in the fragmented, intricate environment of urban policy, characterised by small towns and municipalities and limited public planning capabilities on the part of local authorities. Finally, this specific ‘exceptional urbanism’ of Luxembourg unfolds a path dependency which seems difficult to modify in the short- or mid-term.
2. A negotiative approach to planning: Land planning and urbanism in Luxembourg is first and foremost an activity that has made strong growth and economic development possible. However, exorbitant land prices and rents can be considered a downside of the country’s successful economic transition: land is scarce in absolute (the size of the Grand Duchy) and relative terms (the cycles in which lots are brought to the market), which has seen property become an important asset for both corporate and private actors. Landowners and developers are well positioned in the development process, while public institutions such as the municipalities do not have sufficient land resources to counteract them; often they also lack the power to determine land use and urban planning goals in the development process. As private corporations can also commission a planning consultancy to draw up land use plans on behalf of developers’ interests, municipal goals and strategies – to the extent that they even exist – can be difficult to assert. In such a negotiative setting, the scarcity of land and housing tends to be cultivated rather than to happen by coincidence. This could only be overcome by the development of a public policy for property and a higher weighting given to common rather than private interests.
3. Spatial planning by event: A most recent trend of urban and spatial planning practice in Luxembourg is the organisation of temporary events and competitive processes, not only in architecture and urban design terms, but also as concerns planning and environmental visioning. By pursuing such measures, the government seeks to obtain inspiration for orienting spatial development in the future. These measures include the potential organisation of an International Building Exhibition (in its initially German blueprint called Internationale Bauausstellung) in the southern region of the country, the international competition for development proposals under the umbrella concept Luxembourg in Transition, and also the reformulation of the country’s main planning guideline Programme Directeur Aménagement du Territoire (PDAT). These activities may also bring a certain sense of strategic orientation to Luxembourg’s planning system, whose most recent strategic document was the Integrated Concept for Transport and Regional Planning (IVL) from 2004. While not providing any binding means for spatial planning (which exist at municipal level only), these concepts would however be challenged by the rather piecemeal planning and land development practice that has existed hitherto.
4. Intermunicipal collaboration: After 2005, several informal partnership agreements for the promotion of integrated and sustainable urban development between the state and municipalities in key functional urban areas – so-called conventions – were put in place. The elaboration of these innovative planning instruments was guided by three main factors: (a) the realisation that without national control the competition between municipalities for business locations and construction projects in the context of nationwide demographic and economic development pressures, which have been ongoing since the 1990s, would lead to increasingly negative consequences; (b) the explicit requirement stipulated within the PDAT, published in 2003, for consistent intermunicipal cooperation as a key instrument for achieving national spatial planning goals; and (c) the desire to transfer the European urban policy approaches of integrated urban development and multi-level territorial governance to Luxembourg. Complementary to existing formal planning instruments, conventions were designed to encourage a more dynamic and flexible planning approach based on dialogue and the development of concrete projects. They consisted of an exchange of experience and knowledge at intermunicipal, inter-ministerial and multidisciplinary level, thus contributing to the emergence of a more participatory planning culture. The results of the process were rather mixed: apart from some minor but concrete pilot projects, the conventions did indeed produce some intermunicipal and regional development strategies such as the Nordstad Master Plan, the Uelzechtdall Mission Statement, the DICI Integrated Development Plan or even the Concept directeur du Sud. The development, however, was for the most part laborious and slow and the implementation far from consistent. The experience shows, firstly, that a collaborative multi-level governance culture cannot be prescribed in a top-down manner but has to grow incrementally. Second, it is a highly conflict-prone approach, which in a setting influenced by decades of consensus politics, leads to substantial frictions that even money cannot resolve. Even though almost all conventions expired by 2019, intermunicipal cooperation is still considered an indispensable tool in Luxembourg’s spatial planning system. In the future, new, integrated forms of intermunicipal cooperation are foreseen, for instance for Agglolux, the larger functional area around the capital city.