When judges in Luxembourg issued their decision on Denmark’s so-called ghetto law this December, they were not dissecting an abstract legal formula. The stakes were concrete: lease contracts, monthly bills, apartment stability, and whether thousands of families in Copenhagen can continue to afford a roof over their heads.
On 18 December 2025, the Court of Justice of the European Union issued a preliminary ruling that Denmark’s policy requiring the reduction of social housing in districts with a “majority of non-Western residents” may constitute unlawful ethnic discrimination. The final word rests with the Eastern High Court of Denmark, but the EU court’s interpretation is binding — and it undermines the legal foundation of Denmark’s “no ghettos by 2030” strategy.
How Denmark’s parallel-societies law worked
In 2018, Denmark adopted a legislative package targeting so-called parallel societies. Official terminology spoke about “transformation areas,” but in political debate the concept quickly became known simply as the ghetto law. Districts were listed if they met several conditions at once: high unemployment, low income, elevated crime, weak educational outcomes — and critically, more than 50 percent residents of “non-Western origin.”
For neighbourhoods on that list, the state required that the share of social housing be reduced to a maximum of 40 percent by 2030. Municipalities could achieve this through demolition, the sale of social-housing blocks to private investors, or conversion into higher-priced stock. In practice, people were displaced, buildings were demolished or sold, and a meaningful share of social housing in Denmark’s biggest cities was pushed into redevelopment pipelines.
The scale was significant. Thousands of residents in Copenhagen, Aarhus and Odense have been directly affected. In Mjølnerparken in Nørrebro — the best-known example — more than 1,000 residents have already been relocated or face losing their apartments.
What the EU court said
The Court examined the Danish law under the Race Equality Directive (2000/43/EC), which prohibits discrimination in access to housing. Three findings stood out.
First, categorising residents as “Western” and “non-Western” is not a neutral sociological label but a proxy for ethnic origin. When a housing policy isolates areas with a majority of “non-Western” residents for harsher demolition and relocation, it falls squarely within the Directive’s scope.
Second, the obligation to reduce the share of social housing in those districts to a maximum of 40 percent by 2030 produces inferior conditions specifically for tenants who happen to live in the “wrong” demographic district — even if their income, employment or behaviour is identical to tenants in other low-income neighbourhoods. That looks like direct or, at minimum, indirect discrimination.
Third, the Court acknowledged that combating segregation or crime may constitute a legitimate public-policy aim. But legitimacy does not excuse measures that systematically harm ethnic minorities when less destructive instruments could have been used. It is now for Danish judges to assess whether demolition, forced relocation and asset sales were truly the only viable tools.
The price of relocation in Copenhagen
In today’s Copenhagen rental market, a room in a shared apartment now costs 4,000–6,000 Danish kroner per month, which at 1 DKK ≈ €0.1337 translates to roughly €535–€800. A small studio or one-bedroom unit runs at 8,000–10,000 DKK, or €1,070–€1,340 a month. Two- or three-room apartments typically cost 13,000–15,000 DKK, equal to €1,740–€2,005, while larger homes start at 16,000 DKK, exceeding €2,130 per month.
By contrast, analysts estimate that a standard two-bedroom apartment in central Copenhagen with total monthly housing costs (rent plus utilities) can reach 18,000–25,000 DKK — roughly €2,410–€3,340. In regional cities such as Odense, Aalborg or Aarhus, two-bedroom units can easily reach around €1,150 per month, still far from trivial relative to local wages.
Social housing in areas like Mjølnerparken traditionally offered lower rents and more secure leasing than the private market. While numbers vary across housing associations, the gap between a former social-housing rent and a new private lease after redevelopment can run into several thousand kroner — €300–€500 per month for a family. That is a difference many households simply cannot absorb.
When the state mandates a reduction in social housing, families either chase scarce affordable apartments in an overheated city or accept relocation to peripheral areas where housing costs are lower but jobs and services are weaker.
Anti-ghetto urbanism and the economics of land
For Danish policymakers the logic was simple: Denmark should be “one united society,” and neighbourhoods with low-income migrant concentration must be broken up. The “no ghettos by 2030” strategy explicitly required both resident relocation and the sale of municipal housing assets to private developers, who gained access to central-city land for redevelopment.
For investors, the incentives were clear. Demolition and renewal in downtown Copenhagen opens access to plots where monthly rents can exceed €2,000 for family apartments, and where housing scarcity is structural. But the EU judgment abruptly raises a question: were some of those investment cases built on legal provisions now viewed as discriminatory?
Legal advisers are already warning that if Danish courts strike down the provisions, liability may not fall solely on the state. Municipalities and private partners involved in housing disposals or redevelopment could face claims — ranging from compensation for displaced families to challenges of past asset-sale decisions.
What this means for Europe
Denmark is not alone. The Netherlands has enforced the Rotterdamwet for more than a decade — a law restricting settlement in certain districts by households with low incomes, many of them migrant. France and Belgium also experiment with social-mix obligations in suburbs, while Sweden debates dispersal policies for immigrant-heavy districts.
The EU court has now drawn a sharper legal boundary. Using income, employment or crime statistics as a basis for targeted housing policy may pass proportionality tests if carefully justified. Using ethnicity — directly or through obvious proxy indicators — now carries a much higher risk of being found incompatible with EU law.
Governments must therefore adjust both rhetoric and math. Every commitment to reduce social-housing shares, every redevelopment plan in migrant-concentrated areas, now requires a non-discrimination test. And rental-market economics — rent levels, income thresholds, compensation mechanisms — will matter as much as the stated policy goals.
The Bottom Line
Denmark’s ghetto law illustrates that housing policy has moved far beyond the realm of construction targets. It has become a contest over who may stay in the city — and at what price — when Copenhagen rents range from €500–€800 for a single room to €3,000 or more for family apartments in the core, and when social housing is often the only barrier preventing low-income households from exclusion.
The preliminary ruling does not automatically restore demolished blocks, nor does it send displaced tenants back to their old homes. But it attaches a price to political choices that attempted to bury ethnic criteria beneath bureaucratic language. Any European government aiming to rebalance districts via forced reductions in social housing will now have to account not just for square metres, but also for legal exposure, compensation risk and the long-term social cost imposed on residents already struggling in some of Europe’s most expensive rental markets.
