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On 18 December 2025, the Grand Chamber of the Court of Justice of the EU (CJEU) delivered its judgment in case C-417/23 (Slagelse Almennyttige Boligselskab, Afdeling Schackenborgvænge).  
 

The case arose from a request for a preliminary ruling by the Østre Landsret (High Court of Eastern Denmark) on whether Danish legislation requiring development plans to reduce the proportion of public family housing in designated “transformation areas” is compatible with the prohibition of discrimination on grounds of ethnic origin under Directive 2000/43. The request stemmed from five sets of proceedings relating to housing estates in Ringparken (Slagelse) and Mjølnerparken (Copenhagen), in which tenants contested lease terminations and development plans based, inter alia, on the fact that more than 50% of residents were classified as “immigrants from non-Western countries and their descendants”. The referring court asked whether that classification falls within the concept of “ethnic origin” and whether the national scheme constitutes direct or indirect discrimination within the meaning of Article 2(2) of the Directive.  

The CJEU held that Article 2(2)(a) of Directive 2000/43 must be interpreted as meaning that national legislation requiring the adoption of development plans to reduce the proportion of public family housing in residential areas where more than 50% of residents are “immigrants from non-Western countries and their descendants” may constitute direct discrimination on grounds of ethnic origin. Although nationality and country of birth are neutral criteria taken in isolation, the Court found that the Danish criterion is based on a complex combination of such factors which may, in context, amount to a distinction based on ethnic origin. The decisive role played by that criterion in classifying areas as “transformation areas” can result in less favourable treatment, since all residents of such areas are exposed to an increased risk of lease termination and loss of home compared with residents of similarly disadvantaged areas not meeting the 50% threshold. The Court underlined that it is for the referring court to verify whether the legislation was in fact adopted on the basis of ethnic origin, in which case the burden shifts to the authorities to demonstrate that the scheme is justified by objective factors unrelated to discrimination. 

As regards indirect discrimination under Article 2(2)(b) of Directive 2000/43, the CJEU held that, even in the absence of direct discrimination, Danish legislation may still constitute indirect discrimination if an apparently neutral criterion places persons of certain ethnic origins at a particular disadvantage compared with others. The Court clarified that indirect discrimination may arise even where several ethnic groups are affected, unless the measure is objectively justified by a legitimate aim and complies with the principle of proportionality. While objectives such as social cohesion, integration and public housing policy may, in principle, constitute overriding reasons in the public interest, the measures adopted must be appropriate, necessary and proportionate, and must strike a fair balance with the fundamental right to respect for the home under Article 7 of the Charter of Fundamental Rights of the EU. The Court held that it is for the referring court to verify, in particular, whether the obligation to adopt development plans genuinely and consistently contributes to those objectives, whether less restrictive alternatives exist, and whether the increased risk of lease termination and loss of housing for residents of “transformation areas” leads to disproportionate disadvantages.