Vienna, still affordable but also in need of reforms (Sept 2020)

Vienna, still affordable but also in need of reforms By journalist Linda Osusky, 14 September 2020

Vienna is one of the few metropolis where renting a flat is still quite affordable compared to other European cities. Average rent including operating costs except electricity, gas, internet are 8,42/m2 in 2019. The source is Statistik Austria. Included are also old rent contracts.

The two main reasons for Vienna’s housing market still being quite affordable are municipal social housing with a 100-year-long tradition, and a rental cap for all buildings built before 1945 (and some more which are specified by law).

The city has 30% of municipal social housing, where half a million Viennese live. The city is subsidising another 25% of all flats. Considering the big share of flats in buildings built before 1945, the share of regulated rents comes up to approximately 75%. Thus the free rental market is minimal in comparison to other cities.

Historically, Vienna before 1920 was similar to other global metropolis at that time with miserable housing conditions. If you are interested in history, I strongly recommend the documentation of the journalist and activist of that time Max Winter. His accounts of the social situation in Vienna of the 1920s are very vivid, entertaining and shocking.

Of course rents are on the rise and it is getting more difficult to find affordable housing also in Vienna. Short-term rent is also on the rise as well as proliferation of tourist flats offered via Airbnb & Co. So Vienna and Austria as well need reforms. E.g. there are flaws in the assignment system for getting a flat in a „Gemeindebau“ (as the social housing flats are called). Construction of social housing was reduced during the 1990s because urban planners were expecting the city to shrink. But contrary to this prediction, the fall of communism in neighbouring countries, the violent disintegration of Yugoslavia and the extension of the EU towards the east led to a doubling of inhabitants in almost 20 years. In 2000, Vienna had around 1,2 million inhabitants, today it has 1,9 million.

Fortunately, the city’s reaction to the changing demographics was to intensify construction of social and affordable housing. Big projects, like the „Seestadt Aspern“ (for around 20.000 people) or the former „Nordbahnhof“ area, as well as many other smaller projects, were realised in recent years. This summer, during my visit there, I could witness that the city continues constructing more housing with a lot of activities going on in many parts of the city, but mainly on the periphery.

But the problem of big investors buying up whole buildings with the aim to renovate and make luxury apartments is also appearing, as you can read here. But for the moment such cases do not seem to reflect a major tendency (yet).

Concerning the free (unregulated) market prices raised significantly: 35% between 2008 and 2016. In the same period, income increased by 22%.

Another nice thing are new (experimental) forms of housing projects, where a group of people and families align with architects, city council, experts, etc., and develop their own building. One such project is, where 65 adults and children joined together to build a sustainable house with around 40 flats, shared spaces, a roof terrace, a library, guest flats, etc.

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