Lena Rücker and Alexandra Schantl, KDZ Centre for Public Administration Research Austria
Relevance of the Practice
The provision of adequate and sufficient as well as affordable housing is widely regarded as a public responsibility in Austria, where social housing policy has a long tradition and local governments – urban as well as rural – have long played an active role within the system. In Austrian public debate and in the context of this practice entry, the term ‘social housing’ is understood as encompassing municipal housing as well as object- and subject-based public housing subsidies. The importance of the social housing sector in Austria varies across the nine Länder and its municipalities. The share of municipal housing units in total housing units, for example, amounts to 23 per cent in Vienna but less than 5 per cent in the other Länder. Subsidized housing units, mostly constructed by limited-profit housing cooperatives, are common in all Länder, in cities as well as small municipalities.
The City of Vienna has become the most prominent and an international best-practice example for social housing policy with its inclusive and collaborative approach. Up until today, Vienna directly constructed 220,000 municipal housing units and subsidized another 200,000 units constructed by limit-profit cooperatives, which in total provide living space for almost half (43 per cent) of the city´s population. For the last 100 years, the capital city has also demonstrated the disproportional challenges in the provision of affordable housing for fast-growing metropolises. While this task constitutes a financial burden for communal budgets in general, it usually (and increasingly) weighs heavier for urban municipalities due to the current socio-economic and developmental trends of urbanization and increased heterogeneity of lifestyles and interests. In contrast, especially smaller, rural municipalities often face the difficulty of providing affordable living space while at the same time fighting the trends of depopulation and shrinkage, which could soon make the established infrastructure obsolete.
Over the last decades, Vienna´s public housing sector has undergone significant changes as it faces more diverse trends and pressures. It has developed from a purely public task to a sector with many public and private actors involved. Special models of financing and provision have emerged in order to secure public financing and the safeguarding of the municipal budget. Because of the sectors´ far-reaching significance and particularly the increasing shift towards the involvement of the private sector, the status quo of the practice in Vienna demands critical consideration. The Viennese example is directly relevant to all report sections due to the structure, many actors and instruments of the system, its financial background as well as its participatory approach to the provision of affordable and inclusive high-quality living space.
Description of the Practice
The legal framework for social housing in Austria is characterized by high complexity and numerous provisions and intertwined instruments, whose implementation also varies strongly across the Länder. In general, national legislation such as the Mietrechtsgesetz (MRG, Tenancy Act), the Wohnungseigentumsgesetz (WEG, Law of Condominiums) and in particular the Wohnungsgemeinnützigkeitsgesetz (WGG, Limited Profit Housing Act) forms the legal basis for the practice. The execution of the WGG, which specifies the legal status and responsibilities of non-profit housing associations as well as provisions regarding the financing, allocation of and remuneration for subsidized housing units, falls within the responsibility of the Länder (WGG BGBl. 139/1979). Furthermore, on the legal level of the Länder, the nine Wohnbauförderungsgesetze (housing subsidy acts) contain specific guidelines for all public housing subsidies, encompassing provisions regarding qualitative requirements, eligibility and tariffs for subsidised rental objects as well as loan schemes for for-sale objects. The Wohnbauförderung is a powerful price-regulating political instrument in Austria and not directly tied to the WGG, but its provisions apply to the activities of limited-profit housing cooperatives. Until the 1990s, the social housing sector was primarily a communal task and housing subsidies were financed from communal housing construction taxes. Today, the Länder carry the financial and executive responsibility for this sector. Differences in the regulations between urban and rural local governments within a Land may occur due to implementation and specific provisions of existing local instruments such as the Flächenwidmungsplan and Bebauungsplan (municipal zoning and building codes), e.g. regarding design and quality standards or the required amount of parking spaces.
Vienna has become a widely known example for social housing policy mainly due to its long tradition of the construction of public housing units, rooted in the socialist inter-war period also referred to as ‘Red Vienna’, during which most of the existing stock of municipal housing units was constructed. Until the 1980s, the City of Vienna itself was very active in the construction of municipal housing units, creating a stock of approximately 220,000 housing units in public ownership, which amounts to almost one fourth of the city´s total housing stock. Today, municipal housing units are managed and maintained in direct public management through Wiener Wohnen, an enterprise of the City of Vienna and legally part of the city administration (Magistratsabteilung 17).
Over the last 40 years, Vienna has increasingly outsourced the tasks of constructing and managing affordable housing units to other public and private actors. The city offers subsidies for the construction of affordable housing units to limited-profit and commercial developers and also provides direct financial assistance to tenants (Wohnbeihilfe), both funded through a mix of federal and state taxes. The Wohnbeihilfe is an instrument of the Länder, which Vienna administers in its dual function as city-state. Approximately 51 per cent of the annual public subsidies in the area of affordable housing in Vienna are directed towards the construction of new buildings, 38 per cent towards the refurbishment of the existing stock and 11 per cent towards subject-based subsidies directly reducing the rent for eligible tenants. Up until today, more than 200,000 housing units were created mainly through public subsidies.
Limited or non-profit housing cooperatives (Gemeinnützige Bauvereinigungen (GBV)) have long been central actors in the Viennese system of social housing. They operate as private enterprises (as cooperativesor corporations) but are subject to the Wohnungsgemeinnützigkeitsgesetz (WGG). The WGG stipulates the limited profitability of the cooperatives and that they, in contrast to private developers, must re-invest any excess capital in affordable housing units. In turn, they are granted significant tax advantages. GBVs play a significant role for social housing in all of Austria. In total, they constructed and maintain more than 950,000 housing units, one fourth of which are located in Vienna.
However, despite the efforts, GBV President Karl Wurm estimates that there is still an annual lack of approximately 7,000 new affordable housing units in Vienna. Therefore, in order to satisfy the demand of a growing urban population, the city incorporates commercial, for-profit actors in the provision of affordable housing since the 1990s. These developers have increasingly been receiving subsidies for the construction of new units, but in contrast to limited-profit cooperatives, are only bound to rent limits until the received subsidies have been repaid (typically 10-15 years). Another Viennese approach for the inclusion of private capital in the provision of affordable housing was the introduction of a new spatial classification category, ‘social housing’, which was added to the municipal building code in 2019. It sets out that all projects with more than 5,000 m2 living area on plots reallocated to building land are subject to long-term rent control for two thirds of the total units.
New housing projects that are either to be constructed on municipal land or with the support of public subsidies are initiated through public competitions, so-called Bauträgerwettbewerbe. These competitions aim at the creation of socially and ecologically sustainable and innovative housing units and are often oriented along one particular theme (e.g. intergenerational or cultural housing, wooden construction etc.). All limited-profit and commercial developers are eligible to submit designs, which are then evaluated by an interdisciplinary expert panel as well as municipal representatives.
For more than two thirds of the population in Austria´s largest cities, the capitals of the Länder, renting is the preferred form of accommodation. Furthermore, more than half of these urban dwellers rent from either limited-profit cooperatives (23 per cent) or municipal housing (16 per cent). The share of tenants in the rest, and predominantly rural areas, of Austria is only around 26 per cent. However, while private homeownership is the most common form in more rural areas, limited-profit cooperatives are the main type of landlords in the rental segments of medium and small size municipalities.
Vienna is a standalone example in Austria due to the extent of the city´s activities in the area of social housing. But in the past, other Austrian cities and municipalities have too been active in the construction of municipal housing units and, like the capital, shifted their focus towards the subsidization of limited-profit and commercial actors in recent years. In contrast to the capital city, which still directly manages and maintains the municipal housing stock, delegated management of the formerly municipal units through GBVs is more common in small and medium-sized cities due to their more limited administrative capacities.
In general, there is a higher demand for affordable housing units in urban areas with typically higher rent levels than in rural areas, therefore these municipalities inherently face bigger pressure to provide affordable living space. They also need to take into consideration more complex quality aspects and heterogeneous needs, thus public competitions setting out specific requirements for subsidized projects are more common in larger municipalities. Furthermore, differences between the Länder as well as urban and rural municipalities occur particularly due to the respective implementation of the instrument Wohnbauförderung. Among others, this instrument pursues environmental policy objectives such as increasing and ensuring the thermal quality and energy efficiency of existing and new buildings. But while several existing strategies aim to curb Austria´s high land consumption (approx. 13 ha/day of which 4.5 are building land), the current legal provisions of the Wohnbauförderung in most Länder appear to mainly increase current ecological issues. Most Länder heavily subsidize land-intensive single-family homes and the construction of excessive parking lots. Due to the differences in the availability of building land and settlement patterns, this issue fuels urban sprawl and disproportionally affects rural rather than urban municipalities.
Assessment of the Practice
Similar to Sweden and the Netherlands, and in contrast to Great Britain and Germany, Austria has a large limited-profit housing sector. In general, the Austrian approach does achieve its most explicit objective, the creation of affordable housing units. Subject and object-based subsidies are widely accessible and particularly the latter is estimated to have had significant curbing impact on the overall development of housing cost in Austria´s municipalities, often making Austria an international best-practice example.
The country´s international reputation in this area is rooted primarily in the long tradition of social housing in the City of Vienna. However, from today´s perspective it must be questioned whether the current Austrian (and particularly Viennese) system of the provision of affordable housing can still live up to its reputation. In the last decades, municipalities have widely withdrawn as developers while private actors now dominate the activities in this segment. Current trends indicate increased activities of commercial actors in the subsidized housing sector in the future, a development that is contrary to the former socialist ideal of Red Vienna, a city providing inclusive and high-quality living space to all its citizens. This raises the question of whether we are still talking about the same ‘Viennese model of social housing’ and whether the current system is able to take into account processes and dynamics within the market and the society.
All large urban areas in Austria face a shortage in affordable housing units, which is steadily increased by rising rent levels. Out of socialist tradition, Viennese municipal housing units are spread across all city districts and, due to high income thresholds, are available to large segments of the population. Both these factors have long ensured a certain socio-economic diversity of the inhabitants of municipal housing units. But in recent years, Vienna has experienced a trend of differentiation between dwellers of municipal housing and subsidized housing units. Increasingly, those municipal and subsidized housing units characterized by older building fabric and located in less central areas of the city are inhabited by lower income households. Meanwhile, middle to upper income households inhabit the more modern or centrally located municipal and subsidized housing units. This process can to some extent be explained with the common entry barriers to subsidized housing units constructed by limited-profit cooperatives: In order to rent (or buy) such an apartment (at reduced rent), tenants must make an up-front financial contribution to the construction costs (Finanzierungsbeitrag). In contrast, there are no financial entry barriers to municipal housing units, which are accessible to the lowest income groups and assigned through waiting lists. This trend indicates that the city´s most recent activities are not sufficient to ensure inclusivity and prevent the increased displacement of low-income groups. Another factor not to be underestimated in this context is the prevalence and influence of Airbnb on local housing markets, which in Vienna also affects municipal and subsidized housing, whereby their subletting in principle is not permitted. Subletting a municipal flat is expressly forbidden accordingly to the tenancy agreements. Failure to do so may result in termination. The same applies to cooperative flats: The termination provisions of the Tenancy Act and the Limited Profit Housing Act clearly state that the landlord may terminate a tenancy agreement if the tenant lease/sublet his flat entirely. However, in both cases ‘in its entirety’ applies. Subletting individual rooms is not prohibited.
In general, public expenses for social housing in Vienna (in all three categories, construction, rehabilitation and subject-based subsidies) have steadily decreased over the last years. At the same time, subsidized housing projects have become more expensive mainly due to the Bauträgerwettbewerbe, which aim at ensuring the quality and social and ecological sustainability of large-scale housing projects but also drive up the additional costs in construction. These costs in turn increase the required Finanzierungsbeiträge for modern subsidized housing units, making them less available to low-income households. Recognizing the growing challenges, the City of Vienna has decided to take back on the task of directly constructing municipal housing units in 2015 (Gemeindewohnung Neu). Since 2020, around 3,700 new municipal flats are being implemented, one third of which are ‘SMART’ units, geared towards the demand for more compact and affordable units. The new municipal housing units will be offered at the same rent levels as the existing municipal and subsidized units (7.5 Euro/m2) and without the precondition of own capital for Finanzierungsbeiträge.
References to Scientific and Non-Scientific Publications
Limited Profit Housing Act (WGG, Wohnungsgemeinnützigkeitsgesetz), BGBl. no 139/1979
Scientific and Non-Scientific Publications:
Brunnauer A, Neuhaus M, Josef F and Weber C, ‘Soziale Wohnungswirtschaft in Österreich. Gemeindebau, Gemeinnützigkeit und Wohnraumförderung‘ (FGW- Forschungsgesellschaft für Wohnen, Bauen und Planen 2019)
Gemeinnützige Bauvereinigungen Wien (GBV), ‘Mehr Geförderter Wohnbau durch neue Widmungskategorie‘ (GBV, 7 December 2020) <https://www.gbv-aktuell.at/wien/news/817-mehr-gefoerderter-wohnbau-durch-neue-widmungskategorie>
Hochholdinger N, Matlschweiger V, Schantl A and Seisenbacher M, ‘Public Value des sozialen Wohnbaus. Der Beitrag des sozialen Wohnbaus zum gesellschaftlichen und sozialen Zusammenhalt in Wien’ (KDZ on behalf of Wiener Wohnen Kundenservice GmbH 2019)
Kössl G, ‘Mieten in den Landeshauptstädten Österreichs’ (research brief, GBV 2020)
Ludwig M, ‘Das Wiener Modell – der soziale Wohnungsbau in Wien’ in Bund deutscher Baumeister, Architekten und Ingenieure (eds), Jahrbuch 2017 mit Sachverständigenverzeichnis (BDB 2017)
Mundt A, Komendantova N and Amann W, ‘Berichtsstandard Wohnbauförderung 2018‘ (IIBW, on behalf of Land Wien, Magistratsabteilung 50. IIBW 2018)
Putschögl M, ‘Zu viele große, teure Wohnungen in Wien’ (Der Standard, 6 June 2018) <https://www.derstandard.at/story/2000081022212/zuviele-grosse-teure-wohnungen-in-wien>
—— ‘Immer weniger geförderte Wohnungen in Wien’ (Der Standard, 8 October 2020) <https://www.derstandard.at/story/2000120572617/immer-weniger-gefoerderte-wohnungen-in-wien>
Tamesberger D, Bacher J and Stöger H, ‘Sozialer Wohnbau als Garant für günstigen Wohnraum‘ (A&W Blog, 28 February 2020) <https://awblog.at/sozialer-wohnbau-guenstiger-wohnraum/>
Wohnservice Wien (ed), ‘Wohnberatung Wien: Alle Informationen über den sozialen Wohnbau‘, (10th edn, 2021) <https://wohnberatung-wien.at/fileadmin/user_upload/Wohnberatung_Wien_Broschuere_Web.pdf>
Wurm K, ‘Wohnbaugenossenschaften & gemeinnütziger Wohnbau in Österreich Teil 1‘ (interview, ‘Geno schafft‘ blog, 6 May 2019) <https://www.wu.ac.at/ricc/geno-schafft/aktuelle-blogbeitraege/detail/wohnbaugenossenschaften-gemeinnuetziger-wohnbau-in-oesterreich-teil-1>
 Dennis Tamesberger, Johann Bacher and Harald Stöger, ‘Sozialer Wohnbau als Garant für günstigen Wohnraum‘ (A&W Blog, 28 February 2020) <https://awblog.at/sozialer-wohnbau-guenstiger-wohnraum/>.
 Nikola Hochholdinger and others, ‘Public Value des sozialen Wohnbaus. Der Beitrag des sozialen Wohnbaus zum gesellschaftlichen und sozialen Zusammenhalt in Wien’ (KDZ on behalf of Wiener Wohnen Kundenservice GmbH 2019); Michael Ludwig, ‘Das Wiener Modell – der soziale Wohnungsbau in Wien’ in Bund deutscher Baumeister, Architekten und Ingenieure (eds), Jahrbuch 2017 mit Sachverständigenverzeichnis (BDB 2017) 1.
 Anna Brunnauer, Markus Neuhaus, Felix Josef and Christoph Weber, ‘Soziale Wohnungswirtschaft in Österreich. Gemeindebau, Gemeinnützigkeit und Wohnraumförderung‘ (FGW- Forschungsgesellschaft für Wohnen, Bauen und Planen 2019) 16.
 Ludwig, ‘Das Wiener Modell‘, above, 1.
 ibid 6.
 Wohnservice Wien (ed), ‘Wohnberatung Wien: Alle Informationen über den sozialen Wohnbau‘ (10th edn, 2021) <https://wohnberatung-wien.at/fileadmin/user_upload/Wohnberatung_Wien_Broschuere_Web.pdf> 11 accessed 26 July 2021
 Ludwig, ‘Das Wiener Modell‘, above, 9.
 Martin Putschögl, ‘Zu viele große, teure Wohnungen in Wien’ (Der Standard, 6 June 2018) <https://www.derstandard.at/story/2000081022212/zuviele-grosse-teure-wohnungen-in-wien>.
 Karl Wurm, ‘Wohnbaugenossenschaften & gemeinnütziger Wohnbau in Österreich Teil 1‘ (interview, ‘Geno schafft‘ blog WU Forschungsinstitut für Kooperationen und Genossenschaften, 6 May 2019) <https://www.wu.ac.at/ricc/geno-schafft/aktuelle-blogbeitraege/detail/wohnbaugenossenschaften-gemeinnuetziger-wohnbau-in-oesterreich-teil-1>.
 Gemeinnützige Bauvereinigungen Wien (GBV), ‘Mehr Geförderter Wohnbau durch neue Widmungskategorie‘ (GBV, 7 December 2020) <https://www.gbv-aktuell.at/wien/news/817-mehr-gefoerderter-wohnbau-durch-neue-widmungskategorie>.
 See ‘Bauträger-wettbewerbe‘ (Wohnservice Wien, undated) <https://wohnservice-wien.at/wohnen/kommunaler-wohnbau/bautraegerwettbewerbe> accessed 26 July 2021.
 Gerald Kössl, ‘Mieten in den Landeshauptstädten Österreichs’ (research brief, GBV 2020) 1.
 Alexis Mundt and others, ‘Berichtsstandard Wohnbauförderung 2018‘ (IIBW, on behalf of Land Wien, Magistratsabteilung 50. IIBW 2018) 37.
 ibid 5.
 Martin Putschögl, ‘Immer weniger geförderte Wohnungen in Wien’ (Der Standard, 8 October 2020) <https://www.derstandard.at/story/2000120572617/immer-weniger-gefoerderte-wohnungen-in-wien>.
 The first project with 120 ‘Gemeindewohnungen NEU’ in Vienna’s 10th district was already handed over to its residents at the beginning of November 2019.
 Wohnservice Wien (ed), ‘Wohnberatung Wien’, above, 15.