Vienna’s Housing Policy: A Renter’s Utopia or Privatization in Disguise? – Analysis by Franz Schellhorn for the “Presse”

Vienna’s housing policy is rightly regarded as a model, but the shadows are hidden: the wrong people often benefit from cheap living in municipal housing.

If Austria becomes a big topic in the US media, that doesn’t bode well. Most of the time it is about brown spots in the FPÖ or other indications that we have allegedly learned nothing from our history. This time it’s exceptionally different: the renowned “New York Times” (“NYT”) devotes a hymn-like report to Vienna’s housing policy entitled: “Imagine a Renter’s Utopia – It Might Look Like Vienna”. While crazy markets would drive renters worldwide into an existential crisis, the Viennese lived in an apartment paradise, as the author believes. And that’s no coincidence: the high level of social housing in “Red Vienna” and strict state regulation ensured that speculators were locked out and rents remained affordable.

So far the analysis is correct. The Viennese housing market is not entirely, but largely, deprived of the free play of supply and demand. Not the market, but politics determines how high the rent is.

Anyone who has a lease in a Viennese municipal or social building usually never loses it again.

Social housing in Vienna can be a real blessing, especially for people with low incomes. But that’s not what the “NYT” likes so much. The special thing about the housing policy of the Viennese SPÖ is that cheap accommodation is not only for the needy. But for almost everyone. “The council housing not only welcomes the poor, but also the middle class,” as the “NYT” enthusiastically shows. The term “middle class” seems to be too short-sighted. The income limit for a community apartment or a subsidized cooperative apartment is currently 53,340 euros net (!) per year for singles. Only two out of ten Viennese earn even more.

Anyone who has a lease in a Viennese municipal or social building usually never loses it again. Not even if life means well with the tenants. Income levels are never checked again, which is why higher earners do not have to pay more than minimum income recipients. That’s the plan, because it’s about as much social mixing as possible, according to the town hall. The fact that on Friday evenings the doctor with the “hackler” from the neighboring apartment in the Karl-Marx-Hof is standing at the grill and philosophizing about everything and everything over a cool beer, probably not even the Viennese city councilor believes.

Here, too, top earners are provided with cheap apartments in the best locations by law, which can be passed on to descendants along with the low rent.

While high and higher earners live in social housing, the needy sometimes wait years for a cheap apartment. The supply is also so small because the council flat is often inherited over several generations. Not because the children and grandchildren are also in need, but because the cheap leases can be passed on within the family. Here, a public good is being privately privatized. Such events usually drive leftists to the barricades, in this case even the New York Times applauds. Although the transfer is illegal in many cases – or does anyone really think that adults will suddenly move back in with grandma? The same is happening in the strictly regulated private “rental market”. Here, too, top earners are provided with affordable apartments in the best locations by law, which can be passed on to descendants along with the low rent. Not at the expense of the general public, but at the expense of private owners.

At the end of the article, the “NYT” is still interested in Peter Pilz. More precisely, for what the long-standing top politician did with all the money he saved in cheap municipal housing. He hasn’t invested a cent in the stock market, he rather enjoys his life, says Pilz cheerfully. At the time of the interview, the former party founder was cycling from Pienza to Montalcino to taste a glass of Brunello there. “When people don’t have to struggle to survive all day, they can focus their energy on much more important things,” he says. A fine analysis, which unfortunately has a flaw: In order to enable Peter Pilz to live comfortably in a cheap apartment, much poorer people than he have to finance this social housing with their taxes and duties.

_{Column by Franz Schellhorn for the “Presse” (05/27/2023).}