The social housing secret: how Vienna became the world’s most livable city
This article is more than 2 years old
In the Austrian capital, renters pay a third of what their counterparts do in London, Paris or Dublin. How is it possible?
Philip Oltermann
Wed 10 Jan 2024 10.00 GMT
The first place that Max Schranz moved into after leaving his family home is the kind that many young professionals dream of inhabiting at the peak of their career. At only 26, he lives in a bright fifth-floor apartment with high ceilings overlooking a European capital city, 10 minutes from the central station and within walking distance of cinemas, theatres and bars.
No lottery win or parental trust fund was needed to make that dream a reality: Schranz, who is a master’s student, pays €596 (£512) a month for his 54 sq metre two-bedroom apartment – a fraction of typical rents for similarly sized and similarly located apartments in other major European cities. What’s more, he didn’t have to put down a deposit and his rental contract is unlimited – in theory, he’s allowed to pass it on to his children or a sibling when he eventually decides to move on. “I’m aware it’s a pretty stress-free existence,” Schranz says. “My friends in other European cities are a bit jealous.”
Welcome to Vienna, the city that may have cracked the code of how to keep inner-city housing affordable. As other cities battle spiralling rental prices, partly fuelled by inner-city apartments being used as short-term holiday rentals or being kept strategically vacant by property speculators, the Austrian capital bucks the trend. In the place that last year retained its crown as the world’s most livable city in the Economist’s annual index, Vienna’s renters on average pay roughly a third of their counterparts in London, Paris or Dublin, according to a recent study by the accounting firm Deloitte.
Part of the reason Schranz’s apartment is so affordable is simple: it’s owned by the city. In Vienna, that is (almost) the norm. The landlord of approximately 220,000 socially rented apartments, it is the largest home-owning city in Europe (in London, which has more than 800,000 socially rented apartments, they are owned by the local councils). A quarter of the people who live in Vienna are social tenants – if you also include the approximately 200,000 co-operative dwellings built with municipal subsidies, it’s more than half the population.
Many of these apartments came into being a century ago, as part of an enormously ambitious building programme after the end of the first world war, when Vienna was awash with people uprooted by the collapse of the Habsburg empire. Funded primarily through a hypothecated tax on luxuries such as champagne or horse-riding, the inaugural phase of socialist-governed “Red Vienna” saw 65,000 socially rented apartments shoot up within the city by the time of the Nazi coup attempt in 1934.
These “superblocks” from the 20s and 30s don’t look like ordinary social housing. With the modernist ideals of the contemporaneous Bauhaus school yet to capture the imagination of Austrian architects, for one, they haven’t got flat roofs. The most famous examples of Red Vienna social housing, such as the Karl Marx-Hof in the 19th district or the estates dotted along the “Ring Road of the Proletariat” on Margaretengürtel, look more like castles or monasteries, with art deco flourishes on their facades. As the historian Eve Blau has put it: “If you’re planning something radical, it’s not a bad idea to come across as conservative as possible.”
The inner courtyard of Karl Marx-Hof.
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Karl Marx-Hof, the most famous example of ‘Red Vienna’ architecture. Photograph: B O’Kane/Alamy
The majority of Vienna’s council estates were built after the second world and look more familiar, but even they don’t tend to have the stigma of poverty and crime associated with similar developments in the US or Europe. Schranz’s apartment is inside the Theodor Körner-Hof, a 50s-built group of 14 housing blocks in the Margareten district that are far from fancy, yet still well-maintained enough that Schranz likes to hang out in the green inner courtyards on summer evenings to read his books.
The Viennese term for estates like these is Gemeindebauten, “communal buildings”, which hints at their underlying philosophy. “One of the key concepts to understanding Vienna’s approach to housing is social sustainability,” says Maik Novotny, an architecture critic for the Austrian newspaper Der Standard. “In order to avoid the creation of ghettoes and the costly social conflicts that come with them, the city actively strives for a mixing of people from different backgrounds and on different incomes in the same estates. Social housing isn’t just for the poor.”
As a student without a disability or any dependants, Schranz would have no hope of applying for social housing in countries such as the UK, but in Vienna the city courted him via a programme for first-time tenants under 30.
A doorway with arch above.
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An entrance at the Theodor-Körner-Hof. Photograph: Fabian Weiss/The Guardian
“Keeping a mix of people from different paths of life in social housing is key, and yes, it isn’t always easy,” says Kathrin Gaal, Vienna’s deputy mayor and executive councillor for housing. One tactic is an income maximum for applicants of €57,600 a year for single people and €85,830 for two-person households. But “once you’ve moved into a Gemeindebau as a young student, if you start earning more once your career progresses, we don’t check in on you, because your situation could also worsen again,” says Gaal.
Vienna’s social housing programme is more than a policy – in the city it is a foundational ideal that is a source of immense pride. And as with similar progressive achievements that command a political consensus – the UK’s National Health Service, say, or Norway’s oil fund – that can create blindspots in the national debate. Talk to Gemeindebau residents such as 76-year-old Heinz Barnerth, a retired mechanical engineer who has lived for the past seven decades in the Reumannhof estate in Margareten, and he will be unswerving in his praise of the idea that brought his block into existence in the 1920s. “Vienna’s model is more timely than ever, because rental prices are hard to contain,” he says.
But the reality doesn’t always live up to the ideal, and Barnerth is even more animated when complaining about the time it takes the city to carry out repairs in his estate. The light by the stairs leading to the basement hasn’t been working for three weeks, and when a door lock breaks, the residents usually don’t bother waiting for central management to fix it. “If you don’t sort a handyman to repair the lock overnight, the junkies try to break in,” he says. One of the downsides of having a single large company, Wiener Wohnen, in charge of managing and maintaining so much housing stock in the city is that logging and commissioning caretakers’ tasks can lead to bottlenecks.
The other downside of the Vienna model is that while 60% of the city’s residents have hit the jackpot by getting into a Gemeindebau or subsidised co-op, that still excludes a large chunk of the population of a city in which 80% are renters. Only those who have resided permanently in Vienna for two years can apply for social housing, and those who stay in private rentals face problems more familiar from other European cities.
Skyline shot showing Vienna’s many large apartment blocks with a church spire one of the highest buildings in the city.
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The Vienna skyline. Photograph: Michael Brooks/Alamy
“Twenty years ago, private rentals in Vienna were mostly low quality and low price,” says Justin Kadi, an assistant professor in planning and housing at University of Cambridge. “But in recent years, private rentals have transformed into a segment of Vienna’s housing market that is in many cases not just high quality, but also quite expensive.”
This, he explains, was largely due to deregulation in the mid-90s, which allowed landlords to charge tenants not just for size and equipment standards, but also for location, often leading to arbitrary mark-ups. As part of the same reforms, it became easier for landlords to limit contracts, putting private renters in Vienna in a less secure position.
“The only thing that other European cities can learn from Vienna is their marketing,” says Harald Simons, a Berlin-based economist and researcher who published a scathing analysis of the Viennese housing market in 2020. Vienna, Europe’s second-largest German-speaking city, has “an income structure that is more like Berlin’s but average new rental prices similar to those of a high-income city like Hamburg”, Simon says. He criticises Wiener Wohnen for its opaque accounting, suggesting its finances are in direr straits than the Vienna’s senate admits, and that the city’s underspending on maintenance is driving the middle-income earners so desired for the social mix into private rentals.
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And yet, there are good reasons why Vienna’s social housing model has attracted renewed attention and regular visits from international policymakers recently.
Matteotti-Hof in Margareten, which was built between 1926 and 1927.
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Matteotti-Hof in Margareten, which was built between 1926 and 1927. Photograph: Fabian Weiss/The Guardian
The crucial difference is in the trend. While the number of homes in London’s socially rented sector has stayed broadly stable, at about 800,000, for example, its share of the city’s housing stock continues to fall, partly due to them being converted into privately owned homes via the right-to-buy scheme, and in part because of the lack of new homes being built while the UK capital continues to grow. Figures released just before Christmas show that 105,000 households in the UK are trapped in temporary accommodation because of a shortage of social housing. Many cities in continental Europe battle with similar problems: Berlin, for example, having missed its target for 20,000 new homes in 2022, only managed to build about 16,000 last year.
Vienna, by contrast, has the advantage of being in a monopoly position that it has never relinquished. “We never succumbed to the temptation of selling off our municipal or subsidised apartments in the way many other European cities did to plug holes in their budgets,” Gaal says. “It means our stock of housing is still vast.”
About 40 years ago, Vienna started a “land procurement and urban renewal fund” that reserves land in the city exclusively for social housing: it currently has 3m sq metres of space, including farm or fallow land, disused rail tracks and empty hospitals, that it can exclusively put out to tender to social developers. “That kind of systemic stockpiling might be something that other countries could get started on too,” Gaal says.
In 2019, Vienna introduced a new zoning rule that means that in developments with more than 5,000 sq metres of living space, two-thirds must be subsidised housing. “For cities, the question is always whether they have a good bargaining position with land owners,” even Vienna-sceptic Simons concedes. “And Vienna has a good bargaining position.” The city’s land procurement fund coordinates closely with the department that hands out planning permissions, and can strike deals accordingly.
Whether Vienna will reach its target of building 5,500 new Gemeindebau apartments by 2025 remains to be seen, and whether that will be enough if the city is expected to return to its 1910 population levels by 2038 is another question entirely. But it is taking tangible steps. After an 11-year freeze on new social housing developments, the city resumed building new Gemeindebau blocks in 2015, and has earmarked €557m for new developments in 2024. One of the most recent to be completed, by the local architecture firm WUP, lies about 7km east of the city centre in Seestadt Aspern, a new urban centre growing on the site of a former airfield.
Seestadt Aspern, modern 10-storey blocks with small trees and landscaped view looking like a university campus.
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The new urban centre at Seestadt Aspern. Photograph: Bilge Kagan Kaya/Alamy
Margarete Stoklassa, 73, and her husband moved into one of the 74 apartments from an estate in the city centre last April because they needed barrier-free access, and seem more than pleased. At 50 sq metres their new home is not huge, but a circular floorplan and several sliding walls mean that “I sometimes end up playing hide-and-seek with my husband,” says Stoklassa. “I am very happy; everything I need is here.” The couple pay €520 in rent a month.
The facades of the new-era Gemeindebau are painted in chalky reds, blues and greens that reference the mighty fortresses of the Red Vienna period, although with prices of building materials peaking during the construction phase, there is plenty of bare concrete and galvanised steel. “The rise in the cost of raw materials forced us to concentrate on what social housing is really about,” says the architect Bernhard Weinberger. Having prevailed for more than a century, Vienna’s ideals of communal living have shown they can stand the test of time. “This building should still be standing in 200 years,” he says.
This article was amended on 10 January 2024 to correct a caption reference for the date when Matteotti-Hof was built.
The social housing secret: how Vienna became the world’s most livable city
In the Austrian capital, renters pay a third of what their counterparts do in London, Paris or Dublin. How is it possible?
www.theguardian.com
Vienna’s unique, century-old housing model keeps 60% of residents in heavily subsidized or municipal housing, ensuring affordability through a mix of direct ownership and non-profit associations. Key to this approach are high-income eligibility thresholds, widespread rent controls, and a focus on social mix, which together prevent the commodification of housing.
Why Vienna's Housing Model is Different
Massive Public/Subsidized Stock: Roughly 43% of all households live in subsidized housing—either municipally owned (Gemeindebau) or managed by limited-profit housing associations (LPHAs).
Broad Access for the Middle Class: Income limits are set high enough that about 80% of residents qualify for social housing, allowing middle-income families to participate and preventing stigmatization.
Permanent Security and Stability: Once secured, tenants can stay even if their income rises, encouraging long-term residency.
Cost-Based Rents: LPHAs operate on a cost-recovery basis rather than profit maximization, keeping rents significantly lower than the market rate.
Active Land Policy & Competition: The city actively buys land to prevent speculation and runs developer competitions that ensure high-quality design, environmental sustainability, and lower construction costs.
Historical Legacy: A, "Red Vienna" policy, dating back to the 1920s, established a strong, lasting foundation for public housing, with 60% of residents living in such units today.
This model creates a "renters' utopia" that acts as a stabilizer for the entire market, with about 75% of households choosing to rent.
