It Means Nothing To Me
As Britain was tuning into the election results, I was watching from a distance in Vienna. Sometimes it is good to look at things from afar to gain perspective. Vienna is currently listed as the most livable city in the world (and has been for the last three years).
One of the factors is the relatively low cost of its housing and its high provision of affordable housing. This hasn’t happened overnight but is underpinned by over a century of investment in public housing starting in the 1920s in the so-called Red Vienna period when the city was run by reformist Marxists. Good quality housing with associated health and recreation facilities were seen as the bedrock of society.
Vienna is currently a city of around two million people. The local authority is the largest public landlord in Europe, owning and managing 220,000 homes, another 200,000 are managed by housing co-operatives and the equivalent of housing associations, 43% of all homes. Only 19% of homes in the city are owner-occupied.
It is not only the number and proportion of homes which are affordable which is astounding but also the quality. Without mentioning the swimming pools, which are found in the roof gardens of some housing association and council homes, the affordable housing stock is of generally high quality and is the aspirational tenure in the city. Many of those in the private sector are waiting for an affordable home. There is a two-year qualification period and then another 18 months to two years on the waiting list. Affordable housing is available to people with incomes limits around twice the average wage, for example a family of four can have an income after tax of €92,390 which is approximately £79,500 – or around £100k before tax. This means that affordable housing provides for both the middle and working classes. The rent is calculated on a square metre basis and for a typical flat is about £500 per month. Service charges are also calculated on the same floor area basis and again would be typically around £90 per month.
Vienna also has rent control. Private rented flats built before 1945 are subject to rent control. One of the main arguments in the UK against rent controls is that it would stop investment in new homes and in particular Build To Rent. It seems to me that having a cut off based upon the age of the property (which partly takes into account whether the loan to build the property has been repaid) could get around this problem. Private sector rent regulation in the UK was phased out under the 1988 Housing Act so if we introduced rent regulation for all homes built before 1989, then the provision of new housing would not be affected by the profiteering from homes sold under the right to buy (almost entirely built before 1989).
For new developments, Vienna has a planning policy which zone some areas as “subsidised housing”, in those areas a minimum of two thirds of housing by floor area must be affordable homes. The local authority also has a large land bank which it is developing for new homes where it restricts the profits which can be made from private housing. This tends to result in new social/affordable housing being of a higher standard than new private housing, again reinforcing the aspiration of local people to become municipal or housing association/cooperative tenants.
The approach to funding and developing housing and the extent of affordable homes also means that the, unlike the UK, the bulk of subsidy is for building or improving homes not for housing benefit. In 2020, Vienna spent €440m on housing, €255m on new homes, €100 on refurbishment and only €85m on housing benefits.
With a new government looking for ideas on boosting housing development and increasing the supply of social homes, a trip to Vienna would not be time wasted.
