Vienna's radical experiment: A city where housing is a right, not a commodity

Indian Express

4 days ago

In cities across the globe, renting a home feels like a gamble against spiralling costs and precarious leases. Londoners dodge sky-high rents fuelled by short-term Airbnb listings. In Paris and Dublin, speculators hold apartments empty, betting on price surges.
Yet in Vienna, a city crowned the world's most liveable by the Economist in 2024, renters stand apart. They pay, on average, just a third of what their counterparts in those other European cities do according to a recent Deloitte study.
The reason is simple but profound: nearly half of Vienna's housing is shielded from the market's volatility. About 43 per cent of the city's roughly 1 million housing units are either owned by the municipality or managed by limited-profit housing associations, with rents tied to costs or legal caps, not market value.
This isn't a niche program for the destitute, it's the heartbeat of the city. Over half of Vienna's residents live in subsidised housing, and a quarter reside in the city's 220,000 municipally owned apartments, making Vienna Europe's largest home-owning city.
This system, rooted in a century of bold policy, has made Vienna a dream destination for renters with limited income.
'Social housing policies in Vienna have been shaped by the political commitment that housing is a basic right,' Deputy Mayor Kathrin Gaal told POLITICO. The city's approach, built on a philosophy of social sustainability, integrates people of all incomes into the same neighbourhoods, avoiding the ghettos that plague other cities' housing projects.
'One of the key concepts to understanding Vienna's approach to housing is social sustainability,' Maik Novotny, an architecture critic for Der Standard, told the Guardian. '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.'
Vienna's housing model was born from crisis. Before World War I, the city's working-class families faced some of Europe's worst living conditions, as Harvard historian Eve Blau details in The Architecture of Red Vienna. Many took on bed tenants – day and night workers sharing the same bed in shifts – just to afford rent. When the Social Democratic Party (SPÖ) won control of the city in 1919, it made housing its top priority. The result was the Red Vienna era, a building boom that produced iconic Gemeindebauten or 'communal buildings' like the Karl Marx-Hof and Goethehof.
These weren't just places to live; they were statements. Designed to rival the bourgeois apartments of the elite, they featured art deco flourishes, courtyards, clinics, kindergartens, and the city's first public libraries. Unlike the flat-roofed, utilitarian projects inspired by modernist trends like the Bauhaus, Vienna's Gemeindebauten were built to last and to charm.
The Karl Marx-Hof, sprawling across the 19th district, and estates along the Ring Road of the Proletariat look more like monasteries than council estates – a term that, as Lynsey Hanley writes in Estates, 'is a kind of psycho-social bruise: everyone winces when they hear it.' She adds, 'it makes us think of dead ends (in terms of lives as well as roads).'
Vienna sidesteps this stigma. Its estates, integrated into the city's fabric, blur the line between public and private spaces. 'By bringing the public space of the city into the interior (and traditionally private space) of the block, the Gemeindebauten effectively turned the traditional urban block of the Central European city inside out,' Blau writes. These courtyards and communal spaces—housing laundries, libraries, and kindergartens—created 'a new form of communal space in the city' without disrupting Vienna's urban scale.
For residents like Florian Kogler, a 21-year-old university student, Vienna's system is life-changing. Living in a cramped two-bedroom with his family, Kogler was deemed an urgent case and offered a 355-square-foot studio in the 12th District for €350 a month – a fraction of his €1,000 part-time income.
His 1930s building, with a light-filled courtyard and a metro stop nearby, connects him to the city centre in under 20 minutes. 'I probably won't stay here my whole life because while one room is enough for myself, it won't be if I have a family, but that's really the only reason I would want to move out,' he told POLITICO.
His lease, like most in Vienna's social housing, has no expiration date, and rent increases are capped at inflation rates above 5 per cent. Eligibility is generous: anyone earning under €70,000 annually, well above the city's average household income of €57,700, qualifies for a Gemeindebau.
Once in, tenants stay for life, even if their income rises. Two-thirds of Vienna's rental housing falls under rent control, and just-cause eviction protections give renters stability akin to American homeowners with fixed mortgages. This security drives a striking statistic. 80 per cent of Viennese households choose to rent, not because they can't afford to buy, but because renting is reliable and affordable.
The system also tames the private market. Public and co-op units rent for 30 per cent less than private ones, and their quality is often higher, dampening private rents by up to 5 per cent. The Observer calls Vienna proof that 'decent homes for all' is achievable; the New York Times goes further, dubbing it 'a renters' utopia.'
The city sustains this model with over €570 million annually, funded partly by a 1 percent salary levy on residents. Yet it's remarkably efficient. In 2020, New York spent $377 per person on housing development, California spent $248, and Vienna spent just $124, much of it on low-interest loans that are repaid and re-lent.
The system is self-sustaining, unlike the voucher programs common elsewhere. Vienna's ownership of 420,000 subsidised units also gives it leverage for bold environmental moves. By 2040, the city aims to transition publicly owned buildings from gas to electric heat pumps and geothermal energy. 'If you have these buildings, you can make choices regarding those buildings,' says council member Nina Abrahamczik, who leads the climate committee.
Vienna's system isn't flawless and access can be a labyrinth. Applicants are judged on income, housing need, and residency length. The waiting list, currently at 21,000 households, favours those who know how to navigate the bureaucracy or have connections. 'It is generally well known that the long waiting list can be skipped with the right connections,' says economist Harald Simons, whose 2020 analysis criticised the system's inequities.
Newcomers, especially low-income families and immigrants, often struggle. Some co-operative units require steep upfront fees – like €35,000 for a 750-square-foot apartment – which, while partially refundable, can be prohibitive.
The lack of means-testing also sparks debate. Wealthy tenants can hold onto low-rent units indefinitely, as seen with Peter Pilz, a former parliamentarian who inherited a Gemeindebau lease from his grandmother.
Despite earning over €8,000 a month, he paid around €250 monthly. 'Given that Pilz's income is well over the usual tariff for social housing, it does look like we're talking about social fraud here,' said a spokesperson for Austria's Freedom Party in 2012.
Simons argues that inherited leases create disparities, with identical units varying in rent based on tenancy length. The private rental market, meanwhile, has grown less affordable since the 1980s, when deregulation allowed landlords to charge higher rents, reducing options for those locked out of social housing.
Vienna's refusal to privatise its housing stock in the 1980s and 1990s, unlike many European cities, preserved its control over rents.
'Today, more than ever, we can see that this strategy has been successful: Once the apartments are gone, the city has only a small lever to regulate rents,' Gaal told POLITICO.
From Barcelona to Helsinki, cities are now adopting elements of Vienna's approach. It's not just about affordability, it's about reimagining what a city can be when housing is a public good, not a private windfall.
Yet, as Simons cautions, 'Vienna's one true accomplishment is its ability to sell its social housing model as an unabashed success to the world.' For all its triumphs, the system demands constant vigilance to ensure it serves everyone, not just those already inside.