The topic of housing has moved up the political agenda. During recent regional and national elections in Spain, Austria and the Netherlands, different political parties attempted to gain votes by offering their respective visions for solving the housing affordability crisis. And a crisis it is indeed for many Europeans. According to the latest Eurobarometer survey from autumn 2024, housing is among the top 5 priority issues people think their country is facing.
average disposable incomes of Europeans have increased by a mere 17 per cent, while rents have gone up by 34 per cent and house prices by 76 per cent.
The decoupling of house prices and rents from incomes has two main drivers. First, the financialisation of housing has meant that housing has increasingly been treated as an asset, putting the value of a house above the value of an affordable and stable place to live. Speculative investment in housing has been buoyant, especially during the phase when interest rates were low on the capital markets. Houses were among the few investments that offered substantial yields. Second, a combination of a lack of investment in new affordable and social housing and the privatisation of existing public or non-profit housing has led to a shrinking housing stock of affordable and secure homes across many European countries.
In Vienna, Austria, about 60% of the housing stock is Govât funded âsocial housingâ with rents based on income. The other half is private housing with market rents, but the large social housing stock clamps down on any price gouging.
We can learn a lot from the âsocialistâ countries, but weâll probably need another Great Depression before any learning filters down to that most racist, ignorant and innumerate 35% of the population.
That wonât make much difference to me. At least a half dozen private delivery vehicles (e.g., FedEx, UPS, On-Trac, etc.) cruise through my subdivision daily. I suspect that itâs much different in poor rural areas.
It is. I learned the hard way, peddling stuff on eBay. The for-profit delivery services charge a premium for delivering out in the boonies, which bit me in the kazoo a couple times. USPS goes everywhere, every day, so no surprises about shipping cost.
Within this scheme, the ground for building is still provided by the city but the housing units are built with finance from banks, private developers or insurance companies. While the dwellings must be rented out as social housing for a limited period (mostly ten years), they then fall under the rule of the market, becoming available for sale, and resale, including for private rental.
Today, sadly, the municipality so provides not only for non-profit housing associations but also for private capital investments. In a way, then, one cannot blame investment banks for misusing âVienna modelâ as a label for PPP schemes that are âworking wellââread profitable for some. The city administration falls short of sticking to the socialist and democratic policies, oriented to the commons and mass empowerment, that give the model its meaning.
What is more, todayâs Vienna does not really gear its social-housing programmes to the working classes but excludes a significant part of them. Disenfranchised migrant workers are to a large extent denied access, through a regulation privileging access for those officially resident for over two years.
The administration has a euphemism for this anti-migrant measure, the Wien-Bonus (Vienna bonus). Under this nice-sounding name, the traditional paternalism of the cityâs social-democratic government is given a racist slant, amid the increasingly harsh conditions of neoliberally induced scarcity of affordable urban housing. While in the last two decades the market has built a lot, it has generated speculative vacancy or high-price apartments which make no contribution to mitigating the housing crisis.
Experts at the NGO Volkshilfe, which helps homeless people access social housing, argue that decades ago, 80 per cent of new developments were social and 20 per cent private. But now, the tables have turned.
âWe used to have two thirds of all apartments built by social housing, ten or fifteen years ago. Now it is the other way around. Two thirds of all apartments are being built by private investors. The result is higher housing prices, of course. We should try to turn it around again,â Martin Orner, the Head of the NGOâs Housing Policy Department, told Euronews.
Instead, says Peter, Viennese social housing is riven by rising costs, deteriorating quality, and the unfair allocation of units.
On the surface, the cityâs housing scheme seems to work well.
The government directly owns a quarter of all homes in the city. Tenants are selected by the government, and rent increases are held at the rate of inflation. Another 20 percent of homes are provided by city-subsidized nonprofits where rents are capped at the costs of operation. Purely private housing makes up only a third of rentals in the city, and most of those private units are rent-controlled.
The prevalence of below-market rents makes Viennaâs housing appear far more affordable than comparable cities in Europe and the United States.
The ability to hand down social units and their low rents do mean that many tenants in Vienna still do get screaming deals on their housing costs. Thatâs contributed to a shortage of social units. Some 21,000 households are on the waiting list for subsidized housing.
When new tenants do find a new unit, they are often left paying much higher prices on identical units to make up for those grandfathered below-market rents. They must also pay move-in fees that can be as high as $38,250, and compensate the former occupant for any improvements they paid for. Those costs also typically run between $2,100 and $3,200.
Lower-income tenants who canât afford these high upfront costs are left renting on the private market, where rents are higher.
These results arenât all that different from those of legacy rent control programs in the U.S. that gift incumbent tenants with rents well below market rates while restricting supply and increasing costs for new entrants.
Looks to me private entities have invaded the once public housing in Austria.
Federal law vs Wall Street 90-day profits window. Note the key difference: USPS has to deliver to every US address. Delivery businesses do NOT. Which is why USPS is used for so many deliveries by those delivery services. Impose the federal requirement on the nationwide delivery businesses and then watch the fur flyâŚ