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.
Housing
In a recent report, only 30 to 40 percent of those polled in a national survey of urban and suburban residents believed a 10 percent increase in housing production would result in lower home prices and rents. Against that backdrop, however, a research team at New York University issued a report last month arguing that there is clear evidence that boosting supply is the key to lowering or moderating housing costs.
“All the evidence shows that it does reduce housing costs,” said Vicki Been, director of the NYU Furman Center for Real Estate and Urban Policy. The report by Been and two NYU colleagues attempts to look at all the evidence available from studies of the question.
“In sum,” they write, “significant new evidence shows that new construction in a variety of settings decreases, or slows increases in, rents, not only for the city as a whole, but generally also for apartments located close to the new construction.”
[…]
One thing the report authors, state housing officials, and supply skeptics agree on is that building more housing alone will not solve the housing crisis facing people at low incomes.
Increasing the supply of housing is necessary, said Been, but “it’s not sufficient because there will always be people who do not make enough money or can’t work for whatever reason and don’t have enough income to pay for housing.” She and her co-authors said robust housing subsidy programs are crucial for those households.
Calgary's downtown development incentive program, which offers $75 per square foot to building owners willing to convert underused office space to residential apartments, is unique to North America.
It was launched in 2021, at a time when the city — home to more corporate head offices per capita than anywhere else in Canada — was reeling in the wake of an extended downturn in oil prices and the COVID-19 pandemic.
Commercial property values in the city's core had collapsed due to a wave of energy sector layoffs and consolidation that had left close to a third of Calgary's downtown office space empty.
Desperate to fill nearly 13.5 million square feet of unoccupied space and boost its dwindling tax base, Calgary launched the incentive program with the goal of removing six million square feet of empty offices from the city's downtown by 2031.
Sheryl McMullen, who manages the program for the City of Calgary, said it was unclear at the time what the reception would be.
But the program turned out to be so popular that in October 2023, the city was forced to press pause after reaching its $253-million funding threshold.
Capitalism relies on maintaining an artificial scarcity of essential goods and services (like housing, healthcare, transport, etc), through processes of enclosure and commodification. We know that enclosure enables monopolists to raise prices and maximize their profits (consider the rental market, the US healthcare system, or the British rail system). But it also has another effect. When essential goods are privatized and expensive, people need more income than they would otherwise require to access them. To get it they are compelled to increase their labour in capitalist markets, working to produce new things that may not be needed (with increased energy use, resource use, and ecological pressure) simply to access things that clearly are needed, and which are quite often already there.
Take housing, for example. If your rent goes up, you suddenly have to work more just to keep the same roof over your head. At an economy-wide level, this dynamic means we need more aggregate production — more growth — in order to meet basic needs. From the perspective of capital, this ensures a steady flow of labour for private firms, and maintains downward pressure on wages to facilitate capital accumulation. For the rest of us it means needless exploitation, insecurity, and ecological damage. Artificial scarcity also creates growth dependencies: because survival is mediated by prices and wages, when productivity improvements and recessions lead to unemployment people suffer loss of access to essential goods — even when the output of those goods is not affected — and growth is needed to create new jobs and resolve the social crisis.
There is a way out of this trap: by decommodifying essential goods and services, we can eliminate artificial scarcity and ensure public abundance, de-link human well-being from growth, and reduce growthist pressures.
On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.
“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?
“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
RealPage software is used to set rental prices on 4.5 million housing units in the U.S. A series of lawsuits allege that a group of landlords are sharing sensitive data with RealPage, which then artificially inflates rents. The complaints surface as housing supply in the U.S. lags behind demand. Some of the defendant landlords report high occupancy within their buildings, alongside strong jobs growth in their operating regions and slow home construction.
A controversy in planning concerns the degree that upzoning can increase affordability.
I reviewed this issue two years ago in Planetizen columns, The Housing Supply Debate: Evaluating the Evidence, and A Critical Review of 'Sick City: Disease, Race, Inequality and Urban Land', and in a Governing Magazine article, The Housing Affordability Recipe. Recent studies support the conclusion that broadly-applied upzoning that allows more compact housing types (townhouses, multiplexes, and multi-family) in multimodal neighborhoods, with complementary policies such as reducing parking minimums, can increase housing supply, drive down prices, and increase overall affordability.
This research has not prevented skeptics from arguing the opposite; that upzoning increases rather than reduces housing prices and reduces affordability. Such skepticism is understandable: housing prices tend to be higher in dense urban areas and a parcel's value tends to increase if it is upzoned. However, upzoning a large urban area has very different effect: it creates a competitive market for land prezoned for higher density housing which minimizes lane value increases, as discussed in UCLA Professor Shane Phillips' report, Building Up the "Zoning Buffer": Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values.
The success of the program has other Canadian cities looking to emulate it and generated international attention for its boldness.
But without taking anything away from the grand ambitions of the Calgary plan, or the initial success it's seen (it isn't easy to convert one empty office block into apartments, let alone six million square feet worth), there are a few questions that need to be asked on behalf of the future residents of the 2,300-plus new homes about to be built. For example: What are they going to do there?
[…]
Paul Fairie, the principal co-ordinator of the Downtown Core Neighbourhood Association, also thinks something needs to be done about the big, empty east-west avenues, particularly on the weekends.
"You wind up walking one or two blocks in a row with literally nothing. You're just walking in this ambiguous, empty space," Fairie said.
But as a downtown resident for 14 years, he says the items at the top of his wish list are what he calls "the boring things."
Things like grocery stores, inexpensive restaurants and coffee shops that stay open after 6 p.m.
"A big misconception is, they think, you live downtown, you're living this sort of glamorous, exotic, party-oriented lifestyle. No. I'm just living in an apartment. It's a relatively normal life and the more we can do to facilitate that, I think, the better," he said.
England has more than twice as many long-term empty homes this Christmas as there are children living in temporary accommodation, the Liberal Democrats have said, calling this a stark indication of a “broken” housing market.
The numbers of families without a permanent home and in short-term housing, whether hotels and B&Bs or temporary rental properties, has hit a record high this year, with the latest statistics showing it now affects 121,327 children, according to data collated by the House of Commons library.
Other figures, also compiled by the library, show that councils across England have 261,189 homes that are classed as long-term vacant, meaning they have been empty for six months or more.
Council housing, once the bedrock of the housing system — providing secure and cheap tenure — is in shockingly short supply. According to the National Housing Federation, 1.6 million households are languishing on the waiting list — more than the number of households in the North-East — while all of England only managed to deliver a pitiful 8,900 council homes in 2021-22. Only 2,500 of these were for social rent, the traditional rent level for social housing, with the remainder at higher-cost tenures.
In the same period, the UK also sold off or demolished around 20,000 social homes, with 14,000 council homes sold off under the Right to Buy scheme. Over the years, Right to Buy has led to some 3 million homes being lost from the social housing stock. With millions in need of secure and affordable homes, rebuilding the council stock is a vital step — perhaps the most vital — in confronting the housing emergency. Council housing offers secure, lifelong tenancies and rent levels far below that of the private sector and most Housing Association properties, with the homes remaining in public hands, owned by us.
Amid this backdrop of depleted social housing, Sadiq Khan unveiled his ‘Right to Buy Back’ scheme in 2021, which has subsidised London councils to purchase homes from the private sector for use as council housing. This has allowed for former private sector homes to be added to the council housing stock, so long as the homes meet or are brought up to the Decent Homes Standard. In its first year, the scheme managed to facilitate the purchase of 1500 homes — a long way from what is needed to meet the city’s social housing needs, but almost as many council homes as were built across the rest of England last year.