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14 August 2023

What lessons can Wales learn from Vienna’s over 60% social housing model?

What lessons can Wales learn from Vienna’s over 60% social housing model?

In July we were delighted to welcome the former deputy mayor of Vienna Maria Vassilakou to our One Big housing conference to share her fascinating take on the European approach to social housing.

Maria, who now heads up urban transformation and strategy firm Vienna Solutions, offered her insight into how social housing is for everyone, and offered her advice on how Wales can overcome its housing challenges …

How is Vienna leading the way in social housing?

Vienna has the world’s most ambitious social housing program (to date), which started in the early 1920s and keeps delivering up to 7,000 social housing units annually.

Today, 62% of the Viennese live in:

  • 230,000 municipally owned public housing units, which were built, owned and maintained by the city of Vienna;

  • Or 220,000 subsidised social housing units, which were built, owned and maintained by non-profit developers; with the city of Vienna subsidising construction costs, providing in most cases low-cost land, and supporting tenants with individual grants if needed.

Altogether over 75% of all Viennese people live in rented units: only 5% of these units are free-market rents.

The rest are municipal housing, social housing or regulated rents housing (privately owned but regulated through cap on rent costs). Owner-occupied units stand for approximately 25% of the entire housing stock.

How does Vienna maintain this position and what are its biggest challenges?

The key to Vienna’s success starts with the city’s long-term dedication to affordable housing as a political value, and a target which is shared across politics.

The city also has an active land policy: it builds land reserves by buying areas such as agricultural land, abandoned brownfields, former military areas, and also reuses municipally owned land such as former hospital areas and airfields, and later converts them into urban quarters.

It also adds smaller subsidised housing projects to fill in dense parts of the city.

However, the biggest shift which has supported affordable housing came in 2019, when the city council approved a new land policy that introduced a zoning category for subsidised housing. This new category automatically applies as soon as a development exceeds 150 housing units, and states that two thirds of these units must be social housing.

As part of this, developers will have to collaborate with social housing developers, or find a social housing branch to qualify for change of land use category, and/or necessary zoning.

Developers can negotiate and reduce the percentage of social housing down to at least 50% plus one unit, if they make other contributions to the common good, such as building a school, financing a park, constructing a publicly accessible green roof top terrace etc.

Funding has also been key: the city invests a minimum of approximately 530 million euro annually in social housing subsidies for construction and renovation.

Besides Vienna’s Housing Fund (an agency owned by the city of Vienna that manages land and housing subsidies), the city also tenders for teams of planners, architects, social workers, urbanists, geographers, landscape architects and more every five years to carry out significant projects.

Successful teams then lead on large-scale area renovation processes, large-scale new urban quarter construction, monitor quality, involve local communities, and carry out a number of vital projects.

What lessons could Wales, and other countries, learn from Vienna's approach to social housing?

It’s important to remember that social housing can always be a story of success.

But these factors are vital to any city’s social housing progress:

  • Target middle income families - 75% of the Viennese are entitled to social housing, income limits for qualifying are above average.

  • Base it on a robust and flexible mix of subsidies - Vienna’s model provides affordable land plus construction subsidies, these are in the form of long-term, low interest loans, which in effect return into a revolving fund. This is alongside individual grants for tenants who still need additional support, for example with rent.

  • Rent prices should reflect the real costs for land and construction - and not the income of the tenant, who can apply for a grant if needed. This way social housing becomes and remains economically sustainable, the city does not confuse the housing budget with the social welfare budget. And the city maintains transparency for all - tenants know at any time, how much they should be paying, if they are supported by the welfare system, how they are supported, and how much the support they receive is. This leads to tenants being exceptionally reliable, as opposed to systems which are linked to tenant income that produce an exceptionally high percentage of arrears.

  • But the most important lesson of all is: it all starts with a first step. Vienna started in the early 1920s on a small budget, with high ambition and the will to act. This still applies everywhere in the world when facing rapidly rising challenges.

What are the biggest barriers you frequently see in social housing? And what is your opinion on how Wales could tackle its barriers?

In many cases it all starts with expensive, rising or even sky-rocketing land prices. So tackling this challenge means embarking on an active, innovative and bold land policy, involving all relevant stakeholders to provide affordable land for social housing construction in the first place.

The very foundation of all successful social housing models is the availability of affordable land - this will make social housing economically sustainable even in cases where construction subsidies are very low or non-existent.

But, social housing, the way I perceive it, addresses the middle class. So the second challenge to be tackled on behalf of Wales is a shift in focus and mind set.

Social housing not only for the socio-economically weakest parts of society, but targeting the very middle, the vast majority, who will in return “cross-finance“ the entire system. This will make it sustainable and enable financial flexibility for cities and the state to provide additional support for families in need.

For more information on Maria Vassilakou visit Vienna Solutions.

For media queries please contact medi@chcymru.org.uk