Could Vienna’s approach to affordable housing work in California?
Imagine a beautiful city where a centrally located two-bedroom apartment can cost you as little as $600 a month. For many US policymakers, it’s a pipe dream. And yet in Vienna, it’s a reality.
In the past two years, at least four delegations of housing experts and political leaders from California have visited the Austrian capital, hoping to unlock the secrets of why Vienna regularly comes top in surveys of the world’s most livable cities.
They’re struck by the absence of homeless encampments, and marvel at the sheer scale of the subsidised housing developments which include shared amenities such swimming pools, gyms, workshops, communal gardens and spacious roof terraces.
And they wonder how they can bring some of it home to a region gripped by an unaffordability crisis that lands long-term residents out of state or on the streets.
Last year, California counted more than 180,000 people living on the streets, a 40% rise in five years. Housing costs in the state are now double what they are in the rest of the US. Average monthly payments for a newly purchased mid-tier home are more than $5,500 a month and wages have not kept pace with rising rents. “You now need to earn $200,000 a year to have a comfortable middle-class life in California,” said Jennifer LeSar of the Global Policy Leadership Academy, which organises the trips to Vienna.
The foundation of Vienna’s success is a housing policy that ensures all people live in dignified circumstances at affordable rents in homes they can keep for their lifetime and even pass on to their children. It’s not just for the poorest but the middle class as well. Sixty per cent of people in Vienna live in subsidised housing, compared with just 5% of Californians.
“This is incredible. The US sucks man. Why can’t we do this?” said Ruben Mendoza, a young activist from Uplift
San Bernardino, shaking his head in disbelief as he was shown around a mixed housing development near the city centre with communal facilities and affordable rents. Mendoza said one of the reasons he became a housing advocate was because he feared never being able to own a home in the community he grew up in. Like most Californians, he spends more than 50% of his disposable household income on rent. In Vienna, residents on average spend 27% of their income on housing.
There are some obvious differences. Vienna is densely built, with the majority of residents living in relatively small apartments within easy distance of the city centre. Most Viennese are renters, and use the wellconnected public transport system to move around. Most Californians live in owner-occupied single-family homes in the suburbs. Public transportation systems are underfunded, and most residents use their car to travel.
But the biggest difference is how much new affordable housing is going up in Vienna. “Just look at all the cranes,” said Adam Briones from California’s Community Builders, a research and advocacy organization working to close the racial wealth gap through housing. The city of Vienna builds about 6,000-7,000 new units of subsidised housing every year as it tries to keep up with rising demand. “They’re just building more housing than us. It’s not rocket science,” said Corey Smith of San Francisco’s Housing Action Coalition.
Vienna is the fastest-growing capital in Europe. Half of its residents were either born outside Austria or have parents who were, so city planners are constantly anticipating future demand. Until the 1990s, this once grand imperial capital was in the doldrums, stuck out on the edge of western Europe. It was once the centre of the Habsburg empire and the cultural and intellectual capital of Europe. Two world wars, fascism and the brutal destruction of the city’s once-vibrant Jewish population put an end to that.
The artists and the intellectuals had left. It was an ageing city, full of ghosts and the remnants of a fallen empire.
Two historic shifts at the end of the last millennium changed Vienna’s fortunes. Communism collapsed in 1989, the iron curtain came down and Austria joined the European Union six years after that. Young people from across central and southern Europe moved to Vienna, attracted by the wide availability of housing, its relative affordability, job opportunities and its position at the centre of a new enlarged European Union. Since then, its population has grown by 25%. Today 2 million people live there, and their number is growing year on year.
Nimbyism was a recurring topic during the week-long visit, with the Californians complaining that often when new developments are planned, small groups of residents try to block them through the courts, which makes the construction process slower and more expensive. Gleam Davis, a Santa Monica city councillor and former mayor, said that when her city tried to build affordable housing on parking lots, residents protested. “Unfortunately, in my city, some people think finding room for cars is more important than building homes for people.” Even within her own city council, there is strong opposition to building more housing, she said. “Some of my colleagues think we can police ourselves out of this or build our share of affordable housing in the desert and move those people out there.”
Vienna has a more top-down approach to tackling nimbyism. As the delegation toured Seestadt Aspern, a new town built on a former military airfield outside Vienna, the urban planner Kurt Hoftstetter explained that they had held up to 20 meetings in the nearby villages before they began construction. “We did this to inform residents of our plans and ask them how we could make it more acceptable to them. But we did not ask their permission.”
Vienna’s affordable housing system is supported by a 1% tax on all salaries which provides a permanent funding stream for new construction. This goes back 100 years to the end of the first world war, when the city was overflowing with refugees and homeless people. The Habsburg empire had collapsed, and Vienna became a city state with its own tax-raising ability inside the new federal Republic of Austria. “Red Vienna”, as it was known in the 1920s, has been a social democrat bastion within a largely conservative, Catholic country ever since (apart from 12 years under fascist rule) and providing permanently affordable housing became part of its DNA.
The housing tax currently generates about $250m annually and the city gets a further $200m in rental income and loan repayments. Since the 1990s, most new developments are built by limited-profit housing associations, which benefit from 1% government loans. They also benefit from building on land sold to them by