Lessons from Vienna
On November 28, 2023, the DC Council Committee on Housing, chaired by At-Large Councilmember Robert White, held a roundtable entitled: Making Social Housing Work in the District of Columbia. Below is the testimony that Dr. Emily Gasoi delivered on behalf of The Center for Social Housing and Public Investment.
Lessons from Vienna: Over 100 years ago, the city of Vienna initiated policies rooted in an egalitarian “housing for all” approach to urban planning. Today, it is recognized globally for its remarkably robust and enduring model of social housing. One of the most critical outcomes of Vienna’s approach is that it has reversed the traditional relationship in which the private market drives housing costs and the public sector provides subsidies in various forms to fill the gap for the growing numbers of residents who cannot keep up with soaring rents. In Vienna, social housing makes up over 40% of the total stock, and approximately 60% of residents live in social housing units where their rent covers the costs of initial development and ongoing maintenance or renewal as needed. All of these practices have an indirect dampening effect on private market rents as the large share of social housing contributes to more affordable prices for a major proportion of the entire housing market.
In the remainder of this testimony, I will provide highlights from Vienna’s social housing model that have led to this remarkable outcome and that I believe are most relevant here:
1. Rooted in a Steadfast Commitment: Vienna before WWI was in a terrible state of social disarray – the housing situation was so deplorable for working-class residents that families often had to double up and workers resorted to renting out their beds in time-share arrangements. Tuberculosis became so rampant in these unsanitary living conditions that it gained the nickname the “Vienna Disease.” In 1919, when the newly elected Social Democrats began planning for a more livable and equitable city, they rooted those plans in a commitment to provide quality housing and well-resourced communities for all. In order to actualize this vision, they did not start with a small pilot project that could be easily sidelined. In 1922, the first social housing development was completed providing just over one thousand units. Within five years, the city had constructed or obtained 65,000 municipally owned units. Today, municipal or limited-profit housing makes up nearly half of all rentals. Most importantly, the city plans for ways to keep these cooperating sectors in a state of continuous growth to keep pace with demand (about 7,000 units per year).
2. Multiple Types of Affordable Housing: In addition to municipal housing, Vienna has responded to challenges associated with growth and economic pressures over time by creating multiple pathways to keeping its commitment to affordable housing for all. For the most part, this has involved adhering to policies that keep all municipal stock under permanent city ownership and developing highly regulated private-public partnerships that hold benefits for all parties:
Limited-Profit Housing Associations (LPHA) are highly regulated non-profit housing developers. Austrian federal law stipulates that rents paid to LPHAs should be fixed to cover the respective costs of land, construction, administration, and financing. Since the 1980s, most new social housing development in Vienna is constructed, owned, and managed through LPHA developers, making them critical partners in ensuring the ongoing growth of the Social Housing sector. One of the essential conditions set down in law is that LPHA housing will remain permanently affordable, a factor that has been shown to dampen volatility in the private housing market.
Deeply Affordable Options: In addition to being bound to build a mix of units with a range of rental costs, LPHA developers are also obligated to construct one-third of all of their new social housing developments as “Smart Flats”, which are smaller, more compact apartment units that are deeply affordable for residents most in need.
Revitalization of Old Stock: Finally, the sustained efforts towards “Gentle Urban Renewal”, too, play a role in keeping housing affordable while safeguarding about 20,000 construction jobs.
3. Broad Access Criteria: According to income and other access criteria, 75-80% of Vienna residents qualify to apply for subsidized housing. This is perhaps the most misunderstood and also the most critical aspect of Vienna’s model. Vienna has deliberately avoided targeting affordable housing only for low-income residents, which is essentially a form of economic segregation by design. Instead, the city has maintained a commitment to establishing a city characterized by affordability for all. They achieve this through the following policies and practices:
Social Housing units in Vienna are not tied to an income or AMI level that the tenant must meet to gain access. Instead, all rents are calculated by floor space.
Related, while no two social housing developments are the same, there are specific standards that all developers must incorporate in the design, including a mix of apartment sizes and a range of rent prices that contribute to income diversity within each building, as well as a percentage of what are called “Smart Flats” which are units set aside for residents with specific and/or urgent need. All the units, regardless of size, are built to the same high standards, with access to ample common space and amenities.
There are no year-to-year leases, so renters in social housing have tenure security that is almost equivalent to ownership. Tenants can stay in their apartments forever if they like, and, in some cases, can even hand them down to their children.
Finally, having a majority of Vienna’s residents residing in mixed-income housing located in literally every district citywide contributes greatly to the de-stigmatization of social housing.
While these practices may sound counterintuitive to most Americans, doing away with ongoing income criteria creates stability for individual residents and, by extension, builds more stable communities. In addition to creating a city characterized by affordability, Vienna’s criteria allowing it to hold a big share of the housing market with wide appeal and desirability across diverse income levels has numerous important outcomes:
It greatly reduces the influence of profit-oriented property developers, allowing the social housing sector to set the norm for citywide rental costs.
It prevents social housing from becoming marginalized which also helps to secure majority support from residents. In turn, this makes the design of socially integrated developments more feasible, countering the segregation and social isolation that characterizes public housing in the US.
Beyond the dwellings themselves, this model makes it more efficient to design socially vibrant and environmentally innovative living communities with an array of retail, public services, and amenities that serve all residents, which, in turn, reduces displacement and NIBY-ism that generally accompany gentrification in US cities.
The fact that a majority of residents do not spend more than 30% of their income on their rent means that they have more disposable income to spend on their families, leisure time, and in the local economy.
4. Developer Competitions are a critical component of effectively achieving high quality, dense housing at relatively low cost. In Vienna, developer teams must compete to win city contracts and subsidies to build new social housing developments. Further, developers’ plans must adhere to Vienna’s egalitarian and environmental priorities by following the city’s four pillars guiding all social housing construction; each subsidized housing project is judged by an interdisciplinary jury along four sets of criteria: social sustainability, planning, ecology, and costs. The introduction of this competitive system has led to an increase in the social and technical standards of new housing, while reducing construction costs, which in turn helps to keep rent low while covering the cost of construction and maintenance over time.
5. Inclusive Zoning: There is zero new zoning for single-family homes in Vienna. Rather, zoning is generally for 6-8 story high-quality, energy efficient, and aesthetically attractive apartment buildings that encompass several blocks. Every new housing development begins with the construction of public transportation, schools, and green spaces commensurate with the planned density of the new housing units. To meet the challenge of finding space for new development, zoning allows for the conversion of former industrial lands to housing. The city recently redeveloped an old airport and a defunct rail yard, each development will house over 20,000 residents in affordable dwellings. While the city is expanding out into formally less-inhabited areas in order to keep pace with demand, I want to emphasize that from the beginning, the city has deliberately built social housing developments throughout the city, in every district, from the densely-populated historic center to the riverbanks of the Danube and beyond. As a result, there are no economically isolated communities, no food deserts – there is literally no concept of a “bad” neighborhood” in Vienna – and this, the city government has achieved through “active municipal policy on behalf of people and the future.”
Implications for DC: This testimony just scratches the surface of what we have to learn from Vienna regarding smart, humane urban planning – in and beyond housing. Perhaps the most important lesson of all is that Vienna shows that a better world truly is possible and we can get there through sensible policy – here are my recommendations to the committee:
The access criteria should be wide. It is time to shift our thinking away from isolated models of marginalized public housing and toward planning for a city that is socially integrated and affordable for all. As research on the Vienna model has shown, socially mixed and stable housing creates stronger communities for everyone.
Housing developments must be designed with social integration at its core. In addition to remaining committed to wide access criteria, this means planning for developments to be built in all 8 wards, anchoring this commitment in ethical principles that guide design, planning, and practices, and initiating building criteria that lead to a range of unit types that are accessible to an economically diverse cross-section of residents.
Do not require residents to recertify income eligibility after moving in. This will remove a deep layer of bureaucracy and contribute to the creation of more stable, cohesive communities over time.
Write into law mechanisms that would keep DC’s municipal housing stock in a state of continual growth through permanent ownership.
Invest in partnerships with municipal housing experts from Vienna and other successful model cities, such as Singapore and Helsinki, as well as closer to home in Montgomery County and with organizations like Global Policy Leadership Academy and The LA Housing Movement Lab in California. – especially in the first several years of policy development and implementation.
In 1920, Vienna imposed a luxury tax to help pay for the initial investment in affordable housing. Today, all working Austrians pay .005% in income tax that is matched by their employer. The Council should make a commitment to affordable housing in the District by leveraging taxes to help ensure financial stability for the OSH over time.
Launch an ongoing city campaign to educate and actively engage residents in making this initiative work for DC. We need community engagement around developing our own name, narrative, and guiding principles. And there needs to be widespread understanding of our model rationale and practices so that city leaders and residents feel a sense of ownership and investment.
In conclusion, this initiative needs to be more than a pilot project that works alongside the profit-oriented housing model which is characterized by speculation, demolition, and displacement. If we are serious about becoming a city characterized by affordable housing for all, then we need to set up an Office for Social Housing that is primed to grow into DC’s primary housing authority. This will mean planning now for informed, intentional shifts in the relationship between OSHD and other municipal and private housing actors over time. Like Vienna, DC needs to approach this as a paradigm shift through vigilant enactment of smart policy and unwavering political will.