Imagine a tenant's utopia.
It could look like Vienna.
The boom in the property market created a global housing crisis. What can we learn from a city that mostly avoided it?
When Eva Schachinger got married at the age of 22, she announced herself to the public housing. Fortunately, she lived in Vienna, which has some of the best public housing in the world. It was 1968. Eva was a teacher and her husband Klaus-Peter was an accountant in the city's public transport system. She grew up in a public housing complex in the center of the city, where her grandmother lived in one of the five buildings arranged around the yard, who looked after her from 6 o'clock in the morning to 6 o'clock in the evening. Eva played with her friends from the complex all day.
Her mother, who had rented out on the private market after her divorce, also recently applied for public housing and was only offered housing in 1971. By then Eva had a young daughter and her mother decided that Eva needed more and offered her one. him. The available unit was in the 21st District, on the northeastern edge of the city. Eva's father-in-law warned her - not entirely in jest - that they would be the first out there to be occupied by the Russians. But she and Klaus-Peter liked the layout: although the apartment was economical at 732 square meters, it had two bedrooms, a living room, a dining room, a toilet and bathroom, and a balcony. The rent was 700 shillings. (That's about 55 euros, although the currency was only introduced in 2002.) Eva moved her job as a teacher to the 21st district, to a school 15 minutes' walk from her new apartment.
When I met Eva at the end of last year, she looked elegant in a denim jacket with a silk scarf tied neatly around her neck, small dangling earrings and cropped curly hair. Over the past 44 years, during which she continued to teach English from fifth to eighth grade, Eva's rent has almost quintupled to 270 euros from 55, but her salary has increased more than 20 times to 3,375 euros a month from 150. The Vienna law requires that the rent in public housing can only increase with inflation, and only when the annual inflation exceeds 5 per cent. When she retired in 2007, Eva's rent was just 8 percent of her income. Since her husband earned 4,000 euros a month, their rent together amounted to 3.6 percent of their income.
This is roughly what Vienna aspired to as early as 1919, when the city began planning its world-famous urban apartment buildings, known as Gemeindebauten. Before World War I, Vienna had some of the worst housing conditions in Europe, notes Eve Blau in her book "The Architecture of Red Vienna". Many working class families had to take in lodgers or bed tenants (day and night workers who slept in the same bed at different times) to pay the rent. But from 1923 to 1934, a period known as Red Vienna, the ruling Social Democratic Party built 64,000 new units in 400 apartment blocks, increasing the city's housing supply by about 10 percent. About 200,000 people, a tenth of the population, were rehoused in these buildings, with rents set at 3.5 percent of the average income of a semi-skilled worker, enough to cover maintenance and operating costs.
Experts call Vienna's Gemeindebauten "social housing," a phrase that describes how the city's public housing and other limited surplus housing is a widespread shared social benefit: Gemeindebauten welcome the middle class, not just the poor. In Vienna, a staggering 80 percent of residents qualify for public housing, and once you have a contract, it does not expire, even if you become richer. Housing experts believe this approach leads to greater economic diversity in public housing — and better outcomes for the people who live in it.
In 2015, before they bought an apartment on the private market, the Schachingers earned about 80,000 euros ($87,000) a year, roughly the income of the average American household in 2021. Eva and Klaus-Peter paid 26 percent and 29 percent in income tax.. but only 4 percent of their pre-tax income went to rent, which is equivalent to what the average American household spends on dining out and half a percentage point less than what the average American spends on "entertainment." Even if the Schachingers were to win a new contract for their unit today, their monthly payments would amount to an estimated 542 euros, or just 8 percent of their income. Vienna's generous supply of social housing helps keep costs down for everyone: in 2021, Viennese living in private apartments used 26 percent of theirsubsequent taxationrental income and energy costs on average, which is only slightly higher than the total figure for residents in public housing (22 percent). Meanwhile, 49 percent of American renters — 21.6 million people — are cost-burdened, paying landlords more than 30 percent of theirbefore taxesincome, and the percentage may be higher in expensive cities. In New York, the average renter household spends a whopping 36 percent of their amountbefore taxesrental income.
To American eyes, the whole structure of Vienna can seem fantastically socialist. But let's put that aside, and what's amazing is how social housing gives a completely different shape to Vienna's economic life. Imagine if your housing costs were more like Schachinger's. Imagine having to think about them the same way you think about restaurant choices or streaming subscriptions. Also think about where the rest of your income would go if you spent much less of it on housing. Vienna invites us to imagine a world where home ownership is not the only way to ensure a secure future - and what our lives might look like as a result.
Writes about housingin the US I became depressed. I'm a dinner party, upset by big investors speculating in the real estate market, yes, but also thousands of small investors — including some of my friends — raising money to buy houses in states I've never seen or buying rental properties in gentrifying neighborhoods. But math is hard to argue with. Buying a house near work is more profitable than working. Growth in asset values has outpaced returns to labor for four decades, and a McKinsey report found that the majority of those assets — 68 percent — are real estate. Last year, one in four home sales were to someone who had no intention of living in it. These investors are particularly incentivized to buy the homes that first-time buyers need the most: cheap properties generate the most rental cash flow.
Real estate is where money literally grows on the rafters. In the past decade, the typical single-family homeowner has gained nearly $200,000 in value. "Another word for increase in value is inflation," write academics Lisa Adkins, Melinda Cooper and Martijn Konings in "The Economics of Assets," "an increase in the value of money without any corresponding change in the nature of the asset itself or the conditions of its production, which would make it more sparse or justify an increased search for him." That inflation creates a creeping gap between homes that have and have not. Harvard's Joint Center for Housing Studies found that in 2019, the average net worth of American renters was just 2.5 percent of the average net worth of homeowners: $6,270 versus $254,900. Last year, as higher interest rates slowed home sales and caused prices to stagnate (and even bleed in some overheated cities), the asking price for the average U.S. rent hit $2,000 a month, a record high, according to Redfin. Increased rents line landlords' pockets while preventing tenants from saving up for a down payment and getting off the conveyor belt in the first place.
The astronomical pace of price increases is the culmination of decades of policies aimed at encouraging home buying. The 30-year fixed-rate mortgage is a uniquely American invention made possible only because the federal government underwrites the debt—if the borrower defaults, the government is on the hook. (Only one other country, Denmark, offers the same instrument.) Then there is our tax code, which allows those rich enough to buy houses and itemize their deductions to write off the interest they pay on their mortgages: yes larger the mortgage, the higher the deduction. Homeowners can also deduct up to $10,000 in property taxes from their federal taxes, and if they sell their primary residence, they may be able to avoid paying capital gains on the gain up to $250,000 per person ($500,000 for couple). As housing activists like to point out, everyone with a mortgage lives on housing benefit.
Last year, disturbed by the seeming intractability of these problems, I began looking outside the United States for solutions. Could the answer be rent control, like in Berlin? It might have seemed that way a decade ago, before investors and new residents began pouring into the city, causing land values to quintuple; now even apartments that nobody else wanted to buy 15 years ago are big money makers despite rent stabilization laws. Many residents with affordable leases are locked into them because moving would be too expensive or competitive. Frustrated by the housing squeeze, tenant organizers recently launched the "expropriation" measure, which called on landlords with more than 3,000 units to sell their properties back to the government at below-market rates. In a referendum in 2021, 59 percent of Berliners voted for it, but it is not clear whether it will ever be implemented.
Could the answer be to loosen zoning restrictions, as Tokyo did in 2002? It definitely helped. In 2014, more houses were built in the city than in the whole of England. Since then, house prices have stabilized. Tokyo is widely celebrated as a role model by YIMBYers (members of the yes, in my backyard movement) because they like its market-driven approach to housing abundance. They often point out that the city builds five times as many homes per per capita than California. But Japan is a very different market for earthquake risk: because regulatory codes and mitigation technologies are constantly improving, structures are often fully depreciated within 35 years. Older houses are often under-maintained because there is little expectation that any investment could be recovered on resale; think of them like used clothes or cars – you resell at a loss.
Auckland, New Zealand, may seem like a more applicable example. In 2016, a city that has one of the most expensive real estate markets in the world,"rebuilt" 75 percent of its residential area,increased its legal capacity for housing by about 300 percent in an effort to promote the construction of multifamily housing and reduce prices. In areas that expanded, the total number of building permits issued (a method of assessing new construction) more than quadrupled from 2016 to 2021. As planned, the relative value of undeveloped sites increased because they could accommodate more homes at once, and the relative value of undeveloped land increased as planned. relative value units in densely developed areas reduced, easing prices skyward. But there are limits to what upzoning can do. Often the benefits of allowing higher densities are captured by developers who value new units far beyond cost. It does not provide tenants with security or directly create the type of housing that is most needed: affordable housing.
This is what sets Vienna apart. Perhaps no other developed city has done more to protect residents from the commercialization of housing. In Vienna, 43 percent of all apartments are isolated from the market, meaning that rental prices reflect costs or prices set by law – not "what the market will bear" or what a person with no other options will pay. The government subsidizes affordable units for a wide range of incomes. The average gross household income in Vienna is €57,700 per year, but anyone earning below €70,000 is eligible for a Gemeindebau unit. Once you're in, you never have to leave. It doesn't matter if you start earning more. The government never checks your paycheck again. Two-thirds of the city's rental apartments are subject to rent control, and all tenants are protected from eviction for just cause. Such regulations, combined with sufficient supply, provide renters with a level of stability comparable to American owner-occupiers with fixed mortgages. This is why 80 percent of all households in Vienna decide to rent.
The main difference is that Vienna's priority is to subsidize construction, while the US's priority is to subsidize people with things like housing vouchers. One model is focused on supply, the other on demand. The choice of Vienna illustrates a fundamental economic reality, which is that a large enough supply of social housing offers a market-based alternative that improves housing for all.
Last one afternoonIn autumn I walked through the center of Vienna, past ornate buildings with lace balconies, balustrades and porticos - 19th-century private apartments. They were interspersed with social housing blocks from the 1920s and 1930s - the Gemeindebauten, which stood out not only for their modernist architecture but also for the triumphant red block letters on their facades which announced:It was built by the municipality of Vienna in 1925-1926. with the funds of the apartment tax. ("Built by the Municipality of Vienna in 1925-1926 from property tax funds.") Political genius, I thought as I waited for the tram: explanation and advertisement. Half an hour later I was in the 21st district, "Russian territory", where Eva Schachinger lived. Wohnpartner, a city agency that tries to promote community in the Gemeindebauten and helps resolve tenant disputes, held an open house in its old building, a flat, minimalist complex with orange elevator shafts.
Following the Wohnpartner signs, I found the glass-walled community center and entered. Most of those present were mothers with small children or pensioners. There was a boyar station, table tennis and a plant exchange. People brought their used items to donate, and a Millennial Wohnpartner employee offered technical assistance, which, surprisingly, no one needed. Among the permanent settings was a library stocked with free books and a play area with an array of wooden toys.
I sat down with Eva in the communal kitchen, where someone had made a large pot of squash soup. (Some of the planners of Red Vienna hoped to centralize cooking in communal facilities with industrial machines, but the fascists were first, and then, under capitalism, Austrian families quickly got used to scrambling for their own KitchenAids, Vitamixes and Nespresso machines. ) Since retiring, Eva has collaborated with Malyuun Badeed, the housekeeper, on a twice-yearly magazine for the complex that includes a recipe and a crossword puzzle along with the latest news from the community. Badeed, who joined us in the kitchen, wore a beaded black hijab and waved her arms as she talked about leaving Somalia as a single mother in the 1990s. When she first arrived in Vienna, she spread newspapers on the streets; now she helped produce one.
Eva told me that she often returned to the Gemeindebau to teach students from the complex with a woman named Edith, an elderly neighbor who lived in a nearby Gemeindebau. Edith's closest neighbors help her buy and deliver groceries, which she finds difficult to carry. In return, she looks after their three children. When Eva called to wish her a Merry Christmas, Edith was busy wrapping 40 presents for her three children; she hid them around her apartment so they wouldn't be found until Santa came to visit. "Gemeindebau is a place where socialization takes place," Eva was happy to tell me, and this is what socialization looks like over the generations.
I learned that the average waiting time for Gemeindebau is about two years (at any given time there are about 12,000 people on the waiting list, and every year about 10,000 or more people are accommodated). Residents of Vienna - anyone who has had a fixed address for two years, regardless of whether they are citizens or not - can apply, and applications are assessed on a need basis. Florian Kogler, a 21-year-old student, was considered an emergency because he lived in an overcrowded two-bedroom apartment with his mother, stepfather and two siblings. He shared a room with his brother and his parents slept in the living room. He also got an advantage because he moved into his own apartment for the first time. Kogler was offered an apartment in about a month. "It's unusually fast," he told me.
Applicants may decline a maximum of two units; if they reject a third, they must reapply. Kogler took the first apartment he was offered, a light-filled 355-square-meter studio overlooking a playground in the central 12th arrondissement. It cost 350 euros a month; his monthly income from part-time work at the museum is around 1,000 euros. Those who need extra help to pay their rent will receive an individual subsidy. Students under 25 can, like Kogler, qualify for 200 euros per month.
Every few years there is a debate about whether the wealthy should be forced to give up their Gemeindebau tenancies – i.e. whether the units should be means-tested. For some, the face of this debate is Peter Pilz, a former member of the Austrian Green Party in Parliament. Pilz lives in the Goethehof, one of the largest Gemeindebauten along the Danube River. He moved into the apartment as a student to live with his grandmother, who had been there since the building opened in 1932. Before she died, he took over her contract. (He was, you might say, a grandmother.) Pilz was elected to parliament in 1986 and eventually began earning more than 8,000 euros a month.
Even in Vienna, Pilz's tenancy raised eyebrows and made headlines in Austria's conservative newspaper Österreich, which claimed in 2012 that he paid just €66.18 a month in rent. (Pilz says he paid, including construction costs, close to 250 euros a month.) "Given that Pilz's income is significantly higher than the usual rate for social housing, it seems that we are talking about social fraud here ," said the general secretary of the conservative Freedom Party of Austria.
Pilz did nothing illegal. Once you enter the Gemeindebau, you never have to leave. But is it unethical for the rich to stay? City housing officials point out that wealthier tenants in Gemeindebauten help prevent the problems that come with concentrated poverty and create a more stable and healthy environment for everyone. Unlike in the United States, where public housing is only for the poorest—residents' average annual household income was $15,219 in 2019, well below the federal poverty line of $16,910 for a family of two—the relative integration of the Gemeindebauten means they are not stigmatized .
This does not mean that they are without problems. Noomi Anyanwu, the 23-year-old founder of Black Voices Austria, told me that she grew up in Gemeindebau with an Austrian mother and a Nigerian father. When she was no more than 5 years old, a white boy in the complex who was a little older called her brother a racial slur while they were all playing in the yard. When the fathers heard the argument, they went down into the yard. But the white father did not apologize; he turned and repeated what his son had told him. Just a few years later, Anyanwu said, her father left the country because of job discrimination and racist police treatment.
So I was surprised when Anyanwu told me that her experience with social housing was generally positive. Gemeindebau was its own village within the city, she said. She estimated that 50 percent of her neighbors in the Gemeindebau were immigrants—"it's a reflection of society," she told me. (Vienna actually has a slightly higher percentage of foreign-born residents than New York City.) A girl her age named Safiya lived in the apartment across the street from hers and would become her best friend. Safiya's father was also from Africa - from Somalia - and he also left because of racism. But the availability of the Gemeindebau allowed the girls' mothers to maintain stability.
Esra Ozmen, the daughter of Turkish immigrants, grew up in Sandleitenhof, one of the largest Geimendebauten, which has villa-like courtyards and brickwork. As an adult, she moved into her own Gemeindebau studio. Ozmen says the affordable housing gave her the stability to study for her Ph.D. in visual arts while also pursuing a career as a rapper. He earns from 1,000 to 2,000 euros per month performing and organizing cultural events. “I have a car,” she told me. “A Mercedes A-Class from the 90s. I eat out. I drink one coffee outside every day. I do not have much money. But I live richly'.
Social housing such asVienna may seem unimaginable in America. But American politicians seriously considered it in the 1930s. After the stock market crash of 1929, the American real estate market also collapsed; half of the mortgage debt was in default by 1933. Both the right and the left agreed that the government had to intervene. The question was how. According to historian Kenneth T. Jackson in his book "Crabgrass Frontier," a typical mortgage at the time was five to 10 years long, with borrowers paying only interest until the end of the term, when the full payment was due or the borrower refinanced. When President Franklin D. Roosevelt took office in 1933, Congress created the Home Owners' Loan Corporation to buy underwater loans and stabilize the housing market. Within two years, H.O.L.C. has restructured more than one million mortgages, covering 10 percent of all owner-occupied homes. Principal and interest were combined so that after about 20 years of affordable payments, the borrowers became actual homeowners.
But it was not enough to save the real estate market or the economy. During the Great Depression, a quarter of all Americans were unemployed, and the construction industry was particularly hard hit. The US needed the same things that Vienna did at the time: employment and better housing for workers. Housing is "the cog in the wheel that drives the whole economic engine," said Marriner Eccles, Roosevelt's chairman of the Federal Reserve. The Federal Public Works Administration, an emergency jobs program, financed the construction of about 50 new public housing complexes, including the Harlem River Houses in New York, a project seemingly straight out of Vienna, with art-inspired buildings along a central street, a courtyard with a daycare center , a hospital and a public library.
Although the house was admired, it was expensive and mired in controversy, writes historian Gail Radford, who chronicles the New Deal-era public housing debate in her book, "Modern Housing for America." Roosevelt wanted a housing plan that did not require the government to keep paying the bills. At a time when communism was gaining ground, he preferred to marry Americans to capitalism. The best way to do this? Expand the Home Ownership Base — Increase the number of Americans who personally invest in real estate.
Congress's National Housing Act of 1934 would save the housing market and establish the housing policy that defines America today. He made permanent the long-term fixed-rate mortgage that H.O.L.C. helped to introduce. Banks were reluctant to take on risk for decades, so the Federal Housing Administration (F.H.A.) was created by law to insure mortgage debt with the full backing of the U.S. Treasury Department as long as the loans met the standards it set—for example, homes they had to assess the purchase price, and it had to be in a stable enough neighborhood, which meant a white enough neighborhood, to make sure the government wouldn't lose money if the borrower defaulted. On his card is F.H.A. painted neighborhoods deemed too risky for mortgage insurance red—a form of "redlining," a policy that did much to create severe racial wealth disparities that persist today. "No agency in the American government has had a more pervasive and powerful influence on the American people in the past half century," Jackson writes.
But the Federal Housing Administration had no plan to meet the housing needs of the poor. So Sen. Robert Wagner, a New York Democrat, introduced another bill, inspired by what housing researcher Catherine Bauer saw in Vienna and other European cities. As proposed, the Housing Act of 1937, which Bauer co-authored, would have included funds for the construction of low-income housing and public housing. In the face of stiff opposition from the real estate industry, Wagner and Bauer accepted five fatal compromises to pass the bill. First, support for non-profit and limited profit cooperatives was abolished. Second, placement decisions were left to local authorities, many of whose constituents welcomed public housing like the bubonic plague, as one commentator put it. Third, a provision was added for the "equivalent elimination" of slum properties, meaning that for every new unit built, one slum must be cleared. (That way, public housing would not reduce landlord profits by increasing the overall supply of units.) Fourth, public housing would be available only to those who are so poor that they could never secure decent housing on the private market .
Fifth and finally, construction costs were severely limited. The problem with America's public housing today is not just that it is underfunded and poorly maintained. It's that it's not built well to begin with. The doors remained on the cupboards; the interior walls were thin and cheap. In a public housing complex in Red Hook, Brooklyn, the elevator stopped only every second floor. As Radford writes, "Those who hated public housing remained hostile, while the minimal buildings produced by [the United States Housing Authority] attracted new allies and deterred some old ones." In fact, American public housing is designed to fail: to be unattractive to anyone who can afford to rent.
As Bauer predicted early on, housing programs that target only the poor will lack the necessary political support to move forward. Only an integrated program that accepts the majority like Gemeindebau in Vienna would be sustainable. But the US government prioritized support for banking over construction. The 30-year mortgage was a huge financial boon for millions of Americans who took it out, profiting from federal subsidies and the nation's long upward trajectory in home prices; the instrument enticed many renters and public housing residents into homeownership and "turned many former public sector dependents into small fiscal conservatives," as Adkins, Cooper and Konings write in "The Asset Economy."
This group of middle-class homeowners are what Dartmouth economist emeritus William A. Fischel calls “homevoters”: a coalition of Americans who — knowingly or not — vote to protect their property values. They tend to oppose local development and prefer exclusive zoning — which ensures maximum appreciation and prevents their tax dollars from spreading to poorer neighborhoods. This trend, along with wage stagnation, has turned the country's housing stock into an increasingly scarce and increasingly expensive speculative asset class. It is nearly impossible to "meet the expectations of the existing group of middle-class homeowners without raising barriers to entry for the rest of society," Adkins and her colleagues write. "The policy of democratizing middle-class property has ended up undermining the conditions for its own sustainability."
I was notthe only American in Vienna looking for possible answers to the American housing crisis. I was there accompanying a delegation from New York to study the city's housing system—50 policymakers, researchers, and activists invited by Housing Justice for All, a statewide coalition of housing organizers, and Action Lab, a social movement center. One afternoon I took them on a tour of the Karl-Marx-Hof, one of the largest residential complexes in the world.
Ever since the Karl-Marx-Hof opened in 1930, it has been something of a Rorschach test – a domineering socialist monstrosity or a pioneering communitarian fortress, depending on your political perspective. As I stepped out of the subway station, the building leaped out in front of me, seven stories tall and three-quarters of a mile long, a perimeter-like block. The core of the building is cream-colored, but its red sandstone elements catch the eye - red balconies and red towers topped by poles that can fly huge banners that can be seen for miles. Its six huge archways, also red, give the complex the bourgeois appearance of an aqueduct.
Julia Anna Schranz, Ph.D. graduate of the University of Vienna and our guide, he wore Converse, jeans and a long red wool coat. She pointed to the four dark ceramic figures placed atop the arches and explained that they were personifications of enlightenment, freedom, well-being and physical culture. These decorations - commissions to increase employment in the period between the two world wars - were also seen as an investment in the aesthetics of the Gemeindebauten and a tribute to the tenants.
Schranz opened a thick iron gate that extends through an archway, and we entered a grassy courtyard—almost the size of two football fields. Painted an off-white that glistened in the morning sun, the interior was a striking contrast to the more formidable exterior.
“oveare projects,” India Walton, a community organizer from Buffalo, quipped. There was a rose garden. Children - black, brown, white - ran and screamed on the playground in the kindergarten. Walton, now in her 40s, had twins when she was just 19 and raised them while working as a nurse. Decades later, she became politically active and won the Democratic nomination for mayor of Buffalo in 2021, only to be defeated by a write-in campaign by a Democratic incumbent. Where would she be now if she had the opportunity to live in a place like this? She would have left the marriage earlier, Walton told me. "Maybe I wasn't a nurse, but a doctor." A child in kindergarten waved at her and she waved back.
When Karl-Marx-Hof was opened, 5,000 people lived in 1,400 apartments. These apartments were desired. "It had two central laundries, two communal bathrooms with bathtubs and showers, a dental clinic, a maternity hospital, a health insurance office, a library, a hostel, a post office and a pharmacy and 25 other business premises, including a restaurant and BEST's offices and showroom , the city's design and interior design consultancy," Blau writes.
Fewer than 3,000 tenants now live in the Karl-Marx-Hof - not because it is undesirable, but because the standard of living has improved, and in response, Vienna has allocated more space for the tenants. The Vienna Housing Authority believes that a family of four needs about 1,100 square meters, so it has merged some of the units to create a larger one.
An ornamental tree nodded from the balcony with the potted plants and thunderbolt. The older Austrian waved. State Assemblywoman Emily Gallagher, the Democrat who recently unseated the incumbent Democrat in the 50th Assembly District, which includes parts of Greenpoint, Williamsburg and Fort Greene, live-tweeted the tour on her phone. State Sen. Julia Salazar, a Democrat who represents the 18th state Senate District, which covers Bushwick, took notes with a gold pen on a black-paper notebook. Renette Bradley, the tenant organizer, wore a Nickelodeon shirt, overalls, a black New York cap and lavishly long false eyelashes. "Can you be paroled here?" she asked, her voice crooked and direct. This affected many of Bradley's friends and relatives who were left homeless after being released from prison as they were not allowed to join family living in public housing.
Schranz looked at her blankly.
"Can you get out of prison and live here?" Bradley repeated.
"Of course," Schranz said. "Why not? If you're out, you're out."
New Yorkers murmured. Schranz continued to look at us questioningly.
"There are about four or five issues woven into that issue that they just don't understand," said Joseph Loonam, housing campaign coordinator for VOCAL-NY, as we headed toward the laundromat. He told me that a member of his organization has been arrested more than 40 times because every time he visits his family in the Gowanus projects, he violates the terms of his plea agreement.
In the museum shop, I bought a red potholder crocheted by a local women's cooperative: a scheme from the Red Vienna era of the "three evils" sweeping Europe (Nazism, Communism, Monarchism), each represented by white arrows. Several organizers and state legislators also bought one. When the student working in the museum store said he was done, the representative suggested he could sell the potholders in the display case. "We're not used to this," the student said as he unlocked the box, apparently referring to American spending patterns. Americans must own.
Vienna succeededin curbing the desire to possess. He did this by lowering the price of land through redevelopment and rent control. In general, the beneficiaries of these land use policies are smaller Gemeindebauten (they stopped building from 2004 to 2015 and now produce only about 500 units per year) and more limited profit housing associations, whose origins predate Red Vienna and have built 3,000 to 5,000 units per year in the last four decades.
Today, income-restricted apartments make up half of the city's public housing. Housing associations with limited profit are limited to charging a cost-reflective rent. Investors - banks, insurance funds - can buy shares in housing associations with limited profits, generally to help finance the initial construction. They get a low annual interest rate on their shares. All profits above this must be reinvested in the construction of new public housing. "It creates a revolving funding stream for social housing," said Justin Kadi, professor of planning and housing at the University of Cambridge. Vienna's main expenditure on housing is now securing cheap construction financing – and the government gets that money back.
On a dark Friday, Wilhelm Andel, a tall 84-year-old in jeans and a leather jacket, met me at the Alt-Erlaa tram stop to show me around the for-profit complex where he had lived for 40 years. Alt-Erlaa is one of Vienna's largest low-income complexes, with 3,181 units in 18 futuristic towers, 23 to 27 stories high, built between 1973 and 1986. As we approached, I saw that the towers had aged surprisingly well, perhaps because green is timeless and the vegetation seemed to tumble down from the multi-level balconies. Willie chose a unit on the sixth floor. His rent for the nearly 1,200-square-foot apartment was $824 — an amount that would be reasonable in Amarillo, Texas, or Shreveport, La., but out of the question in any of the 50 largest U.S. metro areas.
Willie lived at Alt-Erlaa and enjoyed access to seven rooftop swimming pools, seven indoor pools, tennis courts, fitness centers and acclaimed art. As the rest of the delegation joined us, he led us towards one of his favorite aspects of the buildings: two murals in the lobby of another building that meditate on the role of media and work in society. They were written by the Austrian artist Alfred Hrdlicka. "They remind me of Orozco," said Dorca Reynoso, a Verizon employee, referring to the political murals by Mexican painter José Clemente Orozco. Reynos' Manhattan rent doubled in 2014 to $1,250. When her landlord again proposed a 50 percent increase in 2022, she was unable to pay and launched her organizing campaign against her landlord. "They are so beautiful," she said, looking at the pictures.
Precisely for this reason, Vienna's limited-profit and non-profit entities were the favorites of many delegates. Art and aesthetics are important. We visited a small non-profit building, a cooperative that was successfully designed and developed by strangers who responded to a newspaper ad. The top floor had a spacious roof terrace, communal kitchen, games room and sauna. "You mean I could be in the sauna while my kids are in the playroom?" said Julie Colon, a Bronx-based organizer who told me she gave birth alone while at the shelter. "This is insane." Shanti Singh, a Bay Area tenant rights activist with short, asymmetrical hair, lingers in a sunny library with tall windows and walls of honey-colored wood. "I never want to go," she said.
Overvaluation spirals inhousing, which makes those who have apartments rich and those who don't desperately poor, has brought us to the point where only something radical can solve it. The problem with housing in the US is that it is locked in as a means of building wealth, and building wealth is incompatible with affordability. One proof is the housing crisis in the USA. Even in 2017, before the pandemic, about 113 million Americans — about 35 percent of the national population — were living with a serious housing problem, such as physically inadequate housing, high costs or no housing at all, notes Alex F. Schwartz, a professor of urban planning at New School. .
Calls for a federal social housing plan in America may sound far-fetched, but make no mistake: the US government is heavily intervening in the real estate market. It's just a two-tier system, argues Gail Radford, a historian. There is generous support for wealthy homeowners and deliberately insufficient support for the lowest income households. In 2017, the United States spent $155 billion on tax breaks for homeowners and investors in rental housing and mortgage bonds, more than three times the $50 billion spent on affordable housing.
The $50 billion is nothing. In fact, public consumption per per capita on housing and community development grants higher in many American cities than in Vienna. But it seems clear that much of that money has been wasted, either through ineffective private-public partnerships like low-income housing tax credits; or through distorted vouchers; or, most questionably of all, by subsidizing homeowners, the people who need it least. "If you give everybody a demand-side subsidy, like a voucher, and there's a shortage of supply, that's going to drive up prices," Chris Herbert, director of Harvard's Joint Center for Housing Studies, told me. It costs the government more, and the landlords often pocket the profit.
Although the Gemeindebauten represented large initial state expenditures, Vienna's social housing is now self-sustaining. Guess how much of the tenant's salary goes to the program. One percent. Social housing lowers the rent on the private market by as much as 5 per cent. Vouchers may seem cheaper in the short term, but direct financing of well-regulated public and limited-profit construction is the only way to mitigate speculation and protect against ever-increasing housing costs. In 2020, New York and California spent $377 and $248 per resident, respectively, on housing construction, while Vienna spent just $124 — and about half of Vienna's spending is on low-interest financing that will be repaid and then refinanced to borrow.
Social housing programsthey existed in America before and they exist in America to this day. Local social housing programs are underway, many of which are inspired by ViennaOkrug Montgomery, Md.;Seattle;ICalifornia.And they have a long legacy in New York City, which built 66,000 affordable apartments and 69,000 for-profit housing units from 1955 to 1981 under the For-Profit Housing Corporation Act, also known as Mitchell-Lama, according to the two lawmakers, who introduced Mr. In combination withpublic housing, Mitchell-LamaThe units are the main reason economic diversity remains in the Lower East Side, Williamsburg and Chinatown.
Housing costs have been an incredible burden for many of us for so long that it's hard to imagine what it would mean to remove them from our minds. When I spoke to Peter Pilz, the politician who took over his grandmother's apartment in the Goethehof, I asked him, as I ask every Viennese tenant of social housing, what he did with all the money he saved thanks to the cheap rent. "I haven't invested a penny in the stock market," he told me. "I consider it a huge waste of time to sit in front of my computer and study what the stock market is doing. I prefer to spend my time writing, editing online newspapers, supporting interesting initiatives and having fun."
Pilz was living in Tuscany when we spoke and spent the day cycling. He stopped in Pienza to admire the small purple cathedral and taste the famous pecorino. He then cycled to Montalcino, where he drank some Brunello before returning to Bagno Vignoni for a swim. "It's my hard life," he told me. "If people don't have to fight all day to survive - if your life is safe, at least socially - you can use your energy for much more important things."
Video at top by Luca Locatelli
Maria Francescais a magazine writer and Assistant Professor of Practice in the Department of Literature and Art at Brown University. He writes about all aspects of housing.Luke Locatellijais a photographer whose work focuses on images of the environment and solutions to the climate crisis. He worked on "The Circular Economy," an impressive project that premiered in September at the Gallerie d'Italia museum in Turin, Italy.
A correction was made today
26. maj 2023
An earlier version of this article misstated the year the euro was introduced in Austria. That was 2002, not 1999.
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