Social Housing in Vienna: Reflections from Los Angeles Housing Leaders (2024)

The Vienna Social Housing System is successful because of the multiple departments and entities that effectively collaborate to reach their common goal of supporting the wellbeing of their residents and ensuring housing as a right. Their ecosystem involves three main sectors that work together: (1) entities involved in housing development, construction, and rehabilitation, (2) departments providing social services, emergency vouchers, and supporting target populations who social housing is not currently available for, and (3) a social housing framework that provides a variety of tools for a high functioning development landscape to support quality production and maintenance of housing. In this system, private market housing prices remain relatively low to compete with the large supply of subsidized, affordable housing.

Figure 2: Vienna's Housing Model Ensures Residents are Well Supported

Figure 3: Tools that Contribute to Vienna's Successful Social Housing Production

With Wohnservice diligently enforcing tenant protections and Wohnfonds effectively managing land acquisitions and dispositions, Vienna boasts numerous agencies dedicated to promoting housing affordability for a significant portion of the city's population. This infrastructure engenders widespread support and empowerment for the public sector to realize a vision of accessible, affordable housing for all. As Bernd Riessland, Scientific Advisor, Austrian Federation of Limited-Profit Housing Associations asserts, “The public sector's strength in implementing financial systems must extend to zoning regulations... and possessing land is key to exerting power.”

Especially enlightening to field study participants was Vienna’s centralized system of connecting households to affordable units.

• Coming from Los Angeles, where families endure waiting periods of a decade or more for Section 8 vouchers and affordable housing projects resort to lotteries to select eligible residents, participants were impressed by Vienna's streamlined housing access system and relatively short wait times. While some households may wait up to a year or two for affordable housing, those with specific needs—such as overcrowded households, single parents, or individuals with mobility impairments—experience shorter wait times. While not all social housing units are part of this centralized system, all municipal and many Limited Profit Housing Association (LPHA) "smart units" are leased through this platform. The application process is accessible via an online portal, eliminating the need for in-person or phone interviews, though live support is available for those requiring assistance.

Field Study participants discussed creating social housing pilot projects that rely on strong institutions to implement the various themes discussed in this report.

Vienna funds its social housing program through the 1% income tax (“housing construction tax”) and the repayment of low-interest loans provided to past limited profit housing projects. This permanent source of funding creates a reliable and predictable basis for the planning and development of publicly-led housing construction processes. Of the approximately €450 million budgeted annually, around 60% is dedicated towards new construction in the form of loans to LPHAs, 25% is dedicated to loans and grants to private and public owners for housing rehabilitation, and about 15% is dedicated to household rental subsidies.

Vienna’s housing system gives a strong preference to one-time capital contributions to offset the cost of development rather than monthly rent subsidies. While this scheme requires more upfront public subsidies, it results in permanently affordable housing without ongoing public funding. From the Viennese perspective, ongoing rent subsidies often subsidize developer profit, and are less cost-effective over the long term than an initial capital contribution. Rent subsidies are a small portion of Vienna’s annual housing budget and are used in Vienna to support extremely low-income households whose income falls below subsidized rent levels.

Limited Profit Housing comprises around 18-20% of Vienna’s total social housing stock. This proportion is projected to grow as municipal housing construction has declined over time and LPHAs have become the dominant form of new housing production. The LPHA housing model has a relatively simple capital stack, and unlike our Low Income Housing Tax Credits system, the financing for LPHA developments isn’t finite, as the revolving fund associated with each LPHA development grows with time.

• LPHA Bank Loans & Public Guarantees:Currently, bank loans comprise approximately 35% of the total development cost in an LPHA Project. The LPHA sector is seen as very safe, and to date, the LHPA sector has never had a default; as such, LPHAs typically receive favorable loan rates. During the past decade, extremely low interest rates have enabled many projects to move forward with almost no public subsidy as the bank rates have been lower than public debt. However, as interest rates have risen, there has been an increase in public sector guarantees of private debt, to enable reduced interest costs.
• Public Loans and Grants: LPHA projects take on public debt in the form of long-term low interest loans. During the past decade, the interest rate on public debt has been as low as 1%; however, this has increased in recent years. To address the interest rate increases, public debt may increase the amortization to 40 or 50 years. In addition, many projects in Vienna are eligible to obtain grants for energy efficiency and sustainable production from non-housing public sector agencies..
• LPHA Equity Contributions:About 25% of the capital stack is an equity contribution by the Limited Profit Housing Association. The cost-based rent financing structure limits LPHA's profit to a 2.5% return on equity. Returns above the 2.5% threshold are required to be reinvested into new projects. Over time, LPHAs have accumulated considerable equity funds that are statutorily required to be reinvested into housing. This helps ensure there is a constant supply of new LPHA housing being created.
• Tenant Contributions:LPHAs typically require tenants to contribute equity towards the cost of construction and land; when a tenant moves out, they receive their equity contribution back, minus 1% per year of tenancy. While equity contributions for rental housing seem highly unusual in an American context, in Austria, it is commonly understood that one is buying into a cooperative, and LPHA housing has many of the same protections of ownership, such as just cause eviction and rent control. This tenant contribution is part of the capital stack of the new construction, and the 1% annual fee offsets building maintenance costs. While savings are more common in Austria than in the United States, the City of Vienna does offer low cost loans to tenants who do not have sufficient funds for the tenant contribution. In some cases, tenants may purchase their LPHA unit and convert their tenant contribution into a down payment.
• Smart Units:Recognizing the tenant contribution can pose a financial barrier to tenants, Vienna requires LPHA developers to build 50% of units as SMART units. These units tend to be smaller “micro-units'' that are with efficient designs, typically under 650 square feet for a two-bedroom unit. SMART units have lower rents and lower upfront tenant contribution than the standard unit. It is important to note that these smart units are always a part of each LPHA, to ensure that income diversity exists within each building. The tenant contribution of SMART units is capped, and the city provides low-interest loans and subsidies for lower-income tenants and those with justified housing needs.
• Mixed Income Housing:The city leases SMART units based on identified housing needs, enabling targeted housing solutions for priority populations such as seniors, youth, individuals exiting incarceration, or formerly homeless individuals. Coupled with open-term lease agreements (leases without termination dates), this ensures a mix of income levels within LPHA developments, aligning with the city's social mixing objectives.

Vienna’s social housing system depends heavily on its ownership and acquisition of land through Wohnfonds Wien. Wohnfonds Wien sells or leases land to developers at below-market rates; such rates, combined with large amounts of land, allow for large-scale social housing development. Viennese representatives did note that land prices have increased since 2010, emphasizing the importance of timing in land acquisition.

Some participants recognized the limitations of large-scale land acquisition in Los Angeles given the state of the real estate market, and suggested using an expedited entitlement process to incentivize land owners to develop their parcels as an affordable deal. This solution would likely require greater research to ensure compliance with existing policies and procedures. The City of LA has taken steps in this direction through Mayor Karen Bass’s Executive Directive (ED) 1, which requires that city departments complete the review process for 100% affordable housing development within 60 days.

Introduced in 2018, Vienna’s social housing zoning category is primarily used to reclassify industrial, agricultural, and commercial land as residential land and mandates that a minimum of two-thirds of all newly classified residential land is set aside for social housing development. It also requires the City of Vienna to approve the sale of subsidized units. The social housing zoning category applies to both public and private plots of land that are rezoned to accommodate over 53,820 square feet of housing space. It does not apply retroactively to all residential property.

As the United States grapples with its history of colonization, multiple participants called for the need to engage with Indigenous tribes as part of the discussion around land acquisition, citing issues of native homelessness and the Land Back movement, which calls for acknowledgment and the return of Indigenous sovereignty over traditional territories.

• Vienna spends more than €100 million a year of its 1% housing tax, or ⅓ of what is allocated to capital costs, on preservation. City policies strictly limit the demolition of existing mid-rise multifamily housing, especially in the city’s more urban core.
• At the same time, the city incentivizes property owners to modernize these historic buildings and even add two additional stories of housing on top of existing structures. Hauskunft, a city department that is the central contact point for residential renovations, offers free consultation services and low-cost rehabilitation loans for older social and private market housing in exchange for a 15-year rent restriction. Wohnfonds Wien’s Gentle Urban Renewal Program focuses on improving the quality of housing, through improving thermal insulation (and thus reducing utility costs) and quality-of-life improvements such as increased access to open space, accessibility, children’s play areas, and major upgrades to plumbing and heating systems.
• This approach is grounded in a fundamental difference between Vienna and Los Angeles: Vienna's historic urban core still features many centuries-old mid-rise buildings accessible to transit with a development layout that prioritizes pedestrians, unlike much of Los Angeles' urban core, which is designed around car-centric transportation. Vienna's dedication to housing preservation ensures the continuation of a compact, sustainable development model that encourages low greenhouse gas emission transportation and daily activities.
• Participants reflected on the innovative model of simultaneously adding density to existing housing while creating ongoing affordability and suggested focusing more on preservation in Los Angeles, such as having more dedicated funding for preservation and clear goals for rehabilitation and renovation while ensuring that tenants remain in place.

Through MieterHilfe, the Wohnservice department responsible for educating residents on Vienna’s tenancy law, the city provides guidance on the categories below.

• Rent control: Regulated by federal Austrian law and primarily affects many apartments, particularly those in the older housing stock built before 1945. Private for-profit rentals constitute 33% of Vienna's total housing stock, with three-quarters of these rentals benefiting from renter protections (refer to Vienna’s Housing Types graphic for details). An intriguing resource available to renters is an online portal that provides information on the allowable rent for specific addresses.
• Eviction prevention: All evictions must be referred to a department within the City of Vienna, and the process of removing a tenant generally takes six months. Vienna had about 4,000 approved evictions in 2022, or about five evictions per 1,000 renter households; in contrast, the city of Los Angeles has seen an estimated 24,000 evictions filed in 2023, about six times Vienna’s rate.
• Maintenance obligation: The city ensures buildings are well-maintained. Maintenance work is supported by part of the rent paid by tenants in LPHAs, which goes towards a renovation and rehabilitation fund for the building. Wohnfonds Wien’s Gentle Urban Renewal program additionally offers rehabilitation services and free consultation services to maintain building quality, including for the private housing stock.
• Eviction defense and Legal advice: MieterHilfe provides free legal advice for tenants to navigate disputes and other issues and provides consultation for tenants facing eviction.
• Tenant anti-harassment protections: MieterHilfe also coordinates legal resources and manages a fund to support tenants facing harassment by their landlords.

Participants reflected on how these protections come from an environment with a strong public sector that has the ability to enforce the protections and hold bad actors accountable.

Wohnservice’s Wohnberatung Wien department oversees housing navigation and lease-up for social housing units. Low- and moderate-income residents work with the agency to secure an affordable, suitably sized apartment through a centralized leasing system. Those with greater needs, such as single parents, overcrowded households, or people with mobility limitations, are given priority in placement.

• Participants acknowledged a key shortcoming of this system is that it is largely closed to new migrants to Vienna due to residency eligibility requirements. Despite this, it was helpful to see a single point of contact for securing affordable housing.

Staff within Wohnpartner work with communities to promote neighborhood involvement and to mediate conflicts. Residents can be engaged in opportunities to beautify their neighborhood, connect with existing residents, and participate in other community activities. Trained staff are also available to mediate disputes between neighbors. Wohnpartner makes it a policy to employ staff with racial, gender, and age diversity that mirrors Vienna’s broader society to ensure effective outreach and conflict resolution strategies.

The Chamber of Labor represents all workers, and is the worker analog to the business community’s representative agency, the Chamber of Commerce. The Chamber of Labor has a variety of responsibilities and lines of action to represent the interests of working people in the country, one of which is an 11-person team that focuses on housing law. This team provides legal consultations and representation for working households, typically who have a legal dispute with their landlord. This group often represents groups of tenants with particularly problematic landlords, cases that would set precedent and impact broader housing law and implementation, and does not generally intervene in individual landlord-tenant disputes. The team also consults with lawmakers on creating new housing policies and laws.

• In Vienna, social housing has a broad base of support. Unlike affordable housing in the United States, social housing aims to provide housing stability for the middle class in addition to providing affordable housing for lower-income households. Another important feature is that households must only qualify once to get into social housing. After that, residents have the right to remain permanently in the housing with rent increases. Housing experts believe that this approach leads to greater economic diversity, wealth building and better outcomes overall for people living in social housing.
  • Approximately 80% of Vienna’s residents are eligible for social housing. Although the income eligibility calculations differ, in Los Angeles, households are eligible for most affordable housing if they earn up to 60% of area median income (AMI), while in Vienna, this upper limit is closer to 180%-200% of AMI .
  • In Vienna, income is only checked at initial leasing. If a household’s income increases above the eligibility threshold, they do not lose access to their housing or their affordable rent.
  • To ensure moderate-income households do not crowd out lower-income households, Vienna has a needs-based system of allocating lower-cost units. This is driven through a centralized system of tenant placement, discussed further in key takeaway on support for tenants .
  • Participants reflected on how this broad base of beneficiaries from the housing systems creates substantial support for this model.
  • The social housing system does exclude new migrants to Vienna, as noted in the Race and Immigration section within “Vienna’s housing Ecosystem” section.

• Intentional planning and design elements attempt to accommodate a wide variety of residents who qualify for the mix of incomes, household sizes, and types.
  • Participants noted how the needs of many are considered in housing projects, which often have playgrounds for children, plentiful accommodations for people with mobility impairments, programming for collective activities, various considerations for seniors, and more.

• As projects rely on a higher income threshold, they receive accordingly higher rents from some units. “Sustained Funding” within the Housing Ecosystem section explores this in more depth.
  • In reflecting on the social mixing policy, participants discussed how this policy enables more stable project financing through greater rental income than what would be expected in a 100% affordable project in Los Angeles.

• The Vienna Social Housing Model has an ideological commitment to social integration. As such, the city does not seem to have major ethnic enclaves in the way Los Angeles does.
  • Recognizing these differences, Field Study participants identified Los Angeles’ neighborhoods with concentrations of distinct ethnic communities as a definite strength that should be built on through a social housing system.

Limited Profit Housing Association (LPHA) units are developed by cooperative housing associations and in some cases structured as Limited Liability Companies (LLCs) similar to affordable housing developments in the United States. The LPHAs are mandated by Austrian law to reinvest all proceeds from housing projects at a predetermined percentage of their profits into additional housing production. Rents are tied to construction costs, with no increases beyond inflation and maintenance expenses. These rental agreements have no expiration date, allowing households to remain indefinitely. Offering perpetually affordable rents, accessible to both middle and low-income earners, LPHA units represent the predominant form of social housing in Vienna, constituting approximately 18% of the city's housing stock. This model underscores the necessity of collaboration between the private and public sectors and is further elaborated in the "Ensure Permanent Funding and Simplified Capital Stack" and "Limited Profit Housing" sections of the Vienna Housing Ecosystem.

The largest form of social housing in Vienna is municipally-owned housing (about 22% of total housing stock). Dating back to the inter-war period, significant investments have been made in renovating the aging housing stock. Unlike limited profit housing, municipally-owned housing offers more accessible entry requirements (with no upper income limit). Rents are regulated by law, ensuring perpetual affordability. Similar to LPHA units, income verification is conducted only upon entry, and with no contract termination date, families can reside for as long as desired, fostering mixed-income communities.

To foster greater social cohesion and community engagement, the City of Vienna provides residents funded opportunities for resident projects such as community gardens and events. Social services are provided to mediate conflict between tenants and is an essential role in ensuring that mixed-income municipal housing functions in municipal housing.

Vienna’s housing model challenges conventional notions of wealth-building, especially in comparison to the United States approach. While real estate often serves as a means of intergenerational wealth transfer in the United States, Vienna's social housing system enables tenants to pass on their leases to their children as inheritance. Moreover, the affordability and stability provided by social housing in Vienna offer residents various avenues for wealth accumulation beyond property ownership, fostering a unique approach to economic prosperity.

A recent study by the Austrian Institute of Economic Research (WIFO) and the Federation of Limited-Profit Housing Associations found that Vienna’s generous supply of social housing has a price-dampening effect on the entire housing market. In 2021, 18% of Viennese were rent burdened (defined as more than 40% of post-tax income spent on rent) compared to 58% in LA City and 57% in LA County (defined as more than 30% of pre-tax income spent on rent). This difference in rent burden allows the Viennese to save or invest more income for wealth generation. Bernd Reissland, Scientific Advisor, Austrian Federation of Limited-Profit Housing Associations, noted that “we try to bring down the motivation for buying” by not crediting social housing rent towards the purchase of the property to reduce future speculation on property. “We don’t see housing as a lucrative source of income,” added Wohnservice’s chief, Josef Cser.