The government’s new rent and housing package has met with strong resistance during the review process. According to the Supreme Court (OGH), the proposed measures—such as extending the minimum lease term—would make tenancy law more complex. The Economic Chamber, the Federation of Austrian Industries (IV), and the Association of Property and Landowners warned against such interventions in the housing market. Meanwhile, the Federation of Trade Unions (ÖGB) and the Tenants’ Association (MVÖ) argued that the reform does not go far enough.
The core elements of the package include the value adjustment of rental contracts and a cap on rent increases in the free market. In addition, the draft law provides for longer minimum fixed terms for limited rental agreements: instead of three years as before, the shortest possible lease term would now be five years. By the end of the consultation period last Friday, 38 opinions had been submitted—25 of them from institutions.
“Mainly Symptom Treatment”
The Economic Chamber (WKÖ) questioned the legal rent cap as a measure to relieve tenants amid high inflation. “The current regulation represents primarily symptom treatment, which in addition benefits only consumers,” it said in its statement. “In general, it should be noted that affordable housing arises mainly through increasing supply.”
The Federation of Austrian Industries (IV) warned of “unforeseeable consequences” for tenancy law. The savings potential for tenants, by contrast, was “limited,” the IV said in its submission. Municipalities and domestic companies would earn less, leading to negative effects on future maintenance and renovation, the group explained.
The Association of Property and Landowners (ÖHGB) expressed similar concerns. “Such interventions in the housing market endanger the long-term functioning of the private rental housing sector,” the ÖHGB emphasized. Ultimately, they would lead to a “shortage of affordable housing,” since “necessary maintenance, renovations, and new construction activities are increasingly becoming unprofitable.”
“Does Not Go Far Enough”
The Federation of Trade Unions (ÖGB) took a more reserved stance. “In some areas, the planned changes do not go far enough and will hardly improve the financial situation of many tenants,” the ÖGB cautioned. Its demand: instead of automatic inflation adjustments, “rents for all lease types—whether regulated or free market—should be allowed to increase by a maximum of two percent per year.”
Despite improvements, “the fundamental problems unfortunately remain, as the measures are not comprehensive enough,” said the Tenants’ Association (MVÖ). Its main criticism concerns fixed-term rental agreements: “While extending the minimum term provides more stability, it does not change the structural imbalance created by the practice of endless chain leases.”
