Vienna is internationally regarded as a model city for affordable housing—thanks to its tightly regulated benchmark rent system for prewar apartments and its large share of social housing, including municipal and nonprofit buildings. However, formerly affordable rents in older buildings have risen sharply in recent years. At the same time, housing is increasingly being treated as a commodity, according to “Diskurs. Das Wissenschaftsnetz.”
Social scientist Sarah Kumnig, from the Institute of Spatial Planning at TU Wien, said in a press statement on Tuesday that affordable housing is under pressure. Despite social housing and rent regulation for prewar apartments, “even in Vienna, housing is becoming more expensive,” she said. Around 80 percent of Vienna’s housing stock consists of rental units—almost half (43 percent) are social housing, and one-third (33 percent) are privately rented.
Old-Building Rents 45 Percent Higher Than A Decade Ago
About two-thirds of Vienna’s apartments are considered “Altbau,” meaning they are in buildings constructed before 1953 and thus subject to benchmark rent regulation. “Despite these relatively strong regulations covering a large portion of Vienna’s housing, average rents have risen by about 45 percent over the past ten years—from €8.40 per square meter in 2014 to €12.20 per square meter in 2024,” Kumnig said, citing Statistics Austria data.
“The city’s prewar housing plays a key role in providing homes for low-income households—but this sector has changed significantly in recent decades.” A recent study found that about one-quarter of the old-building stock was sold between 2000 and 2022, she noted. The share of commercial buyers rose steeply from 53 percent in 2000 to 92 percent in 2022.
New Property Management Strategies
Property owners have changed their management strategies for older buildings to increase profits, Kumnig said, referencing additional studies. Rental apartments are being converted into condominiums or demolished and replaced with new buildings, where regulations are weaker. This can create conflicts with existing tenants. In “conflict houses,” researchers identified practices that amounted to “displacement pressure,” meaning tenants were pushed to move out against their will.
Even though Vienna still appears to hold a special position compared to other European metropolitan areas due to its large share of socially protected rentals, the challenges are similar, said economist and professor Elisabeth Springler of the University of Applied Sciences for Business, Management and Finance (bfi Vienna). She cited factors such as the rise of short-term rentals like Airbnb, the widening gap between social and private rents, and the declining affordability of home ownership as property prices outpace income growth.
Rising Interest Rates, Misused Housing Subsidies
These problems have been worsened by higher interest rates and the lack of targeted use of provincial housing subsidies. “In Vienna, we see growing ‘financialization’ driven by rapid price dynamics,” Springler said. “To provide affordable housing—both in construction and in resale or re-letting—stronger housing policy measures are needed.”
Conditions for subsidized housing development are “difficult,” Kumnig emphasized. While nonprofit housing and municipal projects remain effective tools for creating affordable homes, the cost-recovery principle means rents are calculated based on construction and maintenance expenses. High land prices have therefore led to elevated cost-based rents in new buildings. However, for fully paid-off properties, this system allows “rents even lower than those in municipal housing.”
To curb the sharp rise in land prices, Vienna’s building code introduced a new zoning category in 2018 called “subsidized housing.” It requires that two-thirds of newly zoned land be designated for subsidized housing, even when private owners sell to commercial developers. In subsidized projects, caps are set for land and rent prices. “Further analysis will be needed to determine the actual impact of this zoning category,” Kumnig said.
