Active Citizens BC

MORE! On the Vienna housing model! The Vienna Housing Model. The decisive tool was already in place: wartime rent control, imposed so soldiers’ wives would not be thrown into the street. Rent control was never repealed. Combined with postwar inflation, that made private rental construction unprofitable and opened a window of opportunity for non market housing development. Rent control took private landlords out of the land market. Land prices fell. Rent control did not merely protect tenants. It cut the flow of labor and capital value into land Rent. Vienna’s leaders knew of Henry George’s case for a single tax on land but found a better way. They taxed apartment units instead, on a progressive scale, and kept rent control. The city then used that same tax revenue to buy the land whose price the taxes had just depressed — the result was that the city was the only serious buyer in the market when urban land became available. Vienna also invented a better way to build affordable housing. The city buys the land, sets the housing goals and publishes the subsidy. Competing nonprofit teams — architect, builder, developer, manager — submit schemes. Stakeholder juries pick the smartest one. The result is architecturally varied housing, not the barracks other anglophone countries call “public housing”. Design quality is not a luxury. It is how you keep the middle class inside the non-market system. One-fifth was social housing for the poor and disabled. The rest was for wage-earners, owned and run by co-ops and limited-profit housing associations. Those associations operate like ordinary companies except they may charge only cost-covering rents, must recycle surplus into more land or more buildings, and may pay only a capped return to shareholders. The city did not socialize production. It socialized the land under it in line with the Henry George Principle. Copying the Vienna model in cities that still worship the free market for housing would surely be contentious; but the crisis Vienna faced and the results it got are not in dispute. Jobs-rich global cities are now approaching the same level of housing precarity faced by Vienna. Rent control protects tenants, but it also makes a city’s land less appetizing to international real estate investment trusts (REITs).