Lessons From a Renter's Utopia

Francesca Mari wrote about Vienna and socialized housing for the New York Times Magazine.

That’s what differentiates Vienna. Perhaps no other developed city has done more to protect residents from the commodification of housing. In Vienna, 43 percent of all housing is insulated from the market, meaning the rental prices reflect costs or rates 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 mean gross household income in Vienna is 57,700 euros a year, but any person who makes under 70,000 euros qualifies for a Gemeindebau unit. Once in, you never have to leave. It doesn’t matter if you start earning more. The government never checks your salary again. Two-thirds of the city’s rental housing is covered by rent control, and all tenants have just-cause eviction protections. Such regulations, when coupled with adequate supply, give renters a level of stability comparable to American owners with fixed mortgages. As a result, 80 percent of all households in Vienna choose to rent.

The key difference is that Vienna prioritizes subsidizing construction, while the United States prioritizes subsidizing people, with things like housing vouchers. One model focuses on supply, the other on demand. Vienna’s choice illustrates a fundamental economic reality, which is that a large-enough supply of social housing offers a market alternative that improves housing for all.