How Vienna found a unique model for low rent

Hi, I’m Mirko, chairman and co-founder of Datawrapper. This week, the data takes us to Vienna, the capital of Austria. Vienna has had a unique approach to social housing for over 100 years. Can Vienna serve as an example for other cities worldwide?

The trend of people moving to cities, especially the largest ones in their countries or regions, is a global and ongoing phenomenon. According to the United Nations, as of mid-2021, around 4.5 billion out of 7.9 billion people worldwide lived in towns or cities. By 2030, this number is expected to grow further by 700 million to reach 5.2 billion, representing 60% of the global population.^[1]

The continuous growth of city populations, particularly in large cities, poses challenges. Everything needs to keep up, including infrastructure and energy supply. However, the most significant problem is often housing, whether it’s for buying or renting.

In most attractive cities, housing costs are constantly increasing. Any level of housing expenditure beyond 30% of a household’s income is usually considered too high. In places like New York, San Francisco, London, or Paris, even 40% may not be enough to find a place. Living in these cities is difficult if you’re not very wealthy through your job or inheritance.

This is a real problem that makes life difficult for many people who cannot afford a flat or have to spend most of their available money on housing. It particularly affects young people, families, and seniors. A large portion of the population in expensive cities will always struggle, working multiple jobs while still not having enough money for dining out or leisure activities.

However, there is a notable exception to this in Vienna, the capital of Austria. The city has developed a unique social housing model over the course of a century. This model has allowed many Vienna residents to enjoy a high standard of living with remarkably low rents. While housing costs in other cities continue to rise, Vienna stands out with its affordable housing options.

Vienna's social housing model differs from initiatives in other cities in several key ways. The city has over 200,000 public housing units, accounting for about 60% of the total housing stock. No other city in Europe owns that much space. Another defining feature of Vienna's model is that rent prices are based on the tenant's income, no more than 20–25% of their monthly earnings. Rent for a typical 80m² flat can be as low as 500 to 600 euros, and for long-term residents it can go down to 250 euros.

Below in the table are a few data points to compare Vienna’s situation with New York City. This is a bit extreme, as New York is potentially the most attractive, and — as a result — one of the most expensive cities. But the data helps to put the quality of life in Vienna in perspective. The interesting part is the ratio of incomes to expenses, which show what a difference low rents make.

The side-by-side comparisons below make the difference even clearer. Of course these are averages. But many people in New York will surely experience the pressure of high rents or property prices, while many residents of Vienna pay considerably less for housing.

Vienna’s model ensures that housing stays affordable even as incomes fluctuate. Public housing in Vienna is available to a diverse range of individuals, including families, singles, and seniors. The city takes pride in promoting social housing as a viable and respectable option for all residents, regardless of their income level.

There are challenges, too: Because Vienna is growing and housing construction can not fully keep up, people coming to the city might have to wait years for a low-rent flat. One shortcoming of the rules is that flats can be handed over from parents to kids or close relatives. This can result in a situation where a well-paid lawyer lives alone in a big flat with very low rent — while a family with small children might need to wait or pay substantially more for an apartment built by private investors. Still, in comparison, Vienna is a positive example of what is possible when cities take on the challenge of housing everyone well.

Chart choices

Visualizing data with multiple underlying datapoints and models is tricky and can be quickly misleading. For example: Simply listing up prices like in the first bar chart is eye-catching. But rent prices must be put into relation to local income. Another example: Some regions in the world appear as if there are only home owners and scarcely any renters. But this doesn’t tell the full story either. Is there enough space for everyone? Can the next generation buy property too, or are high prices forcing them to stay with their parents? For a full picture of the costs of living, we need as many data points and comparisons as possible.

Data source

Numbeo is a rich collection of crowdsourced quality-of-life data, going into quite a bit of detail on costs of living for many items. However, it aims to provide information for people going on holiday or considering a move, not necessarily to inform policies and models. Accordingly, the averages on Numbeo might well differ from official averages published by a statistics office. These might be more refined, but are usually from one or two years ago.

Further reading

• Channel 4: Does Vienna Have the World's Best Council Housing? Swimming Pools, Private TV Channels & More. Video, YouTube (2020)
• The B1M: Vienna is Building a $6BN "City Within a City". Video, YouTube (2022)
• The New York Times: Lessons from a Renters' Utopia (2023)
• John Myers, Ben Southwood, Sam Bowman: The housing theory of everything. In: Works in Progress (14, September 2021)
• Dr. Michael Ludwig: Das Wiener Modell: Sozialer Wohnungsbau in Wien (in German)

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1. Source: United Nations via Destatis. ↩︎