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Affordable housing: what should social housing do?

social-residential construction

Living, especially affordable, is a central political issue - not only in Austria. Social housing should help here. But even in times of economic bottlenecks, the solitary housing subsidized by means of taxation is falling victim to many a saving pin. An international development in recent years that has sparked heated debate in the European Union. The central question: who is allowed to use social housing?

A question of competition?

In response to the pan-European debate, 2005 filed a lawsuit by the landlords' association European Property Foundation, a representative of private landlords, in Sweden to the EU's Competition Commission - because of distortions of competition from cheaper lending to privately-owned real estate developers. Tenor: Nobody in the market should be favored and gain public benefits. Not even in the context of social housing. According to the wishes of the private landlord, the landlord must either work under the same conditions or should only actually benefit the needy.
But while the Scandinavians sat down at a table and negotiated a compromise, found in the Netherlands more successful imitators. 2010 confirmed the European Commission's Dutch complaint on the issue of free competition. With consequences, as Barbara Steenbergen of the International Tenants' Association IUT, outlines: "Thus, the supply to the poorest had to be limited. It's only a matter of time before ghettos emerge. "

The Dutch case

The new rules of the game in the Netherlands: For the "Wocos", the non-profit developer, an income limit of 33.000 Euro per year (previously 38.000 Euro) - gross and now also independent of the number of inhabitants of a household. By way of comparison: In Vienna, for example, an individual income person has a net income limit of 43.970 Euro per year (two persons: 65.530 Euro ff) as a prerequisite for a subsidized rental and co-operative housing. 550.000 domestic households and about 1,25 millions of people use social housing in Austria. How many would be entitled to the subsidized housing if the income limit was lowered?
Steenbergen on the situation in the Netherlands: "650.000 households were thus immediately excluded. The rental price in Amsterdam for a 45 square meter apartment is currently around 1.000 Euro. On the outskirts, waiting times are now up to nine years. "In addition, the quality of the building also threatens to suffer enormously. Due to the reduced income limits and rents, future residential areas must also be built as cheaply as possible.

Social housing as a national goal

2011 threatened to repeat something similar in France. Once again, a private landlord company complained to the EU - but met with the resistance of the "Grande Nation": In response to the EU in May 2013 France declared social housing quickly summed up the state goal. Since then, silence has been a cause. Ownership of the national state has apparently been victorious over the EU's principle of competition. After all, the principle of subsidiarity applies to housing - it is a matter for the nation.

EU discussion on social housing

Questions that are now increasingly being discussed within the EU: In June 2013, the European Parliament approved a draft report on social housing in the European Union. A first discussion paper with many suggestions, demands and hints. What will happen? One does not know. "The Commission still has not said so", Steenbergen from the IUT also looks at democratic bottlenecks in the EU: "If everyone opposes it and the Commission still does not move, is not there a democracy deficit? Officials vote against the clear vote of the parliaments. "
For Claire Roumet, secretary-general of the European Association of Social Housing CECODHAS, the paper comes a bit too early: "I call the last 20 years the two lost decades of social housing policy. There was an increase in housing costs everywhere. Parts of the population do not have enough money for housing. "
The different interpretations of social housing are a fundamental issue, not a question of country size: "Most countries focus on the promotion of property. During the crisis, there are less funds for housing, subject subsidies are shut down. That is not sustainable. Residential buildings must be adapted accordingly, "says Roumet.
"We have written a return to public interest on the flags. I think we need to explain to those responsible how non-profit housing works. In most countries, only the liberal and totally subsidized market is known. An affordable housing supply does not work through the market. The market has the tendency to turn up prices ", Steenbergen from the international tenants' association wishes not only an expert group of the commission, but also the dissemination of the Austrian model.

The Austrian way as a model

But what makes the Austrian model in international comparison at all? Wolfgang Amann from the Austrian Research Institute for Real Estate, Construction and Housing IIBW: "We have a system with so-called integrated rental markets. This means that the commercial and social rental markets are in competition with each other. Housing looking households - except the really wealthy - both market segments are open. This leads to a beneficial price and quality competition. At the same time, social rents are only moderately below free market rents. As a result, public spending on housing promotion is below the EU15 average. "
But as everyone knows, not everything is perfect. "We have a so-called insider outsider problem. The vast majority of households with old leases live well and cheaply. But who is currently on the housing search, it has much harder. In addition, this mainly affects young households, which generally have to make do with tight budgets. In general, if you have a long planning horizon, you have a massive advantage. If you do not know where you will live in half a year, you have to pay dearly for that ", Amann outlines the current situation. In international comparison, however, Austria is, as the previous examples also show, well in price and supply.

Rent in Austria

Since the year 2009, the share of disposable household income that needs to be spent on housing costs in rental housing has risen from 23 percent to 25 percent. The development varies according to the rental category. In prime residential rents, the cost of housing increased by about three percentage points and was 2013 percent of disposable household income in 28. Housing without a pension, ie predominantly younger households, has high housing costs. It mainly affects lone persons (31 percent women, 28 men) and one-parent households (31 percent). Not least of all, how long the household already lives in the flat is essential for the amount of the share of housing costs.

Rents for prime rental apartments have increased at different rates in the individual rental segments since 2009. While the overall increase in 2009-2013 costs was at 13 percent, residential rents in the private rental sector increased by 17,2 percent, from 6,6 to 7,8 euros per square meter. Increases in co-operative housing were significantly lower at ten percent in the same period of the previous year. Municipal residences had to pay 2013 percent more than 8,3 in 2009 year.

For new contracts (up to five years of previous rental period), an average of 7,6 Euro per square meter is paid. Households that have long-term leases of more than 30 years spend 4,8 Euro including operating costs.
(Source: Statistics Austria)

Promotion & Charity

For Markus Sturm, chairman of the Association for Housing Development vwbf, the success of the Austrian housing system is based primarily on two pillars: "On the one hand, this is housing subsidies and, on the other hand, the non-profit housing industry. With the partnership-based interplay of financially well-equipped property development and socially-bound housing developers, it has been possible to significantly expand the supply of affordable housing in recent decades. "In detail: With a share of 24 percent of the total housing stock, social housing construction in Austria is in EU comparison second.
Aside from the housing supply, the system with the Gemeinnützige Wohnbauträger is also an economic factor, as Sturm emphasizes: "Due to the continuously available Wohnbeauförderungsmittel and high-equity non-profit construction associations is not only a stable new construction capacity of about one third of the total completed apartments per year but also ensures strong economic momentum. "

Non-profit developers

About every sixth inhabitant of Austria lives in an apartment built and / or managed by non-profit organizations. Currently, the non-profit housing industry manages 865.700 apartments nationwide, of which 252.800 condominiums. This corresponds to about 25 percent of the total housing stock in Austria. Thirty years ago, this share was around ten percent. 2013 were completed by the construction associations 13.720 apartments, 2014 were 16.740 new apartments.
Of the apartments currently completed around 50.000 a year, 50 percent are subsidized, 50 percent financed (previously: 70 percent / 30 percent). The subsidized apartment building is currently completely shouldered by the non-profit, the commercial developers are involved in privately financed condominium construction. (Source: GBV).

Back to earmarking

That is why it is so important to fix housing subsidies: "To secure the housing model, the reintroduction of earmarking of housing subsidies is certainly a prerequisite. If you want to maintain social housing at the usual high level, but it also needs measures to strengthen the non-profit housing companies as well as efficient tools for land acquisition for social housing. "Similarly sees the Amann IIBW:" I plead for boredom! We need continuity in the financial security of housing promotion. We need a balanced ratio of subsidized and privately financed housing. We need competitive non-profit building associations. "

Current Housing Statistics

2013 were built across Austria almost 51.000 apartments. It does not include the units to be built in Vienna by construction, conversion or construction of existing buildings. With this current number, the result was more than 16 percent higher than in the previous year. Compared to 2011, the increase was nearly 30 percent. The good completion result achieved in 2013 is mainly attributable to multi-storey residential construction, which on average generated almost half more apartments than in the previous two years (plus 36 percent compared to 2012, plus 58 percent over 2011).
(Source: Statistics Austria)

Social peace through wide access

But back to the essential question of who should now have access to social housing - and why. Sturm von vwbf: "In contrast to other countries, the subsidized housing sector is characterized by access by broad sections of the population. That has proven itself. The resulting social mix effectively prevented segregative tendencies such as in French cities (Banlieus) and thus spatially visible social stratifications with often associated social "explosives". "
With this opinion Sturm is not alone, also housing policy expert Amann recognizes in the domestic, broad access to the social housing a necessity: "The Austrian way with large public housing sectors, which are also open to the middle class, has several advantages. The coexistence of all social classes in the same homes is an immensely effective social glue. Anyone who sees himself daily and greets and knows the neighbors' children has a much better understanding of the often quite unfamiliar problems of the other "social class". As a result of social integration, there are no ghettos and no burning suburbs. Social rents are so expensive that even large-scale subsidized housing is cheaper than, for example, the housing subsidy scheme in the UK or tax incentives in the Netherlands. "
In the federal capital of Vienna, social mixing is an essential factor in housing policy. Regular top rankings as the world's most liveable city also reward this fact. Christian Kaufmann, spokesman for Wohnbaustadtrat Michael Ludwig: "We do not want concentration of social weaknesses in certain neighborhoods. That distinguishes Vienna and we want to preserve that too. Because of the Netherlands, Sweden and France, we have launched the Resolution on Social Housing Conservation, which has joined Europe's 30 cities. "

Photo / Video: Shutterstock.

Written by Helmut Melzer

As a long-time journalist, I asked myself what would actually make sense from a journalistic point of view. You can see my answer here: Option. Showing alternatives in an idealistic way - for positive developments in our society.
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