Decommodifying Housing

Imagine only paying $400 in rent. Now, imagine only paying $400 in rent and living in an apartment that is actually nice. Most Americans would not even entertain this fantasy. In February 2022, the national median rent for a one-bedroom apartment was $1,393 a month (Andrews, 2022). In 2019, minimum wage workers had to work 103 hours a week to afford an average one-bedroom apartment without being “cost-burdened,” meaning without spending more than 30% of their income on rent (Adamcyzk, 2019). However, nearly half of American renters do spend at least 30% of their income on rent (The State of the Nation’s Housing, 2018), and this can reach almost 60% in places like New York (Lightfeldt, 2015). Figure 1 below demonstrates how wage growth has been far outpaced by rent increases since the 1970s. 

Figure 1

In contrast, Vienna, Austria seems like an entirely different planet. One Viennese tenant, 52-year-old Uwe Mauch, pays only $350 a month for his one-bedroom apartment. As a journalist and writer, this is only 10% of his income. While this is on the low end of prices, it’s not rare for Vienna. In fact, tenants in Vienna spend an average of 27% of their income on rent (Forrest, 2018). 

How has Vienna seemingly solved the affordable housing puzzle the United States is still dealing with? There are many factors that contribute to the shortage of affordable housing in the United States. In many American cities, it is illegal to build apartments or any multi-unit building in ¾ of the city’s residential land (Badger & Bui, 2019). When single-family houses with lawns are the only legal option because concerns about property values are prioritized over access to housing, the construction of affordable housing is restricted.

This is not the primary difference between American cities and Vienna, however— Vienna’s real solution is public housing. Less than 1% of Americans live in public housing (Center on Budget and Policy Priorities, 2021). In contrast, 62% of people in Vienna live in public housing, paying an average of $470 to $600 a month “with monthly assistance payments available to those struggling to meet housing costs” (Forrest, 2018). This is because affordable housing has been a consistent priority since “Red Vienna,” the Social Democratic government of Vienna in the 1920s, and a third of the new apartments built in Vienna each year are still publicly funded or commissioned (Forrest, 2018). Social housing is “funded by income tax, corporate tax and a housing-specific contribution made by all employed citizens,” and “Vienna’s annual housing budget ― which is spent refurbishing older apartments in the city as well as building new social housing projects ― amounts to $700 million with $530 million coming from the national government” (Forrest, 2018). The Viennese government keeps rents low because it “builds thousands of new social housing units each year, ensuring that supply keeps up with demand” (Schweitzer, 2020), and “the low rents in the social-housing sector also keep the rents in the private sector low” (Peacher, 2021).

According to Uwe Mauch, “we have an old idea here [in Vienna] that not only rich people should live in good conditions” (Forrest, 2018). The poor can afford housing in Vienna, but you don’t have to be poor to be eligible for public housing. Anyone that makes up to ​​$53,225 a year after taxes, well over Austria’s median income of $31,500, is eligible to apply for subsidized housing in Vienna (Forrest, 2018). “Rents are regulated and tenants’ rights are strongly protected” (Forrest, 2018), and income-eligible tenants are not required to leave if their income levels increase (Vienna’s Unique Social Housing Program, n.d.). “What makes Vienna unique is that you cannot tell how much someone earns simply by looking at their home address,” says Vienna’s councilor for housing (Forrest, 2018). 

In contrast, to be eligible for public housing in America, “a family must make less than 80 percent of the local median income” (CBPP, 2021). Not only are eligibility requirements stricter than in Vienna, but efforts to provide a sufficient supply of affordable housing to those eligible can also be superficial.  Some “affordable” urban housing projects actually consist “mostly of higher-income units with a minority of low-income apartments” (Schweitzer, 2020). Similarly, public housing in America is “deeply underfunded” (CBPP, 2021) and is seen as a last resort for the poorest of the poor, and that’s by design. While visiting public housing in Ohio, former secretary of housing and urban development Ben Carson said that public housing shouldn’t be too “comfortable,” or it would encourage dependence on the government (Alcindor, 2017).  According to Peter Gowan, a senior policy associate with Democracy Collaborative, “Public housing in the United States was designed to fail. It was designed to be segregated, it was designed to be low-quality. Where a few public housing authorities tried to do it very well, it was disinvested from later on” (Schweitzer, 2020). Public housing in America is stigmatized, and opponents argue that it “spawns neighborhood social problems because it concentrates together welfare-dependent, single-parent families, whose fatherless children disproportionately turn out to be school dropouts, drug users, non-workers, and criminals,” thus “damaging local businesses and neighborhood property values” (Husock, 2003). 

However, not only is Vienna’s housing affordable, it’s been described as utopian. One argument against public housing is that public agencies do not have the capacity or experience to be real estate developers (Schuetz, 2021), but Vienna sidesteps this issue by granting project funds and land to competing developers. Municipal apartment complexes are beautifully designed, lush with greenery (as seen in figure 2), and in desirable areas because quality is ensured by the developer’s competition process, in which developers compete for their projects to be approved for public funding by a panel of “architects, landscape planners, ecologists, economists and sociologists” (The Smart Citizen contributors, 2015). This process also spurs innovative projects, such as a car-free housing project that “uses the space usually reserved for car parking for a bicycle repair shop, play areas for children and some car-sharing bays.” Another sustainable example is an experimental development that “heats homes using waste thermal water from local hot springs and recycles rainwater to flush toilets and irrigate gardens” (Forrest, 2018). 

Figure 2

Alt-Erlaa municipal housing, Vienna

Vienna can also be taken as a lesson in urban design. Eve Blau, co-director of the Harvard Mellon Urban Initiative, says that “the main takeaway from Red Vienna is not so much the financing of the public housing but how it was designed” (Blumgart, 2020). Instead of separate residential zones, as is common in the U.S., Vienna’s “housing projects were built as an extension of the city, meant to meld with and into the surroundings rather than stand apart” (Blumgart, 2020). Residents in municipal housing in Vienna speak warmly of the communities that are fostered there, with “grill parties,” for example, where residents can get to know each other (Forrest, 2018). Furthermore, “because people are not crushed by their rents like in other major cities, they have a bit more time to be creative, to study, to get involved in community work,” says one resident (Forrest, 2018). It follows that Vienna has been ranked first in quality of life by Mercer for ten consecutive years (Mercer Study, n.d.).

Some experts claim that public housing is not the most efficient policy solution. Husock argues that “dismantling the myriad government-made obstacles,” like “irrational zoning regulations,” would be enough (2003). However, the arguments that he makes against public housing are the same arguments made against ending single-family zoning— that it would bring in “unfavorables” and damage property values. The Brookings Institution claims that focusing funds on acquiring and rehabilitating existing apartments would be more cost-effective than building new ones (Schuetz, 2021), but this would not create the surplus of housing needed to lower prices. An obstacle in the U.S. that may be difficult to surmount, however, may be land prices (Hoyt & Schuetz, 2020), whereas the Viennese government was able to capitalize on the economic crisis of the 20s and buy up land for cheap (Blumgart, 2020).

Ultimately, for there to be more affordable housing, the development of more housing needs to be prioritized. This prioritization may manifest in the form of governments simply ending single-family zoning, or it may require governments to go further and take up the helm of funding housing developments themselves. Regardless, public policy needs to reflect that housing is necessary for survival and not just a vehicle for private investment. Vienna is an example of how public policies can create communities that thrive.

Edited by Jackson Pentz.

Works Cited

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