The people of Vienna enjoy easy access to high-quality, affordable rental apartments. How did Austria figure it out?
In New York Times Magazine, Francesca Mari explains that it comes down to basic economics. Most Western countries subsidize housing by giving money directly to renters and homeowners, which only increases demand for housing, driving up prices and profits. In America, buying a house is more lucrative than working. Meanwhile, a third of Americans live in inadequate housing.
In Vienna, the government subsidizes the construction of “limited-profit housing,” which ensures that low-cost housing is available to almost anyone. That keeps prices low in the private housing market, too.
Why is housing in America so bad? Mari says it goes back to early American anti-Communism. After the Great Depression, Roosevelt needed to rebuild American housing, but he didn’t want to follow the socialist model of Austria. Instead, his government created huge subsidies for homeowners, including guaranteeing long-term mortgage loans for first-time buyers, which banks would otherwise never touch. This government money provided the fuel for the suburban housing boom after WWII. It also radically reshaped America’s demographic landscape, deepening segregation and inequality.