Imagine the utopia of a tenant.
It might look like Vienna.
The growth of the housing market created a global housing crisis. What can we learn from a city that mostly avoided it?
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When Eva Schachinger married at 22, she applied to go public accommodation. Fortunately, she lived in Vienna, which has some of the best social housing in the world. It was 1968. Eva was a teacher and her husband, Klaus-Peter, was an accountant in the city's public transportation system. She grew up in a public home in the center of the city, where her grandmother lived in one of the five buildings around the courtyard, who took care of her from six in the morning until six in the evening. Eva played all day with her friends from her complex.
Her mother, who had been renting on the private market after her divorce, had also recently applied for social housing and was first offered an apartment in 1971. At the time, Eva had a young daughter and her mother decided that she had to tease Eva more and offered it to her. The available unit was located at Station 21, in the northeast corner of the city. Eva's father-in-law warned her, not entirely jokingly, that they would be the first to be occupied by the Russians. But she and Klaus-Peter liked the layout: Although the apartment was cheap at 732 square meters, it had two bedrooms, a living room, a dining room, a bathroom and laundry room, and a balcony. The rent was 700 shillings. (That's about $55, though the coin wasn't introduced until 1999.) Eva transferred her teaching job to District 21, to a school a 15-minute walk from her new apartment.
When I met Eva late last year, she looked good in a jean jacket with a silk scarf neatly knotted around her neck, tiny dangling earrings, and short curly hair. Over the past 44 years, while teaching fifth through eighth grade English, Eva's rent has nearly quintupled, from $55 to $270, but her salary has increased more than 20 times, from $150 to $200. 3375 euros per month. Vienna law dictates that public housing rents can only increase with inflation, and only when the annual inflation rate exceeds 5 percent. When she retired in 2007, Eve's rent was only 8 percent of her income. Since her husband earned 4,000 euros a month, her rent amounted to 3.6 percent of her total income.
This is in large part what Vienna was striving for in 1919, when the city began planning its world-famous municipal buildings, known as the Gemeindebauten. Before World War I, Vienna had some of the worst living conditions in Europe, notes Eve Blau in her book "The Architecture of Red Vienna." Many working-class families had to hire boarders or pensioners (day and night workers who slept in the same bed at different times) to pay the rent. But between 1923 and 1934, a period known as Red Vienna, the ruling Social Democratic Party built 64,000 new units in 400 apartment blocks, increasing the city's housing supply by 10 percent. Some 200,000 people, one tenth of the population, were housed in these buildings, with a rent of 3.5 per cent of the average income of a semi-skilled worker, enough to cover the costs of maintenance and operation.
Experts call Vienna's Gemeindebauten "social housing," a term that suggests the city's public housing and other limited-benefit housing is a broad social benefit: Gemeindebauten welcomes the middle class, not just the poor . In Vienna, up to 80 percent of the population is entitled to public housing, and once you have a contract, it never ends, even if you get rich. Housing experts believe this approach leads to greater economic diversity within public housing and better outcomes for the people who live in it.
In 2015, before buying the apartment on the private market, the Schachingers earned about 80,000 euros ($87,000) a year, which is about the income of the average American household in 2021. Eva and Klaus-Peter paid 26%. and 29% in income tax, respectively, but only 4 percent of their pre-tax income went toward rent, which is about what the average American household spends on dining out and half a percentage point less than what the average American spends on "entertainment." Even if the Schachingers were to win a new contract for their unit today, their monthly payments would be about $542, or just 8 percent of their income. The generous supply of social housing in Vienna helps to reduce costs for everyone: in 2021, Viennese citizens living in private houses spent 26 percent of theirafter taxrental income and energy costs are average, only slightly above the figure for social housing overall (22 percent). Meanwhile, 49 percent of US renters (21.6 million people) face costs, with landlords paying more than 30 percent of their income.preloadincome, and in expensive cities the percentage may be higher. In New York, the average renting household spends a whopping 36 percent of their expensespreloadannuity income.
In the eyes of Americans, the general structure of Vienna can seem fantastically socialist. But putting that aside, what is striking is how social housing is completely reshaping economic life in Vienna. Imagine if your living expenses were more like Schachinger's. Imagine having to think about it the same way you think about restaurant options or streaming service subscriptions. Also, imagine where the rest of your income would go if you spent a lot less on housing. Vienna invites us to imagine a world where owning a home is not the only way to ensure a secure future, and what our lives could be like as a result.
write about lifeI got depressed in the United States. I'm the one scolding me at dinner, disgusted by the big investors who speculate in the housing market, yes, but also by the thousands of small investors -including some of my friends- who pool money to buy houses in the states that never I have not seen or bought real estate for rent in gentrifying neighborhoods. But it's hard to argue with the math. Buying a house close to work is more profitable than working. Growth in asset values has outpaced the return on labor for four decades, and a McKinsey report found that the majority of those assets, 68 percent, are real estate. Last year, one in four home sales went to someone who had no intention of living there. These investors are particularly incentivized to buy the types of homes that first-time buyers need most: low-cost homes generate the most cash flow from rental income.
Real estate is where money literally grows on the rafters. Over the past decade, the typical single-family homeowner has accumulated nearly $200,000 in appraised value. "Another word for asset valuation is inflation," write scholars Lisa Adkins, Melinda Cooper, and Martijn Konings in "The Asset Economy," "an increase in the value of money without any corresponding change in the nature of the asset itself or the conditions of its production that would make it more scarce or justify a greater demand for it." This inflation creates an insidious gap between owner and owner in the housing market. The Harvard Joint Center for Housing Studies found that in 2019, net worth average US renters was just 2.5 percent of median homeowners' net worth: $6,270 vs. $254,900. Last year, when higher interest rates slowed home sales and caused prices to stagnate (and even softening in some overheated cities), the median rental sales price in the US has reached a record $2,000 a month, according to Redfin.Inflated rents line landlords' pockets while preventing them from renters save for a down payment or get off the conveyor belt first.
The astronomical rate of appreciation is the culmination of decades of policies designed to encourage home buying. The 30-year fixed-rate mortgage is a uniquely American invention, made possible only because the federal government underwrites the debt: if the borrower defaults, the government is on the hook. (Only one other country, Denmark, offers the same tool.) Then there's our tax code, which allows people wealthy enough to buy houses and itemize their deductions for the interest they pay on their mortgages. Write: The larger the mortgage, the larger the deduction. Homeowners can also deduct up to $10,000 in property taxes from their federal taxes, and if they sell their primary residence, they can avoid paying capital gains on gains of up to $250,000 per person ($500,000 for couples). As housing activists like to point out, everyone with a mortgage lives in social housing.
Concerned by the apparent persistence of these problems, last year I began looking outside of the United States for solutions. Could rent control, like in Berlin, be the answer? It may have seemed that way a decade ago, before investors and new residents flocked to the city, causing land values to rise fivefold; now, despite rent stabilization laws, even apartments that no one else wanted to buy 15 years ago are generating huge amounts of money. Many residents with affordable rents are stuck because moving would be too expensive or too competitive. Frustrated by the tight housing market, tenant organizers recently proposed a "repossession" measure, asking landlords with more than 3,000 units to sell their properties to the government at below-market prices. In a referendum in 2021, 59 percent of Berliners voted in favor, but it is unclear if it will ever be introduced.
Could the answer be to relax destination restrictions, as Tokyo did in 2002? That certainly helped. In 2014, more construction took place in the city than in all of England. Since then, house prices have stabilized. Tokyo is widely held as a model by YIMBYs (members of the yes, in my backyard movement) because they like the market-driven approach to housing abundance. They often point out that the city builds five times as many homes per capita as California. But Japan is a very different market for earthquake risk: As regulatory codes and mitigation technologies continue to improve, structures often depreciate completely within 35 years. Older homes often go unmaintained because there is little expectation that the investment will recover after resale; They look like used clothes or cars: it is sold at a loss.
Auckland, New Zealand, may seem a more apt example. In 2016, a city that has one of the most expensive real estate markets in the world,"improved" 75 percent of its residential lots,increase legal capacity for housing by approximately 300 percent in an effort to encourage multi-family housing and lower prices. In areas that were upgraded, the total number of building permits issued (a method of evaluating new construction) more than quadrupled between 2016 and 2021. As expected, the relative value of undeveloped land increased as suddenly more homes became available, and the relative value of units in densely populated areas fell, cushioning the skyrocketing price. But there are limits to what upzoning can do. The benefits of allowing higher density are often exploited by developers, who price new units well above cost. It does not provide security for tenants and does not immediately create the type of housing that is most needed: affordable housing.
This is what distinguishes Vienna. Perhaps no other developed city has done more to protect residents from the commodification of housing. In Vienna, 43 percent of all apartments are isolated from the market, meaning rents 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 housing for a wide range of incomes. The average gross household income in Vienna is €57,700 per year, but anyone earning less than €70,000 is eligible for a Gemeindebau unit. Once you're in, you never have to leave. It doesn't matter if you earn more. The government will never check your salary again. Two-thirds of the city's rental properties are under rent control and all tenants are eligible for eviction protection. Such rules, combined with a broad offering, provide renters with a level of stability comparable to US owner-occupiers with fixed mortgages. This is the reason why 80 percent of all households in Vienna decide to rent.
The main difference is that Vienna prioritizes subsidizing construction, while the United States prioritizes subsidizing people, such as housing vouchers. One model focuses on supply, the other on demand. The choice of Vienna illustrates a fundamental economic reality, namely that a sufficient supply of social housing offers a market-based alternative that improves housing for all.
last one afternoonIn the fall, I walked through the center of Vienna, past ornate buildings with balconies, balustrades and lace porches, private apartments from the 19th century. They were interspersed with social housing blocks from the 1920s and 1930s: Gemeindebauten, which are known not only for their Art Nouveau architecture, but also for the triumphant red block letters on their facades, announcing:It was built by the municipality of Vienna in 1925-1926. with the means of the apartment tax. ("He built the city of Vienna in 1925-1926 with money from the housing tax"). Political genius, I thought as I waited for the tram: explanation and publicity. Half an hour later I was in the 21st district, the 'Russian area' where Eva Schachinger lived. Wohnpartner, the city office that promotes community within Gemeindebauten and helps resolve lease disputes, held an open house at her former building, a flat, minimalist complex with orange elevator shafts.
I followed the signs to Wohnpartner and found the glass walled community center and went inside. Most of those present were mothers with young children or retirees. There was a boyar station, table tennis and a plant exchange. People brought their used stuff to give away, and a millennial Wohnpartner employee offered tech support that surprisingly no one needed. Among the permanent sets were a library filled with free books and a play area with an assortment of wooden toys.
I sat with Eva in the shared kitchen, where someone had cooked a large pot of pumpkin soup. (Some Red Vienna planners hoped to centralize the kitchen in communal facilities with industrial machines, but the fascists were first, and then, under capitalism, Austrian families quickly got used to building their own KitchenAids, Vitamixes, and Nespresso machines.) Since her retirement. , Eva has worked with Malyuun Badeed, the caretaker, on a semi-annual magazine for the complex that includes a recipe and crossword puzzle, along with the latest community news. Badeed, who was with us in the kitchen, wore a black hijab with pearls and waved her arms as she said that she left Somalia as a single mother in the 1990s. When she first came to Vienna, she sold newspapers. on the street; she now she helped produce one.
Eva told me that she often returned to the Gemeindebau to teach the students of the complex with a woman named Edith, an elderly neighbor who lived in a nearby Gemeindebau. Edith's neighbors help her buy and deliver groceries that are difficult for her to transport. In return, she watches over her three children. When Eva called to wish her a Merry Christmas, Edith was packing 40 presents for the three children; she hid them in her apartment so they wouldn't be found until Santa came to visit. "Gemeindebau is a place where you socialize," Eva liked to tell me, and that's how socializing is through the generations.
I learned that the average wait time to get a Gemeindebau is about two years (there are about 12,000 people on the waiting list at any given time, and about 10,000 or more people join each year). Residents of Vienna, anyone who has had a permanent address for two years, regardless of whether they are a citizen or not, can apply, and applications are evaluated on a case-by-case basis. Florian Kogler, a 21-year-old student, was deemed an emergency because he lived with his mother, his stepfather and two of his brothers in a cramped two-bedroom apartment. He shared a room with his brother and his parents slept in the living room. He also got an advantage because he moved into his own apartment for the first time. Kogler was offered an apartment within a month. "That's unusually fast," he told me.
Applicants may reject up to two units; if they reject the third party, they have to reapply. Kogler took the first apartment offered, a bright 35-square-meter studio overlooking a playground in the central 12th arrondissement. It costs 350 euros per month; his monthly income from part-time work at the museum amounts to about 1,000 euros. Those who need extra help paying rent receive individual subsidies. Students under 25, like Kogler, are eligible for 200 euros per month.
Every few years there is a debate over whether the wealthy should be forced to give up their Gemeindebau leases or whether the units should be means tested. The face of this debate for some is Peter Pilz, a former member of Austria's Green Party in parliament. Pilz lives in the Goethehof, one of the largest Gemeindebauten on the Danube. He moved into the apartment as a student to live with his grandmother, who had been there since the building opened in 1932. Before she died, he took over his lease. (He was, one might say, a grandmother.) Pilz was elected to parliament in 1986 and eventually began earning more than $8,000 a month.
Even in Vienna, Pilz's rent drew attention and made headlines in Austria's conservative newspaper Österreich, which claimed in 2012 that he paid just €66.18 a month in rent. (Pilz says he was paying nearly €250 a month, including construction costs.) "Since Pilz's income is well above the usual rate for social housing, it seems that we are talking about social fraud here," said the general secretary of the conservative Sloboda. . Austrian party.
Pilz did not do anything illegal. Once he enters the Gemeindebau, he never has to leave. But isn't it ethical for the rich to stay? City housing officials note that wealthier tenants in Gemeindebauten help offset problems associated with concentrated poverty, creating a more stable and healthy environment for all. Unlike the United States, where public housing is only for the very poor (residents' median annual household income was $15,219 in 2019, well below the federal poverty line of $16,910 for a family of two ), the relative integration of Gemeindebauten means that they are not stigmatized.
This does not mean that they are free of problems. Noomi Anyanwu, the 23-year-old founder of Black Voices Austria, told me that she grew up in Gemeindebau with an Austrian mother and a Nigerian father. When she was no more than 5 years old, a slightly older white boy from the complex called his brother a racial slur while everyone else was playing on the playground. The parents overheard the discussion and went down to the patio. But the white father did not apologize; he doubled over and repeated what his son had told him. Just a few years later, Anyanwu said, her father left the country due to discrimination at work and racist treatment by the police.
So I was surprised when Anyanwu told me that his experience with social housing was generally positive. Gemeindebau was his own town within the city, he said. She estimated that 50 percent of her neighbors in Gemeindebau were immigrants, "it's a reflection of society," he told me. (Vienna actually has a slightly higher percentage of foreign-born residents than New York City.) A girl her age named Safiya lived in the apartment across the street and would become her best friend. Safiya's father was also from Africa, from Somalia, and he also left because of racism. But the accessibility of the Gemeindebau allowed the girls' mothers to maintain stability.
Esra Ozmen, the daughter of Turkish immigrants, grew up in Sandleitenhof, one of the largest Geimendebauten, with courtyards and mansion-like stonework. As an adult, she moved into her own Gemeindebau studio. Ozmen says her affordable housing gave him the stability to study for her Ph.D. her in visual arts while pursuing a career as a rapper. She earns 1,000 to 2,000 euros a month for holding and organizing cultural events. "I have a car", she told me herself. “90s A-Class Mercedes. Whatever. I drink a cup of coffee every day. I don't have a lot of money, but I live richly."
social housing asVienna may seem unimaginable in the United States. But American politicians gave it serious thought in the 1930s. After the stock market crash of 1929, the American housing market also crashed; by 1933, half of the mortgage debt had not been paid. Both the right and the left agreed that the government should intervene. The question was how. According to historian Kenneth T. Jackson in his book "Crabgrass Frontier," a typical mortgage at the time ranged from five to 10 years, with borrowers paying interest only until maturity, when either payment was due in full or the borrower refinanced. When President Franklin D. Roosevelt took office in 1933, Congress created the Homeowners Loan Corporation to purchase underwater mortgages and stabilize the housing market. In two years, H.O.L.C. restructured more than one million mortgages, representing 10 percent of all owner-occupied homes. Principal and interest were combined so that borrowers became freeholders after about 20 years of manageable payments.
But that wasn't enough to save the housing market or the economy. During the Great Depression, a quarter of all Americans were unemployed, and the construction industry was hit particularly hard. At that time, the United States needed the same thing that Vienna needed: jobs and better housing for workers. Housing is "the wheel within the wheel that drives the entire economic engine," said Roosevelt, Federal Reserve Chairman Marriner Eccles. The Federal Public Works Administration's emergency jobs program has funded the construction of some 50 new public housing complexes, including the Harlem River Houses in New York, a project that seems straight out of Vienna, with buildings inspired by the Bellas. Arts along a central patio with a kindergarten, clinic and public library.
Though the house was admired, it was expensive and shrouded in controversy, writes historian Gail Radford, who recounts the New Deal-era public housing debate in her book, "Modern Housing for America." Roosevelt wanted a housing plan that would not require the government to keep paying the bills. At the time communism was gaining momentum, he preferred to associate Americans with capitalism. The best way to do this? Broaden the homeowner base: Increase the number of Americans personally investing in real estate.
The National Housing Act of Congress of 1934 would save the housing market and establish the housing policy that defines the United States today. Provided a long-term, fixed-rate mortgage that H.O.L.C. helped present. Banks were risk averse for decades, so the Federal Housing Administration (F.H.A.) was created by law to insure mortgage debt with the full backing of the US Treasury Department, it had to be appraised by the purchase price and it had to be in a stable enough neighborhood, that is, a neighborhood that was white enough, to ensure that the government would not lose money if the borrower defaulted. The cards show F.H.A. painted neighborhoods deemed too risky for mortgage insurance red, a form of "red lining," a policy that went a long way to creating the severe racial wealth disparities that persist today. "No United States government agency has had a more powerful and pervasive influence over the American people in the past half century," Jackson writes.
But the Federal Housing Administration had no plans to meet the housing needs of low-income people. So Senator Robert Wagner, D-New York, introduced a second bill inspired by what housing scholar Catherine Bauer saw in Vienna and other European cities. As proposed, the Housing Act of 1937, which Bauer helped draft, would have included financing for the construction of low-income housing and public housing. Facing fierce opposition from the real estate industry, Wagner and Bauer agreed to five fatal compromises to pass the bill. First, support for non-profit and limited-profit cooperatives was abolished. Second, location decisions were left up to local governments, with many voters referring to public housing as the bubonic plague, as one commenter put it. Third, a provision was added for "equivalent removal" of slum property, meaning that one slum home must be vacated for every unit of new construction. (That way, public housing would not reduce homeowners' profits by increasing the total supply of units.) Fourth, public housing would benefit only those who are so poor that they can never find decent housing on the private market.
Fifth and last, construction costs were very limited. The problem with public housing in the United States today is not just that it is underfunded and poorly maintained. It's just that it wasn't well built to begin with. The doors are omitted from the closet; the interior walls were thin and cheap. At a public housing complex in Red Hook, Brooklyn, the elevator stopped by itself on each floor. As Radford writes, "Those who disliked public housing remained hostile, while the minimal buildings produced by [the United States Housing Authority] attracted new allies and put off some old ones." In fact, public housing in America is designed to fail: to be unattractive to anyone who can pay the rent.
As Bauer predicted from the start, housing programs targeted solely at the poor will lack the political support necessary to move forward. Only an integrated program, which accepted the majority, like the Viennese Gemeindebau, would be sustainable. But the US government prioritized supporting banks over construction. The 30-year mortgage was a boon financially to millions of Americans who took it out, benefiting from federal subsidies and the country's long upward trend in home prices; the tool has turned many social housing tenants and residents into landlords and "turned many former public sector dependents into petty fiscal conservatives," as Adkins, Cooper and Konings write in "The Asset Economy."
This group of middle-class homeowners is what Dartmouth economist emeritus William A. Fischel calls "home voters": a coalition of Americans who vote, knowingly or not, to protect their property values. They tend to oppose local development and favor exclusive zoning, which ensures maximum appreciation and prevents their tax dollars from spilling over into poorer neighborhoods. This trend, coupled with stagnant wages, has transformed the country's housing stock into a dwindling and increasingly expensive speculative asset class. It is nearly impossible "to meet the expectations of the existing community of middle-class homeowners without raising barriers to entry for the rest of society," Adkins and his colleagues write. "The democratization policy of middle-class property has finally undermined the conditions for its own sustainability."
I was not therethe only American in Vienna looking for possible answers to the housing crisis in the United States. I accompanied a delegation from New York to study the city's housing system: 50 legislators, researchers, and activists invited by Housing Justice for All, a statewide coalition of housing organizers, and Action Lab, a social movement center. One afternoon I joined them on a tour of the Karl-Marx-Hof, one of the largest residential complexes in the world.
Since the opening of the Karl-Marx-Hof in 1930, it has been something of a Rorschach test: a dominant socialist monstrosity or a pioneering communist stronghold, depending on the political perspective. As I came out of the subway station, a building rose up in front of me, seven stories high and three-quarters of a mile long, a perimeter block that looked like a citadel. The building's core is cream-colored, but the red sandstone elements command attention: red balconies and red towers topped with bars that can unfurl huge banners that can be seen for miles. Six huge vaulted corridors, also red, give the complex the civic status of an aqueduct.
Julia Anna Schranz, Ph.D. University of Vienna candidate and our guide, she wore Converse, jeans, and a long red wool coat. Pointing to the four sharp ceramic figures placed above the arches, she explained that they were personifications of enlightenment, freedom, well-being, and physical culture. Commissioned to increase employment in the interwar period, these decorations were also seen as an investment in Gemeindebauten's aesthetics and tenant recognition.
Schranz pushed open a thick, spiked iron gate that led through a gate and we stepped out into a grassy courtyard about the size of two football fields. Painted an off-white that gleamed in the morning sun, the interior was in stark contrast to the more formidable exterior.
“Thisthey are projects,” said India Walton, a Buffalo community organizer, wryly. There was a rose garden. Children, black, brown, white, were running and screaming in the playground next to the kindergarten. Walton, now 40, had twins when she was just 19 and raised them while she worked as a nurse. Decades later, she became politically active, winning the Democratic nomination for Buffalo mayor in 2021, only to be defeated by a write-in campaign from the incumbent Democratic Party. Where would she be now if she had the chance to live in a place like this? She would have left the marriage sooner, Walton told me. -Maybe she wasn't a nurse, she was a doctor. A boy in kindergarten greeted her and she waved back.
When the Karl-Marx-Hof opened, 5,000 people lived in 1,400 apartments. These apartments were desired. “It had two central laundries, two shared bathrooms with tubs and showers, a dental office, a maternity ward, a health insurance office, a library, a youth hostel, a post office and a pharmacy, and 25 other stores. commercial areas, including a restaurant and the offices and showroom of BEST, the city's consultation center for furnishing and interior design”, writes Blau.
Fewer than 3,000 tenants now live in the Karl-Marx-Hof, not because it is undesirable, but because the standard of living has improved, and Vienna has allocated more space to tenants in response. The Vienna Housing Authority believes that a family of four needs about 1,100 square meters, so it has combined a few units to create a larger one.
The squatter nodded from the balcony full of potted plants and thunder. An elderly Austrian waved. State Assemblywoman Emily Gallagher, a Democrat who recently ousted a Democratic incumbent in the 50th Assembly District, which includes parts of Greenpoint, Williamsburg and Fort Greene, live-tweeted the tour on her phone. State Sen. Julia Salazar, a Democrat representing Senate District 18, which covers Bushwick, took notes with a gold pen on a black paper pad. Renette Bradley, the tenant organizer, wore a Nickelodeon T-shirt, overalls, a black New York cap, and adorable long false eyelashes. "Can you get parole here?" she asked herself, her voice husky and direct from her. This affected many of Bradley's friends and family who were left homeless after being released from prison because they were not allowed to join relatives living in social housing.
Schranz looked at her blankly.
"Can you get out of jail and live here?" Bradley repeated.
"Sure," said Schranz. "Why not? When you're out, you're out."
the New Yorkers murmured. Schranz continued to look at us questioningly.
"There are four or five issues involved in that issue that they just don't understand," Joseph Loonam, VOCAL-NY's housing campaign coordinator, said as we walked to the laundromat. He told me that a member of his organization had been arrested more than 40 times for violating the terms of a plea agreement when he visited his family on the Gowanus projects.
At the museum shop, I bought a red potholder crocheted by a local women's cooperative: a Viennese-era red schematic of the "three evils" ruling Europe (Nazism, Communism, Monarchism), each represented by white arrows. . Several organizers and state legislators also purchased one. When a student who worked in the museum store said he was completely out of it, the legislator suggested that he could sell potholders in the display case. "We're not used to this," the student said as he opened his briefcase, apparently referring to US spending patterns. An American must own.
vienna succeededin curbing the desire to possess. He did this by lowering the price of land through conversion and rent control. In general, the beneficiaries of this land use policy are not so much the Gemeindebauten (they stopped building between 2004 and 2015 and now produce only about 500 homes a year) but more limited-purpose housing associations, whose origins predate the Red Vienna and have built 3,000 to 5,000 units a year for the past four decades.
Today, income-restricted housing accounts for half of the city's social housing. Limited benefit housing associations can only charge expenses. Investors (banks, insurance funds) can buy shares in housing associations for a limited profit, usually to help finance initial construction. They receive low annual interest on their shares. All profits above that must be reinvested in the construction of new social housing. "It creates a revolving stream of funds for social housing," said Justin Kadi, a professor of planning and housing at the University of Cambridge. The main cost of housing in Vienna is now cheap construction finance, and the government is paying that money back.
On a dark Friday, Wilhelm Andel, a tall 84-year-old man dressed in jeans and a leather jacket, met me at the Alt-Erlaa tram stop to show me the for-profit compound where he had lived for 40 years. Alt-Erlaa is one of Vienna's largest limited-income complexes, with 3,181 units in 18 futuristic towers, ranging from 23 to 27 stories tall, built between 1973 and 1986. As we got closer, I saw that the towers they may have aged amazingly. Well. . because green is timeless and the greenery seemed to flow from the tiered balconies. Willie chose an apartment on the sixth floor. His rent for a nearly 1,200-square-foot apartment was $824, an amount that would be reasonable in Amarillo, Texas, or Shreveport, La., but unthinkable in any of the 50 largest US metropolitan areas.
Willie lived in Alt-Erlaa and had access to seven rooftop pools, seven indoor pools, tennis courts, gyms, and acclaimed art. When the rest of the delegation joined us, he took us to one of his favorite aspects of the buildings: two murals in the lobby of another building that meditated on the role of the media and work in society. They were written by the Austrian artist Alfred Hrdlicka. “They remind me of Orozco,” says Verizon employee Dorca Reynoso, referring to the political murals by Mexican painter José Clemente Orozco. Reynos' rent in Manhattan doubled to $1,250 in 2014. When her landlord proposed another 50 percent increase in 2022, she was unable to pay and stepped up her organized campaign against her landlord. "They are so beautiful," she said, looking at the photos.
For this reason, Vienna's limited for-profit and non-profit units were favorites among delegates. Art and aesthetics are important. We visited a small non-profit building, a cooperative, that the foreigners successfully designed and developed by responding to a newspaper ad. The top floor had a large roof terrace, a shared kitchen, a games room and a sauna. "You mean I could be in the sauna while my kids are in the game room?" said Julie Colon, an organizer from the Bronx, who told me that she had only given birth while on welfare. "This is crazy." Shanti Singh, a Bay Bay tenant rights activist with short, asymmetrical hair, lingers in a sunny library with tall windows and honey-colored wooden walls. "I never want to leave," she said.
In a spiral of overvaluationHousing, which enriches homeowners and hopelessly impoverishes them, has brought us to a point where only something radical can solve the problem. The problem with housing in the United States is that it is locked in as a means of creating wealth, and wealth creation is incompatible with affordability. Proof is the housing crisis in the United States. Even in 2017, before the pandemic, about 113 million Americans (about 35% of the US population) were living with a serious housing problem, such as physically inadequate housing, high costs, or no housing at all, Alex says. F. Schwartz, professor of urbanism at the New School.
The call for a federal plan for public housing in the United States may sound far-fetched, but make no mistake: the US government is heavily intervening in the housing market. It's just a two-tier system, as historian Gail Radford argues. There is generous support for wealthy homeowners and deliberately insufficient support for lower income households. In 2017, the United States spent $155 billion in homeowner and investor tax credits on rental properties and mortgage bonds, more than triple the $50 billion spent on affordable housing.
Those 50 billion dollars are nothing. In many American cities, per capita government spending on housing and community development grants is even higher than in Vienna. But it seems clear that much of that money is being wasted, whether on ineffective public-private partnerships like the low-income housing tax credit; or through disruptive vouchers; or, worst of all, subsidizing the owners, those who least need it. "If you give everyone a demand-side subsidy, like a voucher, and there's a shortage of supply, prices will go up," said Chris Herbert, director general of Harvard's Joint Center for Housing Studies. It costs the state more, and tenants often keep the profits.
Although Gemeindebauten represented a large initial state expenditure, social housing in Vienna is now self-sufficient. Guess how much of the tenant's salary goes to the program. One percent. Rents in the private market are falling by up to five percent due to social housing. Vouchers may seem cheaper in the short term, but direct financing of well-regulated public buildings with limited benefits is the only way to curb speculation and hedge against rising housing costs. In 2020, New York and California spent $377 and $248 per capita, respectively, on home construction, while Vienna spent just $124, with about half of Vienna's spending going toward low-interest financing to be paid back. and then it will be borrowed again.
Social housing programsthey existed in America before, and they exist in America to this day. Local social housing programs are being developed, many of which are inspired by Vienna.Okrug Montgomery, MD.;Seattle;tuCalifornia.And they have a long legacy in New York City, which built 66,000 units of affordable housing and 69,000 units of for-profit cooperative housing between 1955 and 1981 under the Limited-Profit Housing Association Act, also known as the Mitchell- Lama by the two legislators who introduced that. In combination withpublic housing, Mitchell-Lamathe units are the main reason economic diversity continues to exist on the Lower East Side, Williamsburg, and Chinatown.
Housing costs have been an incredible burden on many of us for so long that it's hard to even imagine what it would mean to let them slip from our minds. When I spoke to Peter Pilz, the politician who took over his grandmother's apartment in the Goethehof, I asked him, like all Viennese social housing tenants, what he did with all the money he saved from cheap rent. "I haven't invested a penny in the stock market," he told me. "I consider it a huge waste of time to sit in front of my computer and study what the stock market is doing. I prefer to spend my time writing, editing online newspapers to support interesting initiatives and having fun."
Pilz was staying in Tuscany when we spoke and was biking all day. He stopped in Pienza to admire the little purple cathedral and taste the famous pecorino. He then cycled to Montalcino, where he drank some Brunello, before returning to Bagno Vignoni for a swim. "That's my hard life," he told me. "When people don't have to fight all day to survive, when your life is safe, at least in social settings, you can use your energy for much more important things."
Video above by Luca Locatelli
Francesca Mariais a magazine writer and assistant professor of practice in the department of literary arts at Brown University. She writes about all aspects of housing.lucas locatellijais a photographer whose work focuses on environmental images and solutions to the climate crisis. He worked on 'The Circular Economy', an impressive project that will premiere in September at the Gallerie d'Italia museum in Turin, Italy.
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