International measures to channel investment towards affordable rental housing: Austrian case study

This report is part of a research project that has been commissioned by the Western Australian Government. The project reviews international models that use public subsidies and incentives to attract large scale commercial finance to supply affordable housing. This report provides the findings of stage 2A of the research. It has engaged key local experts; interviewed financiers, providers and policy-makers and analysed evidence to assess the effectiveness of private finance in Austria.Affordable rental housing plays an integral role in Austria’s urban housing markets, especially in Vienna. It is provided by limited profit housing associations (LPHs) and cooperatives and municipal housing companies as well as private landlords. The mission of LPH is the provision of affordable rental housing, which is managed cost effectively, ensures assets are used appropriately, limits profit-making and is accountable to key stakeholders. Furthermore, it must compete for sites and subsidies with all potential developers of housing, committed to the principles of limited profit, cost rent housing.The affordable rental sector plays a positive role in many Austrian housing careers; it is not a stigmatised or residualised tenure, but rather a stepping stone, oasis and launch pad for a chain of housing moves. The sector caters for the young, when they enter the housing market; it also provides a stable home for established households and a refuge during periods of stress. Finally, it caters for the elderly who are attracted by the convenience of compact housing and the proximity of urban services. Austrians do move from the social rented sector to ownership, but they also move back by choice and when circumstances require.Austria has long pursued a supply orientated housing strategy—yet declining and now untied federal transfers and varying provincial programs may weaken this. Affordability has been promoted by reducing the cost of housing through low interest public loans and grants to ensure appropriate supply outcomes and relies far less on demand assistance than other systems. Today, public loans secure increasing levels of private finance to bridge the gap