Affordable housing : Exploring current policies and future directions in the real estate sector in Austria, with a special focus on Vienna

Abstract

This thesis examines the evolving challenges of housing affordability in Austria, with a particular focus on Vienna, against the backdrop of rising housing costs, constrained supply and increasing socio-spatial inequalities. The analysis is based on an integrated analytical framework that draws on neoclassical, institutional and political economy approaches, allowing for a comprehensive examination of housing affordability and the complex interdependencies between markets, institutions, and policy decisions. Housing outcomes are assessed across three core dimensions: Performance, Equity, and Endurance which together provide a structured evaluation of the housing system’s ability to deliver affordable, inclusive, and financially sustainable housing over time.The analysis demonstrates that Austria’s long-standing social and limited-profit housing model continues to play a central stabilising role by moderating rent levels, supporting social mix, and cushioning households against market volatility. However, the system is increasingly strained by rising construction and land costs, declining new housing supply, demographic pressures, and growing regional disparities between urban centres and peripheral regions.These challenges are further compounded by fiscal constraints at both federal and provincial levels, which limit the capacity to expand or adapt housing subsidy schemes in response to changing market conditions.The thesis argues that maintaining Austria’s traditionally inclusive housing regime requires a shift from incremental adjustment toward more targeted and coordinated reforms. In particular, it highlights the need for improved spatial planning and land-use regulation, a modernisation of housing subsidy instruments, reforms to tenancy law, and a reassessment of financial and macroprudential regulation. Together, these measures are essential to safeguard long-term housing affordability and ensure the resilience of Austria’s housing system for future generations.