The Vienna model for housing sanity

No housing shortage, no waiting lists, no Ponzi scheme-like market scramble. Can Vancouver learn anything from the Austrian way?

Theglobeandmail.com
May 26, 2017
By Frances Rula

Vancouver and Vienna often end up on the top of the “most liveable cities” lists, ranked highly for their quality of life, air, health care and education.

But the two couldn’t be more different in one crucial aspect.

Vancouver is a region racked by the negative effects of spiralling real-estate prices and rents, with people bitterly divided over the causes and solutions amid warnings that young people’s futures, businesses and urban life are being seriously damaged.

In Vienna, 60 per cent of the population lives in social housing and rents are set so that people pay no more than 30 per cent of their income. There is no housing shortage, no years-long waiting lists for subsidized housing, no mad scramble to pour money into a real estate market that feels like a Ponzi scheme.

When the city releases land for new development, architects, developers and non-profit groups compete to come up with designs that demonstrate how they will create attractive living spaces and a socially integrated community.

This month, Vancouverites are getting a chance to look closely at what’s called the Vienna model and talk about whether one city could learn lessons from the other.

The Museum of Vancouver is hosting the travelling exhibit the Austrian government has sponsored on the Vienna model - recently arrived from New York, where it was popular - and a series of debates and tours has been organized around that. In a city desperate for solutions, that’s generated a lot of public interest.

“This is something to help a discussion of housing as a public good,” says Sabine Bitter, an artist and professor at Simon Fraser University who helped bring the exhibition to Vancouver. “It’s a way of showing how people can organize their life in the city differently.”

The question is what exactly can Vancouver take away from Vienna?

Vienna gets €450-million ($676.7-million) a year from the Austrian government for housing and the city adds to that through special housing taxes - it has broader taxation powers than Canadian cities - that bring the yearly housing budget up to about $900-million a year. In comparison, Canada spends about $2-billion annually for the entire country. British Columbia spends about $630-million a year for the whole province.

Vienna, which is a state as well as a city, also owns a huge amount of land and is home to a network of large, established housing non-profits that have developed their own portfolios and expertise.

And it has been building up its social-housing stock for 100 years, since a socialist “Red Vienna” adopted an aggressive plan for housing people after the Austro-Hungarian empire collapsed at the end of the First World War.

“Vienna is not Vancouver,” admits Thom Armstrong, the executive director of the Co-operative Housing Federation of B.C. But, he says, Vienna’s lesson for Vancouver still holds true: Governments should hang on to the land that they have and use it to maximize the amount of low-cost housing in a city.

“If your treat your government equity in land properly, then you can make a serious dent in supply,” Mr. Armstrong argued in one of the recent public debates on the issue.

That means not doing what B.C. has done recently, such as selling off large tracts of land - one example is the 10-hectare Pearson Dogwood lands in the city of Vancouver, owned by the local health authority - to the developer who pays the highest price, with no conditions attached. It’s then left to the city to try, through zoning and negotiation, to extract some benefits, such as low-cost housing, for the community.

“We just can’t have that kind of thing happening,” said Mr. Armstrong. “We need to deploy that kind of resource intelligently.”

Vancouver’s director of housing policy, Abi Bond, also says Vienna provides lessons in showing that solving housing problems takes “a solid vision over a long period of changes in a city – it’s a marathon, not a sprint.”

Activists in North America often view additions to subsidized housing in stressed cities as completely inadequate because they don’t solve the problem instantly.

But, Ms. Bond said, the Vienna model shows what happens when different levels of government, aligned on a problem, grind away steadily over decades to eventually make a significant difference in housing reality.

She also thinks that Vienna’s approach to offering land for development - asking architects and developers to put their creativity into coming up with projects that aim for “mixed income, mixed tenure with high urban design” – is one that Vancouver could consider.

There are some who’ve argued during public debates that Vancouver should not be so timid and adopt the Vienna model wholesale. One local political party, the Coalition of Progressive Electors, proposed the Vienna model as its housing program during the 2014 civic election.

Wendy Pedersen, a long-time housing activist in the Downtown Eastside, said local city politicians need to get much more aggressive in demanding support from the federal and provincial governments and in giving land for social housing.

“They should tell developers they won’t get a single rezoning until those governments put money in.” If developers put pressure on other levels of government, things would change, she said.

Ms. Pedersen acknowledges there’s a lot of catching up to do. Even in the Vancouver region, social housing accounts for only 15 per cent of the available rental stock, slightly more than the national average.

“We’ve gone so far with the market model, so much land has been privatized that we’d have to do a lot of buying back.”

But others have argued in public debates that it’s just not feasible for any Canadian city to come up with the massive subsidies it would take to solve housing problems through government-supported programs.

That’s especially true in Vancouver.

“We’ve got tremendous land scarcity here, more so than in Vienna,” argued UBC professor Tom Davidoff, a real estate specialist in the Sauder School of Business. “And given that demand outstrips supply, you’re just giving to one person over another.”

Architect Antonio Gomez-Palacio, based in Toronto at the firm DIALOG but working in cities throughout Canada, also said that there’s just too big a problem to solve when 44 per cent of renters in B.C. are paying more than 30 per cent of their income – a level usually regarded as the maximum for affordability – for rent.

“If we’re going to significantly address this, we need a much bigger strategy than subsidized housing.”

Instead, he said, there needs to be a combination of intelligent planning and some market solutions. That means, for example, making sure that lots of housing is built near transit and community services, so that people can save themselves the expense of running one or more cars.

“It’s about changing lifestyles by providing a great public realm.”

Mr. Gomez-Palacio and Ms. Bond also pointed out that no model in the world, no matter how good, can be transferred to another city wholesale.

Vienna not only has more money, but it has different zoning, a culture where the majority of the population is comfortable living in multifamily housing and a government that is able to impose decisions on the public with less blowback than would happen in a North American city.

(Vienna isn’t perfect, either. A 2014 article by the San Francisco Public Press noted that it is sometimes criticized as a top-down model, with little citizen participation. As well, recent trends indicate that segregation is showing up in developments, with immigrants and seniors tending to get stuck in the older projects.)

“It doesn’t necessarily give you easy answers that you can plug and play,” said Ms. Bond.

But, she said, cities around the world are responding to a wave of housing stress and that’s making everyone look at what everyone else is doing to find adaptable solutions, without necessarily copying outright.

One of the key elements of the Vienna program that many like: ensuring that the housing produced and rented responds to local incomes, not just vague market demand that can be driven by investors.

Now, she and others just have to figure out how to translate that to their local markets.