In Vienna, most people live in social housing. Here's how it works

As Australia's housing crisis shows no signs of abating, one European city is having a very different experience.

In the Austrian capital Vienna, around 60 per cent of its nearly 2 million residents live in some form of social housing, where they have access to low rents, secure tenure and quality accommodation.

Meanwhile, the city consistently places very high on different city rankings, including once again topping the Economist Intelligence Unit's Global Liveability Index in June.

So how has Vienna managed to create a housing strategy that works for so many of its citizens?

It's been more than a century in the making.

Overcoming 'really dire' conditions

In the late 19th and early 20th century, Vienna was one of the premier cities of the Austro-Hungarian Empire and Europe more broadly.

It was an intellectual and artistic melting pot, with radical and wealthy streaks. But it was also a divided city.

"Many people moved into the city, but there was not enough proper housing for them," Julia Anna Schranz, a historian at the University of Vienna, tells ABC RN's Rear Vision.

Private landowners and investors took advantage of this influx, building shoddy apartments with poor design and even worse sanitation, packing workers and families in.

Bed sharing was common around the city. Shift workers would rent the same bed and sleep in it during different parts of the day or night.

"[It was] really dire for the working class," Ms Schranz says.

But then World War I changed everything.

Red Vienna

The end of World War I saw the collapse of the Austro-Hungarian Empire. Austria became a republic and the country's first elections followed.

In 1919, Vienna held its first city council election and the left-wing Social Democratic Party won in a landslide.

The period known as Red Vienna had begun.

"The city government wanted to create a new society; they really wanted to change life for the working class," Ms Schranz says.

It built libraries, swimming pools, public sports facilities and outdoor gyms, and also enacted major housing reforms — funded by increased taxes on the wealthy.

Building public housing with better living conditions than the dominant private market was a key ambition, explains Justin Kadi, an assistant professor in planning and housing at the University of Cambridge.

"[The government] had the slogan saying 'what we want is air and light'," Dr Kadi says — two things that were severely lacking in dingy working-class abodes.

The city government built "Gemeindebauten" or large-scale public housing estates.

The most famous of these is Karl Marx-Hof, named after the Communist Manifesto author.

Completed in 1930, the 1-kilometre-long structure could house thousands of people and remains one of the longest residential structures in the world.

And these buildings weren't just utilitarian — they were grand and decorative structures, designed by some of the country's most respected architects.

Kurt Hofstetter, an urban development planner with the City of Vienna, calls the bigger Gemeindebauten "palaces for workers".

Two types of social housing: Public and co-ops

World War II economically ruined and physically damaged Vienna. But in the fallout, the city's commitment to social housing remained.

"From the 1950s through to the 1970s, we saw very high building activity in the public sector and many, many more apartments were built," Ms Schranz says.

Mr Hofstetter says post-war, a federal tax was implemented where Austrians pay around 1 per cent of their income for social housing.

In Vienna, a system emerged where two types of social housing were offered.

One was the city's public housing, or housing that's owned, operated and provided by the City of Vienna.

The other is housing provided by "limited profit housing associations". These housing associations receive support from the government — like very low interest loans — to build co-op, rent-controlled housing.

In both types of housing, social cohesion within the property and the surrounding neighbourhoods is a big consideration.

Open to the middle class

There are income limits to access public housing in Vienna, but these are much higher than in other cities in the Western world.

According to the City of Vienna, around 75 per cent of the population qualify, meaning "the middle class also gets access to Vienna's subsidised housing stock".

Ms Schranz says there are other criteria such as "you have to prove a need for housing, [which] is probably the most important criterion".

This can include "if you move out from home for the first time, if your contract expires and you have to move out [or] if you need an apartment that is more accessible", she says.

In addition, residents need to have lived in Vienna for two years, so Ms Schranz says newcomers often find the city's housing market very expensive.

Dr Kadi says that across different social housing types, "overall, you pay about a third less than on the private rental market".

Crucially, the housing contracts don't expire, even if you start to earn above the income limits.

Affordable housing for 'as many people as possible'

One factor that sets Vienna apart from other cities is that there hasn't been a mass sell-off of social housing stock over recent decades.

"There were several attempts [to sell-off social housing] but overall, the trend was much milder than in most other contexts," Dr Kadi says.

This contrasts with Australia. In NSW for example, around $3.5 billion worth of public housing and land was sold off between 2011 and 2023. These sales were to fund new public housing developments in the state.

Mr Hofstetter adds that Vienna's mindset also makes it unique.

"We kept the attitude of ... providing as much affordable housing to as many people as possible."

And although private rents and sales have gone up in recent years, Ms Schranz says, overall, the housing market still has many affordable options.

"Generally speaking … if you compare rent prices in Vienna to other big cities in Europe and also in the world, our rent is significantly lower."