I legitimately wanted to evaluate the argument here but there’s so much backstory and political contextualization I gave up reading this without ever having found out what the Viennese did.
> If we don’t want Vancouver to go down this path, then perhaps we should heed Henry George’s advice: tax land and use the proceeds to build the housing we need.
This is an unpopular opinion to be sure, but I believe in wealth inequality and income inequality, so long as the standard of living at the bottom is reasonable - and there exists meaningful social mobility. I'd rather tax it on the backend than impede the front end. This is just a matter of opinion of course.
I think that's probably a fairly popular opinion - I agree with it. I just don't see property tax as making any meaningful impact on the wealthy (in my area).
They have a steeply progressive land value tax and further escalate taxes on vacant land. They also slashed taxes on development and construction. This encouraged productive use and efforts to keep assessments low which also drives down housing costs.
Considering the article mentioned that the city was left leaning and also referenced Marx, I guess it's not surprise that they opted to tax people out of their property so that the city could acquire it.
Is that what they did? If by that you mean that they used the tax system to discourage the development of investment properties and undeveloped land as well, then yes I guess. However land value taxes aren't a marxist idea, in fact LVT has been advocated for by Smith, Ricardo, Friedman, Stiglitz, and so on. Even a lot of libertarians like LVT.
It said they had a highly progressive land tax and additional tax on vacant land. This incentivizes utilization of land, but also makes it economically unfeasible to create apartments if you must pay the tax and compete with the government housing.
I'd love to see the data for Libertarians promoting land tax.
> I'd love to see the data for Libertarians promoting land tax.
You can Google this. There’s a lot of disagreement but some of them are for it.
I would imagine that the LVT would make it hard to compete with government housing at some price points, but I don’t know too much about Vienna in particular.
My understanding was they they were trying to write tax policy to maximize the private market production of housing affordable at some percentage of AMI (or rather however the measure median income). But I don’t have a sophisticated understanding.
Of course you can find any opinion in a large enough group, but that doesn't make it representative of them. For example, you can find democrats that support gun rights over gun control, but that's not indicative of the party.
Considering the article said the government housing was run by non-profit cooperatives that put all ths money back into the building... I don't see how someone could operate a for profit apartment building and make any money once there was a majority market share by the government.
> As both the Vienna model and Henry George[1] would suggest, the problem is forever and always the cost of land. Burdensome land costs, and the rentiers who gain massive wealth by passive land speculation, are the real enemies — not developers, not our homeowners, not our public officials.
EDIT: From the looks of it Vienna's policy isn't purely Georgist, but it has a few policies (namely land tax, particularly on vacant lots) out of Henry's playbook.
Are you referring to taxes on ground rent (what is typically meant by "land tax" -- a tax on the value of the land if it was an empty lot), or taxes on improvements (what's built on the land)?
Conventional property tax is a mixture of pure land tax and a tax on improvements.
And are you talking in general, or do you have some specific insight into Vienna's particular policies?
Thanks! I'm curious -- if it's not weird to ask, does your property tax bill happen to separate out how much is due to improvements and how much to ground rent?
When homeowners have the vast majority of their wealth ties up in land values, and not structure values, they become property speculators and rentiers just as bad as any other wealthy rentier.
There is something called in Austria called "Freunderlwirtschaft". Its Austrian for "corruption but everybody is doing it so it is ok".
These "Gemeindebauten" (affordable cheap public housing) have good flats and good areas and bad flats and bad areas. So if you want to be in the really good ones, you better have the right "Parteibuch" (party affiliation) or a friend who has it.
Said that, Gemeindebauten are a great but flawed system.
I think a much better effect has the "Altbaumiete" (old pre world-war-II housing) which are rent controlled. Kinda great living, slightly windy and sometimes smelly and there may be lead in the pipes, but at least affordable.
So a hundred years ago the city imposed crazy taxes on land owners and then bought the land for themselves. Then the city built a lot of housing on the now city-owned land via non-profit construction.
The article doesn’t make a strong attempt to explain how their housing affordability is “solved” though. How easy it to find a new apartment to rent? How much does it cost? What do you get for that price? How does this compare to other cities in Europe? How does Vienna compare to other Austrian cities which did not buy up land?
It’s an interesting case study and I’d love to know more. But this article leaves a LOT of open questions.
Objectively, Vienna's housing price index is up 75% in real terms since 1990. While that's not the ideal 0%, it is much better than San Francisco where prices have gone up by 400% since 1990.
SF is an economics lesson on what not to do. Complete and catastrophic failure across the board.
Low prices don’t mean much if there is no market availability. Many cities that are heavily rent controlled have horror stories of year long waits to get a unit. Or, far worse, black markets where controlled units exchange hands privately. The other responder to my comment suggests this is not the case in Vienna, nice!
The laws of supply and demand can not be defeated. Vienna is a desirable city, so there should be demand. If the city has found a way to produce sufficient supply that’s interesting. Most major cities, including SF, have completely failed to produce sufficient supply.
> Low prices don’t mean much if there is no market availability. Many cities that are heavily rent controlled have horror stories of year long waits to get a unit.
That's not an accident or paradox: rent control is a deliberate, conscious choice to prefer cost control for current residents over availability for new residents.
It's generally comparatively easy to find a flat here. Rents are low compared to most other cities of its size in central Europe, but rose by quite a lot in the last two decades. I pay about 650€ per month for a 1-bedroom-apartment in central Vienna, with good infrastructure
Hard to compare it to other Austrian cities, because those are generally much smaller (but can be more expensive than Vienna(.
More like, city imposes a variety of luxury taxes dedicated to fill the gap left by private businesses in providing homes. While the public building program never made up a major share of the total, it still provided housing to the poor and working class and also provided a base line for the market.
When you rent you usually do it via a Makler (real estate agent), who is going to ask for 2 months of rent as his/her fee. This is not the deposit, which is usually 3 months, and not the first month rent, this money is gone forever. So people tend to rent on the longer term, 5-10 years easily, because you have to have about 6 months of rent in cash available just to start.
Which sucks if you find a job somewhere else, or just choose badly and it turns out the neighbours are loud, or the house is a sh*tty concrete building with paper walls built in the 50s...
If you are very lucky or have connections, you can rent privately, and then you don't have to pay the Makler. But the number of apartments available like this is very low, I'd say <10%.
I moved here from the UK, and while the UK (especially London) has its problems, I would choose that system _any time_ over what's here in Vienna.
To add insult to injury, the housing prices are sky-high, almost as bad as in London, while the salaries are much lower. So buying an apartment is not really an option unless you can sell another one, or get some support from family.
On the other hand, my wife lost her job, and for the first 5 months or so she gets more than 50% of her salary as Arbeitslosengeld. So that offsets the extremely high taxes a bit.
in austria (and germany) buying a house or an apartment is considered a luxury.
if your income is low and you need financial support from the government then you need to first liquidate any nonessential assets, which includes any house or apartment you own.
A city government manipulating the price of urban property so that it can purchase it? This doesn’t seem like a workable model. Doesn’t that reduce property tax revenue? Doesn’t that affect the value of other land in general? Why wouldn’t urban land holders sue the city for damages?
Unlike some other places (the US?), in Austria property tax is a relatively minor part of cities's finances. It's also computed based not on "actual" property values but on fictional values that haven't been adjusted since 1973 or so. For both of these reasons, the city doesn't stand to lose from sinking land prices (not that they are sinking).
Also, I can't find the numbers right now, but a lot of land in Vienna is owned by the Catholic Church. Religious organizations are conveniently exempt from property tax.
> Why wouldn’t urban land holders sue the city for damages?
As far as I can tell, Austrian courts don't subscribe to a notion that investments in real estate should be guaranteed to be risk-free.
The article states that Vienna's population in 1914 (at the beginning of WW1) was 2 million, vs 1.9 million today. I'm no housing policy expert, but isn't it possible that Vienna's rents are stable and low in part because they haven't had to increase their housing stock in over 100 years? It seems to me that a new-world city like Vancouver that has grown tremendously over that period wouldn't be directly comparable.
The countervailing trend is that the number of people per household has fallen greatly in the last 100 years, so even a city without a growing population needs construction to keep up.
Yes, increasing population generally leads to increasing land prices, so I think that's a good question. There are other things that drive land values up, however, such as just generally increased productivity due to technology and any other factor (because a more productive population earns more and can thus afford to pay more in rent to their landlords).
For a full assessment I would like to see other Austrian cities that have had similarly stable population sizes but don't have Vienna's policies.
Vienna is a bit out of the ordinary in that regard because it has been a stronghold of leftist government. The 2nd and 3rd biggest cities in Austria are Graz and Linz which don't have that kind of left-leaning policy. You can rent flats there for rates similar to Vienna public housing. But those are much smaller cities. Vienna is more comparable to Munich for instance where rents are much higher and which is a city that, arguably, has less to offer along many dimensions of quality-of-life.
> Vienna's population in 1914 (at the beginning of WW1) was 2 million, vs 1.9 million today.
You can't just take those two data points and assume that they are connected by a straight line. Vienna was down to about 1.5 million around 1990 and has been growing since. https://en.m.wikipedia.org/wiki/Vienna#Demographics
> Vienna's rents are stable and low
For the record, they are neither. There has been crazy, and accelerating, growth in rental costs over the last ten years.
I assume that concerns many cities worldwide but it seems that currently everyone is trying to get rid of cash and take cheap loans to buy real estate. I check the real estate websites in Austria on a daily basis and can say that real estate supply has definitely decreased during the past year.
Interestingly, SF's population has only grown 13% from 1950 to 2020. The housing prices have grown rather differently, though. Curious to see, isn't it?
I imagine it has only grown 13% precisely because housing prices have grown drastically. If enough housing supply was added to keep rents reasonable, I imagine there would be a lot more people there. Instead raising rents allows the city to cycle out the less wealthy and exchange them for the more wealthy.
Yet employment increased 40% from 1990 to 2019[1]. Increasing employment while maintaining a cap on the number homes drives up the value of the homes closest to all those jobs.
Fun fact, if you want to reduce the price of houses, increase the supply instead of instituting rent control and hoping for spooky action at a distance.
Alternatively, just limit office space and thus local jobs. Except that’s not what local residents want.
SF is doing everything it can to maximize home prices while minimizing rent and property tax increase for current residents. Which is arguably exactly what’s in current local voters best interest.
Sure, though you have to get people to vote opposite their personal interests, granted that’s fairly common behavior. Anyway, this seems to be something you can’t actually say as people strongly object without articulating why.
> Fun fact, if you want to reduce the price of houses, increase the supply instead of instituting rent control and hoping for spooky action at a distance.
That doesn't work either, though it may slow the rate of price growth.
If you want to reduce the price of housing, tank the local economy. It's the only thing that works. Supply side policy is neutralized by its own effect on accelerating/decelerating economic growth, e.g., the attack you suggest doesn't work because reducing the growth of the cost of housing in the short-term accelerates local economic growth which creates upward demand-side pressure on housing, and eventually there are limits to supply in any geographical region (and even moreso in any commute time radius, since density shrinks the radius for any given time.)
If you want to reduce the ratio between median wages and the cost of housing (which is probably more important than nominal or even real housing prices), attack the distribution of income.
Building new housing doesn’t bring more people to the area. Nobody will stay long without a job and increasing the total number of jobs requires more office and commercial space.
If the state is willing to be activist and damage the (paper) wealth of very influential people, like senior bureaucrats and policy wonks - who decide the states policy...
I do not know what it is really like in SF, but here in Aotearoa that is where we find ourselves. House prices and rents double what they ought to be and no state actor willing to take the hit of doing anything about it
It's more about neighborhood level obstruction in SF. People will elect pro-housing candidates as Mayor and State Senator/Rep, but the local Board of Supervisors (the city council) is controlled by people that will say, "you should build that anywhere, but here." People are _very_ anti-change and especially don't want people different from themselves moving in.
The pro forms that will finance any construction loan/mortgage is not going to let the builder assume big increases in rents beyond inflation.
In fact, if the only way to increase rents is to build a larger building and collect from more units, rent control could actually incentivize building.
Where rent control gets into trouble is where it encourages "got mine, forget allowing anybody new here" sort of NIMBYism that accompanies home ownership. But that's a cultural problem, not a rent control or home ownership problem. And it's only a problem when the ability to build is gated by letting a tiny number of people veto new buildings.
This veto power of tiny minorities is the true problem with building more in SF and other supply constrained places. A more democratic process that took into account the broader views of the people would fix it.
Maybe not, but obviously the institution of rent control is an attempt to get out from under the house price problem without construction. That's why it's not working.
The policy doesn't make half as much sense if you also increase construction.
It's certainly possible to do both, but I do not believe that rent control is necessary when organic market-based solutions should sort the problem out. I'm an interventionist when the market fails, but not when the market isn't even allowed to try due to different failed intervention.
No. Why we can’t have nice things is the selfishness of the people who worship “the economy” at the cost of human lives.
Why we can’t have nice things is the fascination with enabling rich people to get richer directly at the expense of the poorest and most vulnerable in society.
Thing is we already have this. The birth rate in the US is 1.73 children per woman, and the equilibrium rate is 2.1. As development increases, the birth rate drops further. Generally speaking if you want to reduce population, push for development. Schools, healthcare, economic empowerment, the works. It's the best contraceptive. That's fine in the macro, but the micro problem remains people will still want to live more in nice places than crap places. The Bay Area happens to be really, really nice - from a climate perspective that is.
The economy exists as a side effect of getting people the things they need to live fulfilling lives.
Serving the economy is literally putting the cart before the horse.
I need to eat and poop. I don’t measure my value as a person by how much I poop. When people value the metric of pooping over the quality of life of the pooper, you create a broken society.
So too, valuing the movement of money over what the money is used for distorts our society.
More people inflates GDP. GDP is not a measure of anything worthwhile. The economy is not the thing we need to be nurturing — it is a side effect.
> Fun fact, if you want to reduce the price of houses, increase the supply instead of instituting rent control and hoping for spooky action at a distance.
Though if you want to reduce the prices of housing quickly, I don't think anything could beat rent control plus an aggressive use of eminent domain to build lots of public housing quickly. Even though public housing was done extremely poorly in the US and earned a very bad reputation, other countries have done it much more successfully.
A market solution would naturally take far more time (at a minimum, there'd be no reduction in prices until new development project finish and their supply hits the market), and the equilibrium price may still end up being lower but still unaffordable to too many people.
D.C.'s population has gone down since the 1950s and it still faces affordable housing and homeless issues. I don't think population growth or decline is a clear driver.
Standards of living were vastly different back then. It used to be the norm that 6-7 people were living in the same room, and apartments were about 22m² [1]. Toilets were outside the apartment. etc. Since then, old houses were upgraded and massive amounts of new houses were built to accommodate a rising standard of living. Just in the past 30 years, formerly cheap regions at outer parts of Vienna, with houses that were only habitable during summer, developed into enormously expensive upper-middle class areas with single-family houses.
I don't have the numbers handy, but household size has shrunk dramatically over the last 100 years. I would guess that today's 1.9M people represent 50-100% more househoulds than 1914's 2M.
Knowing Vienna quite well and knowing Vancouver at least a little bit, I'd say this is not apples-to-apples. In Vancouver it was the real estate boom that has fueled high-quality residential development: Given the circumstance where such development would fetch high prices, residential development was conducted that would deliver on a level of quality commensurate with high prices (namely: high quality!). A "Gemeindebau" in Vienna is a very different animal: They are built cheaply for the purpose of being cheap, and the quality you get ouf of that is in line with the principle "you get what you pay for" (namely: low quality!)
This isn't necessarily true, especially for the original building program. Pre-war apartment buildings for the masses (Zinshaus) were raised quickly and weren't maintained well. E.g., before regulations outlawed the cheaper variety in the 1990s, cheap apartments often lacked a bathroom of their own and relied on shared facilities. The public building program, on the other hand, was up to modern standards (and taking pride in doing so), while it was still aimed at efficiency and never intended to rival the residential buildings raised by private ownership for the middle class. So, if you expect high rooms, stucco, etc, you're probably in the wrong market. (Also, you may not be part of the intended audience, anyway.)
Vienna is the most dull and calcified city I've ever lived in, and it's not a growing city. It's not super useful to compare to cities that are thriving.
These economist rankings are done from the point of view of rich expats. I very much doubt that their lives have much in common with the lives of people living in Vienna's public housing.
Yeah, it's a provincial backwater; even as an expat - it's pleasant for awhile, but notice how people never want to go these top 10 cities... LA, NY, SF, London, Paris, Tokyo etc are not in these lists.
If we are going to get government involved in this, then why not shift to cheaper area? There's cheaper land in more rural areas that the government could develop and entice businesses to move to. This would be cheaper for the tax payer. There's also an exodus from many cities which leave abandoned buildings that could be converted to living space.
Maybe the article works for Vancouver (I've never been there), but I don't see it working in most places.
It's usually cheaper because there are fewer people living there. That is usually due to fewer jobs being available. Many people are forced to move away from the small town or rural communities that they grew up in due to a lack of industry. So many people would like to live there, but can't due to the work constraints.
Imagine the savings that a major company could have if they moved from a place like silicon valley to somewhere like Kentucky. Land can be had for $500 an acre, cost of living is lower and could greatly reduce salary requirements, and you can still have this while being less than an hour from a major city (or two).
ah, yes, for a company that people want to work for that makes sense. i misread your post and thought you meant for the government to motivate the building of housing in cheaper areas.
unfortunately it's often either one or the other, but not both. most places i have seen are satellite cities where people live but commute into the actual city center, or they are industrial parks without any living quarters nearby.
it takes a lot more to make such areas attractive.
Here's the gist: the government taxed the shit out of the landlords and forced them to sell their land cheaply. Europeans generally see nothing wrong with this strategy, whereas most Americans will feel shivers down their spines.
This difference comes from different attitudes around ownership. In places like China and Russia, owning a house means you get to keep the house unless enough people would benefit from you not owning it. In the US, you get to keep your house no matter how much anyone - including the government - would prefer you didn't.
Europe is somewhere in between on that spectrum, and this attitude extends to not just land ownership. For example, a popular ad campaign in Austria is demanding from the employees of BioNTech to leak the base components and production instructions so that other companies can steal those trade secrets and supposedly help generate more vaccines. If you read the comments in one of the videos on this topic, you will see them being mostly in favor of the campaign: https://www.youtube.com/watch?v=zDnZd7UmBco.
It would be difficult to imagine many of my US friends advocating for stealing company secrets. I am not implying that either group has better ethics - they just have different attitudes towards the concept of ownership.
| In the US, you get to keep your house no matter how much anyone - including the government - would prefer you didn't.
That's not accurate. The US, state and city governments can most definitely take private land and convert it to public use if enough people benefit from it.
There are other means as well, a city could purchase something on the open market, or a county could purchase land and convert into a public park, or what ever suits them.
> In the US, you get to keep your house no matter how much anyone - including the government - would prefer you didn't.
Not true at all. Eminent Domain is a real thing. The controversies have generally been when there is a dispute over whether the taking is for a public benefit, e.g. condeming property to make way for a private business.
It is but it's increasingly difficult. Constructing the Interstate Highway System would have be far more challenging today. (Some of our property growing up was taken for this purpose. Don't really know if my parents considered it an OK deal at the time.)
It's technically a thing but totally not a thing in the context of my comment and this topic in general. I doubt you'll make a case that China, Russia, or for that matter, even Austria have stronger private property rights than the US. Remember, the origination story of the US revolves around private land ownership attracting European migrants who were fed up with European feudalism. I am sure there are some carveouts here and there, but they are remarkably minimal to the point that it's sometimes worth making an observation without adding a bunch of footnotes.
Other countries, notably Japan but others that escape my memory, have stronger property rights because the government has weaker power of eminent domain. This has more details, see the section about Japan - https://pedestrianobservations.com/2018/02/02/civil-service-...
I'm your neighbor to the south (slovenia)... here, your house is practically untouchable if you mess up, but most people want other people to be taxed for owning a house. They also want owners of vacant properties taxed a lot more (which they believe would create more rentable apartments, but vacant apartmnts in big cities are rented out without contracts and without tax - usually to students, who prefer a risky cheap apartment, to a contract+more expensive, and vacant houses outside of cities are empty because literally noone wants to live there - you can buy a house with a large yard around it for a price of a used WV Golf in some parts of slovenia, and maybe half a bathroom in our capital). The same people also want people making money by renting out apartments pay more taxes on rent, because they somehow believe that the increase of taxes wont mean increase in rent prices.... i have no idea why.
But our largest problem is the same as in many other cities, including San Francisco.... want to build something? You have to buy a run down house, because you're not allower to build stuff on farming area, literally by the city center... and when you build a house, it can be 2 family house max. We need huge apartment buildings, but finding an area where an invester can build ones is impossible, because our municipality and goverment don't allow it.
There was a law passed in the 90s, where people who were assigned (government) apartments, could buy them from the government for really really cheap, and get government loans to do so (+ we had a lot of inflation, so we're talking 20year loans, where people would pay around an equivalent of ~50eur monthly... basically nothing).
So yeah... those who bought the apartments are happy, those who paid for the construction (the rest), and didn't get any, were not, and government currently has just a few "social apartments" for poor people. On the other hand, if the government was a landlord to all those people, that would mean a lot more administration and a lot more work (basically, back to yu-levels, or even worse, because people expected more after the fall of yugoslavia).
I think Singapore also has some particular relevance to the US because of its multi-ethnic nature.
Often when I talk to Americans about public housing a really common argument is the image of public housing as a sort of racist thing that creates enclaves for certain (usually low-income) groups. Yet Singapore, with its integration policies has virtually completely avoided this, and it basically can only do it effectively because it controls the housing stock.
It's not a utopia but the degree to which people intermingle and live together is quite astonishing if you're used to French Banlieues or the segregation in many American cities today.
Singapore is "multi-ethnic" in the sense that it broke off from nearby Malaysia in order to have a Chinese majority city state, and adopted explicit policies to try to manage the Malay and Indian population in order to ensure that it is an ethnically Chinese run government. You can listen to some of Lee Kuan Yew's speeches to see how multi-ethnic it is, and what he thought of the US approach to diversity -- e.g. "multiculturalism will destroy America." (https://www.forbes.com/sites/realspin/2013/02/13/singapores-...)
The "integration" policies you refer to are there to limit non-chinese representation -- in the US we would call it a gerrymandering-support policy. Singapore also has an immigration policy meant to attract successful entrepreneurs, with no citizenship path for cheap labor, only temporary work visas. It does not accept any refugees or political asylum seekers. Being born in Singapore doesn't make you a citizen (no soil-based, only blood-based criteria).
That's a fair characterization of the workings of the state, which has never really lived up to any democratic norm to be honest, but if you actually walk through Singapore and see how people live, honestly it is a successful multiethnic society. LKY might have a lot of non-PC views, but you wouldn't know it just by visiting the place. And that's I think what matters.
And on the humanitarian front, yeah Singapore has a underclass of foreign workers with little chances of citizenship, but then so has the US. Talk to agricultural workers in Cali. The undocumented labour pool is millions of people. Or Eastern Europeans on German fields picking asparagus.
> That's a fair characterization of the workings of the state, which has never really lived up to any democratic norm to be honest, but if you actually walk through Singapore and see how people live, honestly it is a successful multiethnic society.
Well, this is the LKY argument: In terms of outcomes, people are unequal and there will always be persistent differences between ethnic groups. The ranking isn't necessarily fixed over thousands of years (Greece was once the world leader and now has fallen behind), but at any point in time, there is never equality of outcomes. There will always be some groups ahead and others behind, and these positions change very slowly, and not through any mechanisms that can be controlled by policy.
It shouldn't be government (or private sector) policy to try to pretend that they are equal or to try to make them equal, as that only leads to racial resentment, constant race wars and a Handicapper General to equalize everything. The SG approach is to suppress anyone trying to stir up this resentment or trying to advocate for racial equality. Once people learn to accept inequality, mind their own business, and just do the best they can for themselves, then you can have a successful heterogeneous society.
But that approach offends the West's moral sensibilities, which is to try to have incredibly heterogeneous societies while insisting on equal outcomes. So the West will destroy itself with a combination of constant lying about race ("we are all equal, differences must be due to some form of oppression") as well as the imposition of a series of ever more tyrannical Handicapper Generals as it vainly tries to make the human nature conform to a delusion.
So whereas you make it sound like an accident, that despite permanenent racial inequality SG looks like a nice place "on the ground", LKY would say that it is because of the acceptance of this inequality that people in SG can live in relative peace whereas in the West this is impossible.
Fun fact it didn't "break off" from Malaysia, it was kicked out. Singapore is the only country in history, to the best of my knowledge, to gain independence against its own will.
Malta, and iirc a couple other island colonies were kicked out of the british empire back in the day. Malta's especially came right after a referendum which voted to remain as part of the UK and actually to integrate closer, but it wasn't popular in the UK as the island was costly to keep and no longer relevant as a naval base due to changing strategic concerns.
A sorta aside. The absolute best AirBnB experience we ever had was in Vienna. Of course it's an anecdote, but we had absolutely no trouble finding convenient, cheap, and large places to stay under $70/night. This made us think that the housing market there must be quite cheap compared to where we're from. We ended up staying in an absolutely beautiful flat about 20 minutes from the city center via U-Bahn for <$60/night -- a price we've paid for old bedrooms in lesser cities. The same flat where we live would easily cost closer to $3k/mo.
>"Vienna provides an interesting counterpoint. Because rent control disincentivized the private development of rental buildings, landlords were, for a time, removed from the market for urban land. Consequently prices finally went down, allowing the city to buy land at a much reduced price; often it was the only buyer in the market."
PDS: An interesting cycle (or set of cycles) of cause and effect...
Disclaimer: I am neither for nor against rent control...
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[ 3.2 ms ] story [ 136 ms ] threadIt's one way to reduce housing prices, but generally just increasing supply is simpler and more palatable.
This is the way they are increasing supply.
I'd love to see the data for Libertarians promoting land tax.
You can Google this. There’s a lot of disagreement but some of them are for it.
I would imagine that the LVT would make it hard to compete with government housing at some price points, but I don’t know too much about Vienna in particular.
My understanding was they they were trying to write tax policy to maximize the private market production of housing affordable at some percentage of AMI (or rather however the measure median income). But I don’t have a sophisticated understanding.
Considering the article said the government housing was run by non-profit cooperatives that put all ths money back into the building... I don't see how someone could operate a for profit apartment building and make any money once there was a majority market share by the government.
> As both the Vienna model and Henry George[1] would suggest, the problem is forever and always the cost of land. Burdensome land costs, and the rentiers who gain massive wealth by passive land speculation, are the real enemies — not developers, not our homeowners, not our public officials.
[1] https://thetyee.ca/Solutions/2018/06/04/Tax-To-Solve-Housing... (linked in the article)
EDIT: From the looks of it Vienna's policy isn't purely Georgist, but it has a few policies (namely land tax, particularly on vacant lots) out of Henry's playbook.
Conventional property tax is a mixture of pure land tax and a tax on improvements.
And are you talking in general, or do you have some specific insight into Vienna's particular policies?
These "Gemeindebauten" (affordable cheap public housing) have good flats and good areas and bad flats and bad areas. So if you want to be in the really good ones, you better have the right "Parteibuch" (party affiliation) or a friend who has it.
Said that, Gemeindebauten are a great but flawed system.
The article doesn’t make a strong attempt to explain how their housing affordability is “solved” though. How easy it to find a new apartment to rent? How much does it cost? What do you get for that price? How does this compare to other cities in Europe? How does Vienna compare to other Austrian cities which did not buy up land?
It’s an interesting case study and I’d love to know more. But this article leaves a LOT of open questions.
Low prices don’t mean much if there is no market availability. Many cities that are heavily rent controlled have horror stories of year long waits to get a unit. Or, far worse, black markets where controlled units exchange hands privately. The other responder to my comment suggests this is not the case in Vienna, nice!
The laws of supply and demand can not be defeated. Vienna is a desirable city, so there should be demand. If the city has found a way to produce sufficient supply that’s interesting. Most major cities, including SF, have completely failed to produce sufficient supply.
That's not an accident or paradox: rent control is a deliberate, conscious choice to prefer cost control for current residents over availability for new residents.
To find an apartment was easy in their case (4-5 days) the total cost is similar to Berlin and about 50% the price of Dublin.
Hard to compare it to other Austrian cities, because those are generally much smaller (but can be more expensive than Vienna(.
More like, city imposes a variety of luxury taxes dedicated to fill the gap left by private businesses in providing homes. While the public building program never made up a major share of the total, it still provided housing to the poor and working class and also provided a base line for the market.
Which sucks if you find a job somewhere else, or just choose badly and it turns out the neighbours are loud, or the house is a sh*tty concrete building with paper walls built in the 50s...
If you are very lucky or have connections, you can rent privately, and then you don't have to pay the Makler. But the number of apartments available like this is very low, I'd say <10%.
I moved here from the UK, and while the UK (especially London) has its problems, I would choose that system _any time_ over what's here in Vienna.
To add insult to injury, the housing prices are sky-high, almost as bad as in London, while the salaries are much lower. So buying an apartment is not really an option unless you can sell another one, or get some support from family.
On the other hand, my wife lost her job, and for the first 5 months or so she gets more than 50% of her salary as Arbeitslosengeld. So that offsets the extremely high taxes a bit.
if your income is low and you need financial support from the government then you need to first liquidate any nonessential assets, which includes any house or apartment you own.
Also, I can't find the numbers right now, but a lot of land in Vienna is owned by the Catholic Church. Religious organizations are conveniently exempt from property tax.
> Why wouldn’t urban land holders sue the city for damages?
As far as I can tell, Austrian courts don't subscribe to a notion that investments in real estate should be guaranteed to be risk-free.
For a full assessment I would like to see other Austrian cities that have had similarly stable population sizes but don't have Vienna's policies.
Question: > has less to offer along many dimensions of quality-of-life.
Which one are saying has less to offer, Munich or Vienna?
You can't just take those two data points and assume that they are connected by a straight line. Vienna was down to about 1.5 million around 1990 and has been growing since. https://en.m.wikipedia.org/wiki/Vienna#Demographics
> Vienna's rents are stable and low
For the record, they are neither. There has been crazy, and accelerating, growth in rental costs over the last ten years.
[1] 2523.4/1798.7 = 1.4 from https://fred.stlouisfed.org/series/SANF806NAN
SF is doing everything it can to maximize home prices while minimizing rent and property tax increase for current residents. Which is arguably exactly what’s in current local voters best interest.
Democracy working as intended?
0-day: San Francisco real estate prices vulnerable to 51% attack.
That doesn't work either, though it may slow the rate of price growth.
If you want to reduce the price of housing, tank the local economy. It's the only thing that works. Supply side policy is neutralized by its own effect on accelerating/decelerating economic growth, e.g., the attack you suggest doesn't work because reducing the growth of the cost of housing in the short-term accelerates local economic growth which creates upward demand-side pressure on housing, and eventually there are limits to supply in any geographical region (and even moreso in any commute time radius, since density shrinks the radius for any given time.)
If you want to reduce the ratio between median wages and the cost of housing (which is probably more important than nominal or even real housing prices), attack the distribution of income.
I do not know what it is really like in SF, but here in Aotearoa that is where we find ourselves. House prices and rents double what they ought to be and no state actor willing to take the hit of doing anything about it
The pro forms that will finance any construction loan/mortgage is not going to let the builder assume big increases in rents beyond inflation.
In fact, if the only way to increase rents is to build a larger building and collect from more units, rent control could actually incentivize building.
Where rent control gets into trouble is where it encourages "got mine, forget allowing anybody new here" sort of NIMBYism that accompanies home ownership. But that's a cultural problem, not a rent control or home ownership problem. And it's only a problem when the ability to build is gated by letting a tiny number of people veto new buildings.
This veto power of tiny minorities is the true problem with building more in SF and other supply constrained places. A more democratic process that took into account the broader views of the people would fix it.
The policy doesn't make half as much sense if you also increase construction.
Why we can’t have nice things is the fascination with enabling rich people to get richer directly at the expense of the poorest and most vulnerable in society.
It is all about balance, in a turbulent world
Serving the economy is literally putting the cart before the horse.
I need to eat and poop. I don’t measure my value as a person by how much I poop. When people value the metric of pooping over the quality of life of the pooper, you create a broken society.
So too, valuing the movement of money over what the money is used for distorts our society.
More people inflates GDP. GDP is not a measure of anything worthwhile. The economy is not the thing we need to be nurturing — it is a side effect.
Though if you want to reduce the prices of housing quickly, I don't think anything could beat rent control plus an aggressive use of eminent domain to build lots of public housing quickly. Even though public housing was done extremely poorly in the US and earned a very bad reputation, other countries have done it much more successfully.
A market solution would naturally take far more time (at a minimum, there'd be no reduction in prices until new development project finish and their supply hits the market), and the equilibrium price may still end up being lower but still unaffordable to too many people.
Islington (London)'s population is around half what it was in 1914, but rents are out-of-control.
[1] https://www.derstandard.at/story/2000067989262/wohnhistorike...
The article is about the situation the city was left in after a quite rapid growth from 0.5M in 1851 to 2M in 1910, just before WWI.
Maybe the article works for Vancouver (I've never been there), but I don't see it working in most places.
Why downvote with no reply?
Imagine the savings that a major company could have if they moved from a place like silicon valley to somewhere like Kentucky. Land can be had for $500 an acre, cost of living is lower and could greatly reduce salary requirements, and you can still have this while being less than an hour from a major city (or two).
unfortunately it's often either one or the other, but not both. most places i have seen are satellite cities where people live but commute into the actual city center, or they are industrial parks without any living quarters nearby.
it takes a lot more to make such areas attractive.
This difference comes from different attitudes around ownership. In places like China and Russia, owning a house means you get to keep the house unless enough people would benefit from you not owning it. In the US, you get to keep your house no matter how much anyone - including the government - would prefer you didn't.
Europe is somewhere in between on that spectrum, and this attitude extends to not just land ownership. For example, a popular ad campaign in Austria is demanding from the employees of BioNTech to leak the base components and production instructions so that other companies can steal those trade secrets and supposedly help generate more vaccines. If you read the comments in one of the videos on this topic, you will see them being mostly in favor of the campaign: https://www.youtube.com/watch?v=zDnZd7UmBco.
It would be difficult to imagine many of my US friends advocating for stealing company secrets. I am not implying that either group has better ethics - they just have different attitudes towards the concept of ownership.
That's not accurate. The US, state and city governments can most definitely take private land and convert it to public use if enough people benefit from it.
https://www.justice.gov/enrd/history-federal-use-eminent-dom...
There are other means as well, a city could purchase something on the open market, or a county could purchase land and convert into a public park, or what ever suits them.
Not true at all. Eminent Domain is a real thing. The controversies have generally been when there is a dispute over whether the taking is for a public benefit, e.g. condeming property to make way for a private business.
It's technically a thing but totally not a thing in the context of my comment and this topic in general. I doubt you'll make a case that China, Russia, or for that matter, even Austria have stronger private property rights than the US. Remember, the origination story of the US revolves around private land ownership attracting European migrants who were fed up with European feudalism. I am sure there are some carveouts here and there, but they are remarkably minimal to the point that it's sometimes worth making an observation without adding a bunch of footnotes.
But our largest problem is the same as in many other cities, including San Francisco.... want to build something? You have to buy a run down house, because you're not allower to build stuff on farming area, literally by the city center... and when you build a house, it can be 2 family house max. We need huge apartment buildings, but finding an area where an invester can build ones is impossible, because our municipality and goverment don't allow it.
So yeah... those who bought the apartments are happy, those who paid for the construction (the rest), and didn't get any, were not, and government currently has just a few "social apartments" for poor people. On the other hand, if the government was a landlord to all those people, that would mean a lot more administration and a lot more work (basically, back to yu-levels, or even worse, because people expected more after the fall of yugoslavia).
[1] https://en.wikipedia.org/wiki/Public_housing_in_Singapore
Often when I talk to Americans about public housing a really common argument is the image of public housing as a sort of racist thing that creates enclaves for certain (usually low-income) groups. Yet Singapore, with its integration policies has virtually completely avoided this, and it basically can only do it effectively because it controls the housing stock.
It's not a utopia but the degree to which people intermingle and live together is quite astonishing if you're used to French Banlieues or the segregation in many American cities today.
The "integration" policies you refer to are there to limit non-chinese representation -- in the US we would call it a gerrymandering-support policy. Singapore also has an immigration policy meant to attract successful entrepreneurs, with no citizenship path for cheap labor, only temporary work visas. It does not accept any refugees or political asylum seekers. Being born in Singapore doesn't make you a citizen (no soil-based, only blood-based criteria).
And on the humanitarian front, yeah Singapore has a underclass of foreign workers with little chances of citizenship, but then so has the US. Talk to agricultural workers in Cali. The undocumented labour pool is millions of people. Or Eastern Europeans on German fields picking asparagus.
Well, this is the LKY argument: In terms of outcomes, people are unequal and there will always be persistent differences between ethnic groups. The ranking isn't necessarily fixed over thousands of years (Greece was once the world leader and now has fallen behind), but at any point in time, there is never equality of outcomes. There will always be some groups ahead and others behind, and these positions change very slowly, and not through any mechanisms that can be controlled by policy.
It shouldn't be government (or private sector) policy to try to pretend that they are equal or to try to make them equal, as that only leads to racial resentment, constant race wars and a Handicapper General to equalize everything. The SG approach is to suppress anyone trying to stir up this resentment or trying to advocate for racial equality. Once people learn to accept inequality, mind their own business, and just do the best they can for themselves, then you can have a successful heterogeneous society.
But that approach offends the West's moral sensibilities, which is to try to have incredibly heterogeneous societies while insisting on equal outcomes. So the West will destroy itself with a combination of constant lying about race ("we are all equal, differences must be due to some form of oppression") as well as the imposition of a series of ever more tyrannical Handicapper Generals as it vainly tries to make the human nature conform to a delusion.
So whereas you make it sound like an accident, that despite permanenent racial inequality SG looks like a nice place "on the ground", LKY would say that it is because of the acceptance of this inequality that people in SG can live in relative peace whereas in the West this is impossible.
PDS: An interesting cycle (or set of cycles) of cause and effect...
Disclaimer: I am neither for nor against rent control...