The visionary city where rents are one-third of those in Dublin

In November 1898, 125 years ago this year, Gustav Klimt and a number of other Viennese artists opened the Secession building, the fulcrum of their new Secession movement. These artists were seceding from the conservative art that dominated the Austro-Hungarian Empire, where tradition dominated over experimentation, history trumped modernity, and looking backwards to the classics subjugated efforts to adapt art to the future. Secessionism was far more than an art movement. At the turn of the century, the entire region was seceding. Nationalist movements were urging Austrian colonies to move away from Vienna’s orbit, Austrian economists were leading a breakaway from classical economics, culminating with what would be known as the Austrian school. Austrian architects rejected conservatism and neoclassicism for modern architecture. While the old world suffocated individualism, this new movement – modernism – set artists, thinkers, writers and even economists free.

Fuelling this intellectual revolution was a city that was the fastest-growing in Europe and the eighth-largest in the world. Vienna’s population surged to two million by 1900, as migrants from all over the empire arrived to make their fortunes. Vienna was the largest building site in Europe, a multicultural hive of Austrians, Hungarians, Slavs, Jews and various Protestant sects who were welcomed by a far-sighted Emperor. Bosnian Muslims brushed shoulders with Polish Jews, Slovene nationalists with Serbs, Austrian backwoodsmen drank with those from the Romanian frontier. This multilingual, multi-ethnic entrepot produced great artists, writers, psychiatrists and mathematicians of the modern age. Is it any wonder that James Joyce headed to the Austrian port of Trieste to be close to this action?

In practical terms, nowhere was the modernist state more evident than in housing. The legacy of Viennese homebuilding of 100 years ago is visible today as Vienna is one of the most affordable cities to live in Europe. The Viennese started building social housing at scale in the early 20th century and have not stopped. As I walk around this majestic city, the value of social housing can be seen everywhere, not just in the vibrancy of the city, its public spaces, the diversity of shops and apartments, the relative absence of homelessness, and a sort of calm that comes with the city’s citizens being reasonably at ease. I realise that sounds wishy-washy, but that’s the sense you get in Vienna – the place is composed, unruffled.

According to The Economist’s Global Liveability Index (based on a number of quality of life indicators), Vienna is the world’s most liveable city in 2023. Dublin is in 37th position within these rankings. It’s worth flagging that included within the “education & infrastructure” category, which accounts for 20 per cent of the score, is the “availability of good-quality housing” (as highlighted by City Monitor). Affordable housing anchors Vienna’s quality of life score, everything else flows from that.

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Today, more than 60 per cent of the city’s 1.8 million residents live in social housing, while an estimated 80 per cent of residents qualify for public housing. Rents are regulated by the city government so that residents spend no more than 25 per cent of their household income housing. The success of Vienna’s system isn’t only based on the size of the building stock and the reduced rents, but the beauty of the buildings. The homes are sufficiently attractive to make them a draw for the middle class, a factor that has helped prevent areas from becoming social ghettos (see Politico).

From 1923 to 1934, some 64,000 new units, spread across 400 housing developments, were built

According to Statistics Austria figures, the average monthly rent (including running costs) nationwide was €611.9 in Q1 2023 (or €9.1 per square metre). By contrast, the average rental price in Ireland was around €1,792 in Q2 2023 based on Daft figures (that do not account for running cost). Obviously this is a crude comparison that doesn’t adjust for size and nature of dwelling, but rent is still almost three times higher in Ireland than Austria. The mix in Vienna is made up of roughly 25 per cent of people who live in municipal housing, 25 per cent renters, 25 per cent owner-occupiers, and the rest is a mix with a large co-operative housing sector.

But this housing success didn’t happen overnight.

At the time of the Secession movement, the housing situation in the bustling city was dire. In 1910 almost 100,000 people were subtenants; another 75,000 were ‘Bettgänger’, people who rented a space to sleep on and basically had no roof over their heads at all. In these tenements, one quarter of the flats consisted of a kitchen and a single room accommodating six to 10 people (City of Vienna). Between 1919 and 1934, various socialist administrations sought to dramatically improve housing for poor workers, leading to the period known as ”Red Vienna”. From 1923 to 1934, some 64,000 new units, spread across 400 housing developments, were built – equating to about a 10 per cent increase in the city’s housing supply, according to the New York Times. About 10 per cent of the city’s population, around 200,000 people, moved into these new builds, with rents fixed at 3.5 per cent of the average semi-skilled worker’s salary – which was deemed sufficient to cover the maintenance costs.

But how did they pay for it all? Surprise, surprise – taxes!

Hugo Breitner, an economist and bank director invited by the socialist municipal council to take charge of finances, levied new taxes – known as the “Breitner taxes” – including taxes on land, rents, and commercial units, as well as a tax on domestic servants and on luxury goods.

For Ireland, the Viennese lesson for affordable housing is obvious. It requires a strong central vision of what the city should look like, a well-financed municipal building programme fuelled by taxes on luxuries and most importantly, land

Red Vienna came to an end more than 80 years ago, but locals tell me its legacy continues to shape Vienna’s urban development today and it all starts with affordable housing, where the State builds and finances municipal housing that anchors the base price of housing, keeping it low. Rent control and co-operative housing bolster this, while posher homes are available for those who want to pay the premium. All developments, however, are mixed so as not to create an ‘us and them’ in the housing market. For example, the new Wohnpark Neue Donau (Housing Development) is built along the Danube river over an underground expressway. The 850 units vary from subsidised rentals to free-market penthouses, meaning all classes live cheek by jowl – and it works.

For Ireland, and Dublin in particular, the Viennese lesson for affordable housing is obvious. It requires a strong central vision of what the city should look like, a well-financed municipal building programme fuelled by taxes on luxuries and most importantly, land. Secured by affordable but high-quality housing, Vienna tops all measures of quality of life. For example, Numbeo’s Quality of Life Index is a composite index across a range of measures from safety and traffic congestion to purchasing power and property price to income ratios. Based on this index, Vienna ranks fourth in the world, significantly ahead of Cork at (a very decent) 24th place and far ahead of Dublin at 113th.

Let’s get our act together. It’s time for our own secessionist movement in housing that dispenses with the old failed way of doing things, and embraces the new, the practical and the far more democratic. It’s never too late to secede.