The Vienna rental system – a blessing for tenants? Permanently cheap rents? A study gets to the bottom of the myth of the Viennese tenants’ paradise and reveals which hidden costs are hidden behind cheap cold rents in Austria’s capital.
The Vienna rental system
From the outside, Vienna seems to be a tenant’s paradise, about 25 percent of all apartments belong to the city and are also rented out by the city. The rental prices are also clearly regulated.
The rental income generated by the city is immediately invested in other residential projects. Social housing also remains inexpensive in Vienna, which is different than in Germany, where rents also rise after ten or twenty years. In this way, the city arranges 50 percent of all of its apartments for needy families who have an extremely limited income.
The original reason why Vienna appears to be a paradise for tenants is a construction phase between 1923 and 1934. In this period after the First World War, the city promoted social housing immensely, resulting in affordable apartments for around 220,000 residents, which are still maintained and communicated by the city today.
Blinded by the myth
In Germany, for example, the myth has spread that Vienna reflects an ideal role model for large German cities. But studies have determined how things are actually on the Viennese housing market. In reality, tenants in Vienna are often much worse off than in Germany.
An investigation by the Federal Community of Real Estate Industry Germany and the Empirica Institute clarifies how the Vienna real estate market is actually positioned. The final result of the study shows that Vienna can in no way serve as a model for German cities.
Because Munich is the only German city in which more has to be paid for the basic rent than in Vienna. The ancillary costs are also significantly more expensive in Austria’s capital than in Germany, so tenants have to fulfill significantly more obligations, which often include expensive renovations. In addition, Viennese tenants have little security regarding the tenancy.
As the study authors let know, the majority of Viennese continue to believe in the myth of cheap rents. This made them blind to more and more cost drivers.
No system, no transparency, high additional costs
The study explains that the Viennese housing market consists of four different areas, “whereby the legal differences as well as the market results between the sub-markets are very large”. Therefore, the notorious Viennese housing policy does not exist according to the study.
With certain surcharges, cold rents can be doubled without any problems, because “the system of discounts and surcharges [hat sich] so complicated in recent decades […]that the permissible amount of rent for an apartment is simply unknown today, ”verbalize the authors of the study.
In addition, many Viennese live in constant fear of being put on the street, because privately rented apartments are usually subject to a contract term of only three years, which in most cases can only be extended for a limited period.
The costs are also driven up by high participation in renovation work, so it is one of the tenant’s obligations to “pay all investments for all parts of the apartment that he can touch”. Accordingly, the landlord is only responsible for guaranteeing the maintenance of roofs, walls and walls.
If all of these aspects are taken into account, the relatively low basic rents should no longer be able to hide the actual costs. “As a result, the Vienna rental system is not recommended. It is expensive, insecure, prone to litigation, bureaucratic, non-transparent and unfair from the point of view of socially weak tenants, without the housing costs in Vienna being lower than in German metropolises, ”the study concludes.
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