Wednesday, 13 December 2017

A solution to our housing problems: move to Vienna

Everyone's talking rent-control:
Rent controls: Who might gain, who might lose and how might it work? - BBC News
FactCheck: Do rent controls work? – Channel 4 News

It's highly politicised:
How rent controls have failed around world | News | The Times & The Sunday Times
Rent control defies basic economics – Daily News

Here's a more nuanced look from the FT:


A German lesson in rent controls

Those who oppose rent controls should object to all government interference in housing

Rent controls are a terrible idea. That was the general reaction of the property industry when the Labour party proposed them during the election campaign. The electorate clearly agreed.
Yet Germany — already one of the most regulated rental markets in the world — has just introduced something very similar. So far, the sky does not appear to have fallen in.
There is also a big fundamental objection to rent controls, often advanced by the property industry and the buy-to-let lobby, which is that governments should not interfere in the workings of free markets.
Instinctively, I would be the first to agree with that. Indeed, I would take it to its logical conclusion: we should abandon the policy of artificially cheap credit that has vastly inflated asset prices; scrap Help to Buy, a scheme whose primary effect is to pass money from taxpayers to shareholders in the housebuilders; tax all profits from real estate as we would on any other capital gain; curtail the billions of taxpayers’ cash paid to private landlords as housing benefit; stop allowing debt interest costs to be deducted from tax liabilities; and reform a planning system that consistently favours those who own property over those who do not.
Needless to say, none of the above is likely to happen soon. That is why we have something to learn from the German system — which, lest we forget, was implemented by a centre-right government, not a bunch of rabid socialists.
It is not perfect, but it does a much better job of balancing the interests of tenants and owners than the policies of successive UK governments, who have basically ramped up house prices without much thought for the long-term consequences.
A German lesson in rent controls - Financial Times

On the Continent, there is also a debate going on:
Rent regulation works: evidence from across Europe | Dublin Tenants
German rent-control law violates constitution, court rules | World news | The Guardian
Rent Controls in France - frenchproperty.com
What does scrapping rent controls in Paris mean for tenants? - The Local
Czech Republic Guide: Rent control, Rent restrictions in the Czech Republic: Most flats in the Czech Republic
Rent control destroyed Sweden's housing market - The Local
Reining in the Rents | The Vienna Review
Property Law in Austria | Real Estate Laws

This is from yesterday's Guardian:

What could Vienna’s low-cost housing policy teach the UK?

Rent controls mean public sector workers and those on lower pay can afford to live and work in the Austrian capital

Vienna effortlessly tops the world’s most liveable city surveys, and for good reason. Its citizens – 1.8 million at the last count – enjoy affordable public transport, abundant greenery and rents UK citizens could only dream of. In fact, acccommodation in Vienna is plentiful and cheap, making it one of the most affordable places to live. In this compact city, dominated by four- and five-storey, walk-up mansion blocks, tenants have been known to snag flats with palace views, free heating and Alps mineral water on tap. More than 80% of residents rent, and two-thirds of Viennese citizens live in municipal or publicly subsidised housing. Eight out of ten flats built in the city today are financed by Vienna’s housing subsidy scheme. This quality and range helps push down rental prices, meaning low-paid workers can afford to live in the Austrian capital, even in the city centre. They often live centrally and enjoy its cheap amenities, short commutes and, thanks to a sound economy, jobs – even when renting on the partially regulated private market.
And that includes public sector workers. “Like others in Vienna, we feel we hit the jackpot even renting privately,” says 30-year-old Austrian nurse, Barbara Hammer, who moved into a handsome neo-gothic flat in the west of the city five years ago.

Hammer, 30, shares the 80-square-metre home, just 15 minutes by tram from the city centre, with her boyfriend, a social services project manager for the Vienna local authority. Hammer’s total rental costs are €560 a month. That’s just under £500, and 18% of her take-home pay, which compares to the 50% an average worker renting in the UK pays and 79% of take-home pay that London workers spend on rent.
“I’ve had several nursing posts in Vienna since moving into this flat and I can say its not just the low cost but the fact I could walk to work for shifts that I love. Another job I had was 20 minutes away by public transport. Especially with night shifts, living handily for work is priceless,” she says. “I really appreciate how compact Vienna is.”
Back in the increasingly renting UK, Labour says it wants an end to workers spending half their earnings on rental costs. High rents are forcing many public sector workers – like other lower paid employees – to live outside the cities where they work. Labour may have proposed a Roosevelt-like “new housing deal”, ending tenancy insecurity by introducing controls on rent rises, more secure tenancies, landlord licensing and new consumer rights for renters but compared to Austria’s rent controls, these measures lack ambition.
Housing charity Shelter describes Labour’s proposals for England and London as more rent stabilisation than actual rent control. And even a recently launched Scottish model, which proposes some limits on rent increases, would only contain, not reduce, rental costs. But the charity says rent controls would lead to a mass sell-off of buy-to-let homes, thereby reducing the vital rental housing stock further.
Not a problem, it seems, in Vienna with its plethora of social housing – a key, it seems, to making a living rent achievable. With rent caps and an abundance of social housing, crucially here landlords are reluctant to pack in their game. “It is nonsense that low rents will lead to mostly empty homes,” says Wolfgang Kirnbauer, chairman of campaign group Tenant Protection Vienna.
Where rent controls do work, many Viennese agree, is in tandem with Vienna’s vast offering of unghettoised, social housing and an aggressive policy to add more of these homes. Vienna spends more than €570m a year on subsidising, constructing and preserving public housing despite having a population nearly eight times smaller than the UK capital. Annual government funding for affordable housing in London, with a population of around 8.7m, is only around £500m, less than half the amount spent in 2009/10 and London’s mayor, Sadiq Khan, says this needs to increase to 2.7bn a year to prevent the housing crisis from getting worse. Vienna also wants to do more, last year committing to increasing annual housing production by 30% in order to meet demand.
“It’s been so very important to be close to my working place and that is possible in Vienna (especially after the night shift),” says Hammer. “Tenancy regulations are so important for living sanely, so, yes, I’m a big fan of rent controls and of Vienna. If I had to spend 79% of my income [on rent, like in London] then I think I’d have to leave Vienna because that’s insanely expensive,” she says.

What could Vienna’s low-cost housing policy teach the UK? | Society | The Guardian

With thanks to the EDW blog:
Housing Viennese-style | East Devon Watch

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