How Much State and How Much Market? Comparing Social Housing in Berlin and Vienna

Abstract

This article examines the effect of two different social housing systems on housing-market characteristics and affordability using a case study of Berlin and Vienna. Despite comparable framework conditions, both cities pursued very different social housing policies. While both cities are currently challenged by growing populations and rising house prices, we show that Vienna is more successful in providing affordable housing as it has created effective institutions to attract and retain private actors in this sector. In Berlin, in contrast, the current crisis reveals the lack of institutional capacity to actively pursue housing policy. We argue that different housing market outcomes can be attributed to fundamental differences in the organisation of social housing provision reflecting divergent state-market relations. While in Berlin social housing has been seen as a provisional measure to correct temporary market imbalances, Vienna’s continuous state participation in the housing market has created a framework of balanced rights and responsibilities for social and private actors to achieve social policy goals. Differences in funding arrangements and institutional embeddedness influence not only housing outcomes but also feedback on the state’s capacity to intervene successfully in housing markets.