Sharing economy services, whether ride-sourcing or e-scooter sharing, are much in vogue. For the European Commission, it’s the height of fashion, with a new e-commerce directive scheduled this year. Yet, for city administrations, which often have to focus on the provision of much more basic services, the picture is more mixed.
One particular aspect of the sharing economy that has come under increasing scrutiny from city administrations is the case of short term holiday rentals. And perhaps rightly so, as a sustained growth in tourism has led to a 57% increase in overnight stays in European cities since 2008!
While many residents benefit from the offer of quick cash, for others, high numbers of Airbnb rentals in one area can lead to increased rents and less available housing stock.
In Vienna, where around 60% of the population live in subsidised housing in which subletting is not permitted, this is not necessarily the case. Nonetheless, given that the number of properties in Vienna listed on such platforms has climbed from a mere 1,300 in 2014 to around 9,000 today, with one study suggesting this equates to 2,000 homes being permanently removed from the rental market, city officials have been offered food for thought.
As Peter Florianschütz, City Councillor for Vienna, argues, “it is important for us to develop clear rules and structures and prevent the platform economy to contribute to artificial shortages and thus increase housing costs for the Viennese population.”
The Vienna model
After looking into the issue, the city decided to amend the Vienna Tourism Promotion Act, by introducing a mandatory reporting by platform operators as well as the payment of a tourist tax, which goes to fund Vienna’s tourist board.
This has helped bridge another major hurdle in the relationship between the city administration and platform providers, by mandating that such platforms share the names of the homeowners with the municipal authority, or enter into another sort of agreement – whereby failure to reach consensus will lead to criminal or penalty proceedings – as is the case for Airbnb which booked more than one million guests in Vienna during 2018.
The Viennese approach, which makes it much easier to ensure that local regulations are observed, is now being advocated as a potential model for other cities and local authorities to deal with the potential pitfalls of short term holiday rentals on the local housing market, with the European Committee of the Regions recently adopting this initiative.
“We seek to support digital apps, wherever they help people improve their quality of life. But the failure to deliver proper tax payments and a wilful ignorance of regional law, is not innovative, and will not be accepted,” says Peter Hanke, Executive City Councillor of the city of Vienna.
Indeed, while cities undoubtedly benefit from tourism, which will remain a major source of income and employment, many other cities, including Amsterdam, Barcelona, Berlin, Bologna, Bordeaux, Brussels, Krakow, London and Paris, have shown their support for such an initiative.
For Vienna, and for these other cities, the important factor is about ensuring the city remains liveable.
A place to call home
Vienna’s focus on providing adequate affordable housing, such as the recently opened Barbara Prammer-Hof, is also at the core of its fight against poverty and support for the European Pillar of Social Rights.
“Social housing is not seen as a special kind of support for poor people, but rather as a normal way of moving in the city for a great part of our population,” explains Florianschütz.
With this in mind, the city, which directly administers 220,000 properties in council housing, develops housing projects in all 23 Viennese districts to help encourage a greater social mix.
“By housing we do not only mean a place to sleep,” explains Florianschütz, “but also affordable housing for a large number of people with a corresponding social infrastructure, such as shops, schools, and also art museums. That’s Vienna.”
One of the ways the city manages this is through development of competitions. Last year, in a new, low-traffic area of the city, one project featured several social facilities, green and open spaces and a mobility concept with a communal garage.
This model can be a source of inspiration to other cities that wish to address housing poverty in a way that does not leave low-income households disadvantaged. It is also relevant in the context of debates on the Social Pillar, and in particular in ensuring social cohesion.
“Social housing is a challenge for the city. For us this also means that we firstly, accept this challenge and, secondly, that we want to protect social housing,” says Florianschütz.
A new approach
Currently, the city is implementing a new local strategy to give homeless and houseless people in Vienna a chance to regain control of their lives. This includes taking measures such as offering immediate housing support, including through counselling, for those that have recently faced eviction, and closing overnight shelters in favour of Housing First and long term institutional alternatives.
The Housing First scheme, which prioritises finding permanent housing for those experiencing homelessness, ensures that people “are supported as soon as necessary, and irrespective of their current housing situation,” says Peter Hacker, Executive City Councillor. Moreover, he continues, “80% of new clients of the Viennese Assistance Programme for Homeless People each year are assisted in their own homes,” in this way. The other 20% are beneficiaries of long term institutional alternatives, i.e. supervised housing.
With 1,000,000 current housing units, Vienna has an advantage that other cities do not, but that is also the result of careful planning – and with the city’s population still growing, the city is doing well to keep things in check.