2023-10-15 07:31:05
The City of Vienna is investing an additional around 115 million euros to create additional affordable living space with the highest quality of living, which is in high demand
Vienna (OTS) – The international housing market has come under noticeable pressure in recent years. The economic conditions such as increased construction costs and the international interest rate landscape have noticeably increased the challenges for non-profit housing construction. The City of Vienna is increasing the funding rates and will be offering interest-free state loans in tense times in order to guarantee the long-term expansion of the internationally renowned Viennese housing model. The amendment to the new building regulations was approved by the state government on October 10th. decided.
“With the amendment to the new building regulations, another milestone has been set on the path to the future of social housing. The far-sighted expansion of the world-renowned Viennese housing model is Vienna’s next step in further developing its role as the world capital of social housing. This includes enabling our partners at non-profit housing developers to continue building to cover their costs, closing gaps in construction and making small-scale construction more possible. This investment is a sustainable investment in the future that pays off many times over. This ensures that there will be no sell-off of socially affordable housing in the future and that the entry-level housing model of SMART apartments will be further developed,” says Vice Mayor and Housing Councilor Kathrin Gaál.
“Subsidized housing makes an important contribution to the Vienna housing market. By adapting the funding rates to the current challenging market conditions in the construction sector, we are ensuring that sufficient living space will continue to be available to meet the different needs of all Viennese in the future. In combination with the renovation and decarbonization ordinance, we ensure that both new housing construction and the existing housing stock are well secured for the future,” says NEOS Vienna housing spokeswoman Selma Arapovic.
“The amended new building regulations are a milestone for subsidized housing in Vienna. After the regulation already took the increased construction costs into account in 2022, this amendment now responds effectively to the increased financing costs and the current high interest rates. It enables the continuation of the Vienna model and is another example of the constructive cooperation between the City of Vienna and non-profit property developers for the benefit of the Viennese population. It will give decisive impetus to new construction and enable the construction of new subsidized apartments – predominantly for rent. It is therefore a step towards a better future and also towards overcoming the current economic crisis,” explains the chairman of the non-profit building associations LG Vienna Michael Gehbauer.
Higher funding rates guarantee affordable housing
Vienna is continuously growing as the most livable city in the world and only recently surpassed the 2 million population mark. The world-renowned Viennese housing model has successfully relied heavily on subsidized housing for over 100 years. The City of Vienna is facing the challenges of the future and is increasingly promoting the expansion of affordable housing with the highest sustainable living quality. When amending the regulation, special attention was also paid to the promotion of small-volume construction projects such as densification, support for the construction of SMART apartments and NEW community construction.
Specifically, the main funding rates were increased by around 12% (100 euros/m²), the funding rates for smaller construction projects under 2000 m² were increased by around 25% (250 euros/m²) and the funding rates for SMART apartments and municipal buildings were NEW (+ 92%) almost doubled. In addition, the subsidy for small construction sites increases by 150% in the form of a construction cost subsidy. For the first time, construction projects with special requirements (e.g. monument protection, filling gaps, using innovative construction techniques, etc.) are given special funding.
City of Vienna as a saving anchor in times of high interest rates
The dependence of housing developers on the capital market endangers the implementation of non-profit housing projects, especially in times of high interest rates. The City of Vienna will act as a stabilizer in the future and in this case will offer an interest-free state loan for subsidized housing. As soon as the 6-month Euribor exceeds a threshold of 2.5% and there is no purchase option, the state of Vienna relieves the developer and, accordingly, the tenants by granting an interest-free state loan when the main funding and the additional SMART funding are used cheaper rents.
If the capital market stabilizes once more and the 6-month Euribor falls below 2.5%, state loans with an interest rate of 1% will once more be granted for future approved state loans.
The amendment to the New Building Ordinance 2007 was approved by the state government at the meeting on October 10, 2023 and will come into force immediately following publication in the next few days. This regulation is accompanied by the Renovation and Decarbonization Ordinance, which will come into force in spring 2024. /Ending
Questions & Contact:
Stephan Grundei
Media spokesperson Vice Mayor Gaal
Tel: 01/ 4000 98057
E-Mail: stephan.grundei@wien.gv.at
1697356198
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