Why Vienna (Austria) is no longer so different

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Society

This is what the explosive rise in housing and real estate costs across Europe and in Austria reveals about our society.

Vienna, the city with council housing in the middle of areas with a villa. This was only one of the milestones that made this city so worth living and exemplary. This statement against social separation has become increasingly quiet in the years since the last financial crisis in 2008. The ECB’s zero interest rate policy and the alleged immigration factor have caused property prices to rise by more than 40% on average over the last ten years.

“Concrete gold” instead of savings book

For ordinary earners who are not in the fortunate position of having the prospect of a relevant inheritance, the creation of property has become almost impossible in this climate. However, there is no way out of this situation: rents, too, have almost exploded in recent years compared to wage developments.

The prices of subsidised cooperative and council housing have also risen significantly. The cities also play an inglorious role as price drivers of real estate speculation. Vienna is showing the first foreseeable effects of the current situation due to a decline in social mix. It is also a clear reflection of ownership in the country.

People with normal or low incomes are, as so often, the main victims of this development. It has become almost impossible for this generation to independently acquire property, also in view of wage developments, inflation rates of the cost of living and uncertainties in the labour market.

Thus the already existing extreme gap between rich and poor will widen even further, with all the historically known consequences of such a development.

The following quote sums up this situation:

While the dentist receives higher rents from his investment apartment, living becomes more expensive for his surgery assistant“, explains the economist, Prof. Elisabeth Springler.

This development does not even make sense from a conventional, capitalistic/market-economy point of view.
Because if housing becomes a luxury good, the money for consumer goods is missing which thereby weakens the individual as a market player. You have to live – there are hardly any possibilities to save money. In the world of consumerism, people will then tend to turn to cheaper products, which in turn mostly come from exploitation, as the examples of clothing, electronics, food, etc highlight.

This decreasing purchasing power will consolidate international exploitation conditions and the actions of large corporations in the long term. The much-cited power of the consumer then almost completely degenerates into a farce.

But what does all this say about our social order?

To my knowledge, the fact that “living is a human right ” appears in none of the numerous media reports about constantly rising housing costs.

This gives the impression that it is “okay” if living space becomes more and more expensive because, in the market economy/capitalist sense, it is a commodity like any other whose price is ultimately determined by supply and demand.

According to this logic, the profit quest of real estate and land speculators and “normal owning market participants” in the real estate market is systemically much higher than the basic need and human right to a “roof over one’s head“. But as it is, as mentioned, a basic need, it is in fact by no means so. In view of this fact, even the cynical standard excuse of numerous “system profiteers” loses its effect: “If only you had learned something properly” because even higher earners are increasingly confronted with fears of decline.

From a psychological point of view, the potential threat of withdrawal of a basic need means high emotional and psychological stress, which is inevitably reflected in areas of mental and physical health. Many social relationships also suffer greatly from increased economic pressure, for example when partners or family members are forced to live under one roof. This, in turn, is reflected in the recently published statistics on ever-increasing rates of depression and burnout.

From a social point of view, such a development, which puts pressure on the majority of people, is in every respect fatal for peaceful civilised co-existence. Only recently, the head of the NEOS (a liberal political party in Austria), Matthias Strolz, issued a warning against the situation that we would soon have to build high fences around the villas in the thirteenth district in order to “get a grip on the social unrest“.

London shows where this development can lead if we do not tackle it in time. More and more people, especially in the service sector, have a job in the city but have to commute several hours a day to the surrounding area due to unaffordable housing prices. The message here is: “You may work here, but you may not live here – you are not welcome.” But why look to “faraway” London? At the border of Austria, Munich shows how fatal this development is for social co-existence. In an article for the Deutschlandfunk, it is summed up particularly clearly:

Doctors in Munich warn that sick children will not be guaranteed appropriate care. Because nursing staff cannot afford an apartment, there is not enough nursing staff.

Economic laws versus laws of nature

Another aspect that is not highlighted – consciously or unconsciously – is the fact that the city is highly energy-efficient: short distances, compactly organised, centralised, and, with good traffic management, also time-saving. Apart from the disadvantages of city life, such as traffic noise, air quality, the sometimes too high population density, and the unfortunately often occurring loneliness of the individual, the organisational form “city” is potentially energy-saving.

However, since everything is subject to the overriding principle of “supply and demand“, cities are expensive compared to more energy-intensive, scattered rural life. Such “trivialities” are irrelevant for our autistic, profit-oriented system.

In the next article, I would like to discuss alternatives to this destructive development and point out that there are certainly possibilities to escape this madness to some extent.

Translation German-English: Anna Dichen

Credits

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30969800766_5ba2a81b13_o 30969800766_5ba2a81b13_o Matthias Ripp CC BY 2.0