Overview of the Study
The article āHow Much State and How Much Market? Comparing Social Housing in Berlin and Viennaā appears in German Politics (Vol 32, No 2, 2023) and is authored by Susanne Marquardt, a guest researcher at the WZB Berlin Social Science Center, and Daniel Glaser, an architect and housing expert employed by the Vienna City Administrationās Department for Housing Promotion. The paper analyses the differing socialāhousing systems of Berlin, Germany and Vienna, Austria, examining how state involvement and market mechanisms shape housing affordability and market outcomes.
Institutional Context
Both cities operate within comparable welfareāstate frameworks and share similar economic conditions, yet their housing policies diverge sharply. Berlin follows a marketāoriented approach with diminishing public subsidies, while Vienna maintains a strong, permanent state presence through a limitedāprofit sector and a housing tax that finances extensive socialāhousing programmes. The authors situate these differences within a neoāinstitutionalist perspective that stresses the role of institutional arrangements in market performance.
Key Quantitative Findings
- Share of social housing: Berlin 5.9 % of total housing stock versus Vienna 43.1 %.
- Population (2018): Berlin 3.72 million; Vienna 1.89 million.
- New construction (2018): Berlin 12,814 units; Vienna 10,005 units.
- Socialāhousing output 2014ā2018: Berlin 1,754 units; Vienna 19,630 units.
- Subsidy per unit: Berlin up to ā¬90,000 (ā ā¬1,300 /m²); Vienna ā¬40ā60 000 (ā ā¬850 /m²).
- Rent levels (average ā¬/m²): Berlin private 10.80, social 6.40; Vienna private 11.00, social 4.65.
- Overāburdened households: 14.5 % in Germany vs 7.1 % in Austria (Eurostat, 2018).
Policy Mechanisms in Berlin
Berlinās system relies on temporary capital subsidies, meansātested revenue subsidies and a retreat of the state from active housing provision since the 1980s. Public funding shifted from federal to municipal sources after 2006, and recent programmes offer shortāterm rent controls lasting up to thirty years. The limitedāprofit sector was largely dismantled in 1990, reducing the incentive to retain affordable rent levels.
Policy Mechanisms in Vienna
Viennaās model combines a dedicated housing tax (ā 1 % of wages) with a robust limitedāprofit housing association (LPHA) sector. LPHAs must reinvest profits, adhere to costābased rent calculations, and maintain rent control indefinitely. Subsidies are lower per unit, but the framework ensures permanent affordability and higher construction efficiency (approximately 20 % lower costs than commercial developers). The city also employs landāuse tools, such as mandatory socialāhousing quotas in rezoned areas.
Institutional Embedding and Outcomes
The authors argue that Viennaās embedded institutional architectureātax incentives, legal protections for limitedāprofit housing, and coordinated landāpolicyācreates a selfāreinforcing cycle of affordable supply. Berlinās fragmented, adāhoc measures lack such reinforcement, leading to a declining socialāhousing stock (a 70 % reduction in subsidised units since the 1990s) and rents that sometimes exceed privateāmarket levels.
Comparative Implications
The analysis concludes that Viennaās permanent state involvement yields higher socialāhousing shares, lower rents, and a more equitable burden on households. Berlinās reliance on temporary marketāoriented subsidies results in insufficient supply, higher overāburdening, and limited longāterm impact. The authors suggest that for Berlin to improve affordability, it would need to adopt more permanent financing mechanisms, possibly reviving limitedāprofit legislation or securing longāterm landārights.
Relevance for Sustainable Housing in Europe
For a panāEuropean audience, the study highlights how durable institutional designs can deliver sustainable, affordable housing at scale. Key takeāaways include the importance of stable public financing, legal frameworks that bind private actors to longāterm affordability, and coordinated landāuse policies. The stark contrast between Berlin and Vienna offers a evidenceābased reference for policymakers seeking to balance state intervention with market participation to achieve sustainable urban housing outcomes.

