Affordable housing is possible in Tyrol, if at all, in apartments owned by non-profit property developers. They manage 70,000 residential units, and an average of 1,275 new ones are added each year. But here, too, tenants are not immune to price increases: it won’t stay warm at EUR 8.30 per square meter.
The 13 non-profit housing developers brought a total of 1035 apartments onto the market in 2022, significantly fewer than in previous years. The seven-year average is 1275 units. The reason for the “kink” was the very good capacity utilization of the construction industry, due to subsidies: “Sometimes we didn’t get any more offers at all,” reports Franz Mariacher, chairman of the property developers’ association to set up, manage and rehabilitate for broad sections of the population. You have to work to cover your costs and are only allowed to make limited profits. That’s what the Non-Profit Act says. With an annual construction output of more than 300 million euros, the housing associations are important partners of the local economy. The importance is also reflected in the fact that about one in five people in Tyrol lives under the roof of a non-profit property developer. Rent around 40 percent below the free market The average rent for the newly built apartments in 2022 was 8.30 euros including heating and heating Management costs, VAT and pro rata underground parking space rent. “When comparing these values in recent years, the non-profits were usually 30 to 40 percent below the market price,” Mariacher notes: “But the €8.30 will not be sustainable as a result of general inflation.” This affects some tenants several times: In January, the “Krone” reported on Tyrolean residential complexes of non-profit organizations in which the tenants are heavily burdened by a combination of several factors such as increased building lease interest and a jump in housing subsidies. After consultation with the tenants concerned, it is said that the all-clear cannot be given here. A slight all-clear could also be given for 2024. There is hope that construction costs will go down. The companies have already signaled that they “need work” in the year after next. “But we can’t determine the prices yet.” These are “still relatively high,” says Mariacher. Dornauer is aiming for new regulations The consistently high demand has led to a construction boom in recent years, explains the LHStv state councilor responsible for housing. Georg Dornauer: “While the non-profit developers have been building almost 1,300 subsidized apartments per year since 2012, the private developers have more than doubled their completions from around 1,000 to 2,200 residential units.” The 13 non-profit developers are currently working on 64 new buildings in the communities. Of the 13, seven are actively involved in residential construction. As of April 1st, the benchmark rents are set to rise, which is causing a great deal of excitement, especially in eastern Austria. In Tyrol, this only affects a small percentage. The proportion of non-profit organizations is extremely low, explains Chairman Mariacher. Adaptation to ensure residential construction This has contributed to an enormous shortage of free building land and a multiplication of land prices within a decade, says Dornauer: “Right now we need affordable apartments more urgently than ever. The non-profit property developers in Tyrol are important partners here. However, the sharp rise in construction costs is causing problems for subsidized housing. As early as the end of April, we will raise the limit for reasonable, eligible total construction costs as required.”
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