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It's an interesting idea and I'm generally in favor of more social housing. I'd be even more in favor of it not being needed at all. When market rent would be

It's an interesting idea and I'm generally in favor of more social housing. I'd be even more in favor of it not being needed at all. When market rent would be 1,200 yet you pay 800, somebody is paying for that 400. Typically the government, thus tax payers, and it will be subject to political turbulence. Ideally you want so much supply that the market value rent would be 800, as your idea illustrates. The problem, at least over here, is that the naked price is still very high even without any profit motive. Land is expensive because cities are funded by that. And building that home really does cost 150-200K. I'm sure you can find some 50K of wiggle room, but at the end of the day it's still going to cost 350K and rent/mortgage will reflect that.

eigenspace 3y ago
While I somewhat agree with you, I feel compelled to mention that the most derisive term in the lexicon of Economics is "rent seeking behaviour" when they want to describe the behaviour of an actor in an economic system as non-productive, and parasitic, and that terminology is not an accident. It comes from the tendancy of land or property rental markets to quickly become non-productive exercises in wealth extraction by landlords. While it's definitely possible to screw up a market via government intervention, I don't think it's really true that there's a fixed pie here that is being cut up and redistributed by this policy. I think it's better to be thought of as intervening to stop the rental market from going off the rails. Buying land or property in Vienna is expensive, but it's actually not significantly more expensive than comparably sized German cities which don't have comparable social housing programs.