Tools of success

Limited-profit housing

Limited-profit or non-profit organisations focus on what benefits the community. They have limited income, restricted business activities, and they have to reinvest their income in new housing/refurbishment while adhering to specific rental regulations.

Commercial enterprises seek to maximise their profits. In the case of limited- or non-profit organisations, on the other hand, the benefit of the community comes first. This priority is even explicitly set out in a special federal law, Non-Profit Housing Act (or Wohnungsgemeinützigkeitsgesetz, WGG). Limited- or non-profit housing associations must comply with the Limited-Non-Profit Housing Act regulations, which state that rents regulations, which state: Rents are fixed to cover the appropriate cost of land, construction, administration and financing. The rents include a provision dedicated to repairs and long-term maintenance. Nevertheless, housing associations are entitled to make limited profits. These profits have to be reinvested in the purchase of land, refurbishment or new construction. In compensation for the restrictions and limitations, the housing associations are exempted from corporation tax.

Evolution and activities

The foundation of limited- or non-profit housing Housing dates back to the late 19th century when housing conditions in the rapidly growing cities were extremely poor. In the absence of regulation and public support, the first housing co-operatives launched initiatives to improve the housing situation of their members. Later financial public aid supported these initiatives in exchange for regulations. The 20th century brought the establishment of numerous foundations of limited- or non-profit housing co-operatives and companies all over Austria.

Throughout the last 120 years, the Austrian housing co-operatives produced more than one million dwellings, which account for 20 percent of the housing stock. Their annual production is around 15,000 apartments which equals 25-30 percent of the national total. Today the 185 limited- or non-profit housing associations (98 co-operatives and 87 companies) manage more than 920,000 dwellings, of which about 70% are rental apartments, including those in co-operative housing, 30% are owner-occupied. In Vienna, the stock of limited- or non-profit co-operative housing accounts for 205,000 apartments (for rent/co-operative: 170,000).