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LIMITED-PROFIT HOUSING CONSTRUCTION

High-quality housing at fair prices

This priority is expressly formulated in a federal law, the Limited-Profit Housing Act (WGG). Non-profit or limited-profit housing developers must comply with WGG provisions, which stipulate that rents should be fixed to cover the respective costs of land, construction, administration and financing.

Rents also comprise a reserve for repairs and long-term maintenance. As their name says, limited-profit housing developers may make profits only to a limited extent. In turn, these profits must be reinvested in the purchase of land, refurbishment projects or new construction ventures. In compensation for these restrictions and requirements, limited-profit housing developers are exempt from corporate tax.

Full text of the law (in German) (WGG)
​​​​​​​https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=10011509​​​​​​​

Source: Austrian Federation of Limited-Profit Housing Associations (GBV), 2021

Evolution and activities

The roots of non-profit and limited-profit housing construction go back to the late 19th century, when housing conditions in the rapidly growing cities were extremely poor. In the absence of legal provisions and public support, the first co-operatives launched initiatives to improve the housing situation of their members. Later, public financial aid supported these initiatives in exchange for specific rules. In the 20th century, numerous non-profit and limited-profit housing associations and co-operatives were established all over Austria.

Throughout the past 120 years, Austria’s non-profit and limited-profit housing associations and co-operatives produced over a million dwellings, which account for 20 percent of the entire built housing stock. Their annual production is around 15,000 units or 25 to 30 percent of the national total.

At the moment, 57 limited-profit housing associations administer approx. 200,000 rental and co-operative flats in Vienna. Every year, roughly 4,000 units are built by non- or limited-profit housing co-operatives, which tallies at close to 42 percent of all housing production for Vienna. In addition, these housing developers invest approx. Euro 933 million in the construction of new dwellings and around Euro 311 million in the rehabilitation and refurbishment of residential buildings.