Social mix and the city: Council housing and neighbourhood income inequality in Vienna

Does the provision of public housing foster residential segregation or can it promote the social mix? Social mix describes the diversity of a neighbourhood’s residents in terms of various characteristics such as ethnicity, income, or housing tenure. Social mixing is an important goal in the policy agenda of many urban planners to avoid myriad social and economic tensions. A lack of social mix can hinder interaction among members of different social groups, thus impede social mobility, reduce well-being, and undermine support for the welfare state. One of many policies to improve the social mix in cities is the provision of adequate and affordable social housing. However, the role of such policies is disputed as public housing might be counterproductive and increase residential segregation if it focuses on low-income areas only.

The Austrian capital of Vienna serves as textbook example for traditional council housing as municipal flats account for roughly a quarter of all residential dwellings in the city.  During the interwar period, the social democratic city government implemented a comprehensive welfare program and built 60,000 municipal flats to tackle the problems of,  at that time, a socially divided city with high levels of segregation, abject poverty, and poor housing conditions. The construction of social housing was resumed after World War II and its provision remained a key element of Viennese welfare policies in the 20^th century.

In our paper, we study whether the provision of council housing is associated with a higher social mix in neighbourhoods. We focus on the income component of the social mix and assess the income variation in neighbourhoods. High inequality within neighbourhoods indicates that higher-income and lower-income individuals live next door to each other. To this end, we analyse administrative wage tax data at a small-scale raster grid of 500x500 meter using the within-neighbourhood Gini index of gross earnings as an indicator for the social mix. Cluster analysis and spatial econometric models show that while council housing is correlated with lower income areas, it is associated with slightly higher neighbourhood income inequality, i.e. more diverse neighbourhoods.

This finding is rather surprising as it differs from the pattern of many other cities where social housing is linked to stronger residential segregation. The difference might be explained by the high number and dispersion of council houses throughout Vienna, even in more affluent areas. Another important aspect is that council housing has traditionally been accessible to broad parts of the population and not been restricted to low-income applicants. In addition, Vienna has refrained from anchoring privatisation mechanisms in council housing which is why the city’s high share of social housing is retained to this day.

From a policy perspective, our findings suggest that the broad provision of council housing in the Austrian capital continues to successfully target low- and middle-income individuals and at the same time promotes a high social mix rather than residential segregation. However, the Vienna housing model is not unchallenged. Despite its resilient tradition dating back a hundred years, the regulatory framework of the housing market has changed since the 1980s with tendencies of recommodification. Only recently, the city has decided to put the construction of council housing back on the agenda. Our results show that extensive, well-designed, and well-distributed public housing policies can contribute to a higher social mix in cities.

Read the accompanying article on Urban Studies OnlineFirst here.