Land Management in Vienna and Hungary

Affordable housing is a pressing issue in cities worldwide. As urban populations grow and housing costs rise, governments and planners are seeking effective ways to ensure that housing remains accessible to all.

In this blog post, we analyze Vienna's innovative land management strategies and the history of housing privatization in Hungary. The outcome focuses on how these approaches can offer valuable insights for planners globally.

Vienna's Approach: Regulated Affordability Through Policy Innovation

Map of Vienna (Google Earth image © 2025)

In Vienna, a substantial portion of the housing stock is managed through the limited-profit housing sector, overseen by non-profit housing associations.

According to Litschauer et al. (2023) in their article, "Provision of Affordable Housing in Times of Housing Crisis: The Case of Vienna's Limited-Profit Housing Sector," these associations manage approximately 181,000 rental units, accounting for 21 percent of primary residences in the city.

The Nonprofit Housing Act caps rental profits at five percent, ensuring that any surplus is reinvested into new housing construction. This system operates against a backdrop of rising construction and land costs, with land prices increasing from 490 euros to 1,100 euros per square meter between 2010 and 2019.

To support this sector, Vienna employs the developer competition system, known as Bauträgerwettbewerb. This process allocates larger building plots for social housing through a tendering procedure.

Rather than awarding land to the highest bidder, a jury of experts in architecture, urban planning, and social sustainability evaluates proposals based on quality criteria — social sustainability, architecture, ecology, and economy. The land price is fixed in advance, keeping investment costs low and enabling non-profit associations to participate.

This system encourages innovative housing designs and fosters collaboration among developers, planners, and the community, ensuring that subsidized housing meets diverse needs.

Hungary's Approach: Housing Privatization and Its Social Impacts

Map of Hungary (Google Earth image © 2025)

Hungary's housing market has followed a different trajectory, shaped by housing privatization. In their article, "Housing Financialisation as a Tool of Managing Dependent Integration: The Case of Hungary 2008-2024," Pósfai and Sokol describe how housing privatization was promoted by different speculation groups.

Before the 2008 financial crisis, the market relied heavily on foreign mortgages. After the crisis, the government introduced subsidized loans and mortgages to stimulate activity, but this did not address the shortage of housing supply.

Policies since 2015 have coincided with increased housing price inflation, driven by investor-buyers and foreign capital. As a result, housing has increasingly become a financial asset, creating challenges for low-income households seeking stable, affordable options.

Land management strategies, as seen in Vienna and Hungary, illustrate the varied ways that land policies shape housing outcomes.

Vienna's developer competition system demonstrates how direct control over land allocation can support subsidized housing development. Hungary's experience highlights the effects of market-driven financialization on housing affordability. These examples point to broader strategies that planners can consider.

One such strategy is land banking, where governments or non-profit organizations acquire and hold land for future affordable housing projects. Vienna's approach incorporates elements of this by reserving plots for subsidized development, helping to limit speculation.

Another option is increasing housing supply through market mechanisms. For instance, the American Planning Association's blog post, "Solving Chicago's Affordable Housing Conundrum," explores how building more market-rate housing in desirable areas can stabilize regional prices. This approach can complement direct interventions like subsidies or zoning adjustments.

The principle of managing land to balance supply and affordability is relevant across contexts. Planners in cities facing rapid gentrification might explore reserving land for public use, while those in highly financialized markets could consider regulations to curb speculative investment. Adapting these strategies to local conditions offers a pathway to more equitable housing markets.

Shaping the Future of Affordable Housing

Land management is a vital tool for addressing the affordable housing challenge. Whether through structured systems like Vienna's developer competitions or market-driven adjustments like those proposed in Chicago, planners have options to influence housing outcomes.

By examining diverse approaches and tailoring them to local needs, cities can create sustainable housing solutions. As urban growth continues, innovative land management will play a key role in ensuring housing accessibility. Planners worldwide are encouraged to explore these strategies, leveraging land as a resource to meet the evolving demands of their communities.

Top image: iStock/Getty Images Plus/ CHUNYIP WONG