Innsbruck declares a ‘Housing Emergency’

The city can now trigger a 50-year-old law, which would give authorities the right to intervene in the housing market, and even to expropriate property

Yesterday, after a vote in the local council, the Austrian city of Innsbruck declared a ‘Housing Emergency’. With the new declaration, authorities will have the right to use the Land Protection Act (Bodenbeschaffungsgesetz), a forgotten piece of legislation, that would give the local government powers to interfere directly in the housing market.

The rights granted by the Land Protection Act range from the right of first refusal for property deals to expropriation, in its most extreme. The law has been on the books since 1974, however, it has never been used, meaning that whatever Innsbruck decides to do with its newfound power would set a precedent.

The housing shortage in Innsbruck

The Land Protection Act was first introduced in 1974, during the second term of Austrian Socialist Prime Minister Bruno Kreisky, when the SPÖ had a majority in government. Kreisky was Austria's longest-governing chancellor. He started his first term in 1970 and finished his last term in 1983.

According to a report by the ORF, the Austrian National Broadcasting Network, the question of using the Land Protection Act was brought up by the Innsbruck SPÖ, who are currently coalition partners to the city’s green mayor - Georg Willi.

The Land Protection Act, however, cannot be triggered on a whim, there needs to be an extreme ‘quantitative need for housing’. To declare a housing emergency, at least 2% of the population needs to be registered as looking for housing and recognised as in need by local housing authorities, with no more social housing available.

Currently, according to official data, there are around 2,000 applications for social housing, accounting for 4,300 people – well above the 2% threshold set at around 2,000 people.  

Importantly, the housing issue in Innsbruck is not new and the government has tried to introduce measures to calm the market and boost social housing. They have also tried to introduce a vacancy tax and curb the number of Airbnbs eating up rental properties in the city. However, these policies seem to have missed the mark.

Intervention in the property market

While the Land Protection Act does allow the local government to get quite deep into interfering with the property market, there are definitely lines that the city is not willing to cross. According to a statement by Deputy Mayor Markus Lassenberger, expropriation is definitely one of them.

Furthermore, according to the Land Protection Act, citizens whose property has been expropriated, deserve monetary compensation and this is not something that a cash-strapped municipality could do on a scale.

At the same time, because the Land Protection Act has not been used since its inception in the 1970s, authorities expect to have a hard time enforcing even the slightest interventions. Officials have said they have to present a concrete plan of action because they expect citizens to challenge any decisions based on the law in court.

However, the local government does plan to use the Right of First Refusal, meaning they can veto certain land deals. This applies specifically to properties larger than 2,000 square metres, which are designated for construction. Currently, the city has already identified 80 cases, where they are eligible for an intervention.