Study: Affordable Housing in Graz

Policy Options, Impacts, and the Role of Nonprofit Housing Developers – An Evidence-Based Framework for Decision-Making

Providing affordable housing is one of the key economic and social challenges facing growing cities. Graz has been experiencing strong population growth for years, while rising construction costs, higher financing costs, and regulatory requirements are slowing down new construction. The result is increasing pressure on the housing market and rising housing costs.

The new EcoAustria study, “Affordable Housing in Graz: Policy Options, Impacts, and the Role of Non-Profit Housing Developers—An Evidence-Based Basis for Decision-Making,” commissioned by ÖWG , analyzes structural developments in the Graz housing market and evaluates key housing policy instruments in terms of their effectiveness, fiscal implications, and long-term effects.

The analysis focuses on rent caps, municipal housing, and nonprofit housing, as well as the question of which instruments are suitable in the long term for providing affordable housing for broad segments of the population. The results show that supply-side measures, in particular, are crucial for sustainably counteracting rising housing costs. Non-profit housing plays a central role in this regard, as it can create housing under relatively stable conditions without directly burdening municipal budgets. At the same time, investments in non-profit housing generate positive regional economic effects and have a dampening effect on general rent levels.

Furthermore, the study highlights the importance of land-use zoning and densification policies. Particularly in well-connected areas, a targeted increase in building densities can expand the housing supply and thus help alleviate pressure on the housing market in the long term. At the same time, the analysis shows that, due to fiscal and structural challenges, municipal housing construction in Graz is currently only of limited suitability as a tool for creating additional affordable housing. While rent caps may provide short-term relief, economic evidence suggests they pose risks to investment and long-term supply development.

Overall, the study makes it clear that affordable housing cannot be achieved through a single measure, but rather requires a coordinated combination of expanding supply, reliable framework conditions, and institutional strength.