URBAN LAND LEASE AND SOCIAL HOUSING PROGRAMS

In central European countries like Austria and Germany local governmen ts typically use upfront public grants to assist private investment in social rented housing. Producer subsidies of this type are often crit icised for creating rationing effects, crowding out private investment and other negative externalities. This paper sets out a scheme for un rationed public grants which serves to co-ordinate investment processe s over time and to offer subsequent generations equal access to housin g. Drawing on examples of social rented housing in Vienna, the paper c ompares previous methods of public assistance with the grant scheme re cently implemented by the Vienna government. The paper concludes by pr oposing a model for urban land leasing and derives the minimum size of public grant necessary to secure efficient land provision in the futu re.