Trade union boss:

Government’s housing package is not reaching the building sector

Muchitsch: "10,000 workers have already lost their jobs due to the crisis."

(Bild: Krone KREATIV/Daniel Scharinger, Gewerkschaft Bau-Holz)

Whether renting or owning, housing poses financial challenges for many. The high prices for property are mainly due to the short supply. Construction unionist Josef Muchitsch criticizes in an interview with "Krone": "Not a single euro of the housing package has reached a construction site yet!"

Josef Muchitsch, head of the Bau-Holz trade union and Social Democrat member of the National Council, says in an interview with "Krone": "From 2017 to 2019, we built too much, with 85,000 residential units being built each year. Now it's the other way around and demand is greater than supply."

Muchitsch calls for a nationwide framework plan
He misses an overall plan. "Construction in Austria is a piecemeal affair between the federal states." Muchitsch, like his party colleague and Mayor of Vienna Michael Ludwig, is therefore calling for a Ministry of Housing and Construction and a nationwide framework plan.

As large amounts of funding are involved here, nationwide coordination is also important. The government should plan with foresight so that there is neither overheating nor too little construction. "The demand must be covered," says Muchitsch. This planning certainty should also apply to climate measures. "Otherwise people will put off projects because they don't know what will happen next. In principle, it makes sense to make old houses climate-ready and renovate them. This also helps companies in the construction industry."

Housing subsidy is a subsidy from the federal states
In order to have funds available, the earmarking of housing subsidies should be reintroduced. "At the moment, this is a basket of money for the federal states, which they use to plug their budget holes," says the red trade unionist. This is because a large proportion of the housing subsidies are not actually being used for projects intended for this purpose, which in turn slows down new construction.

Muchitsch gives the government a poor report card when it comes to combating inflation.

(Bild: APA/Roland Schlager)

Muchitsch also sees an urgent need for action in the financing of owner-occupied homes. The stricter credit rules make it almost impossible for many households to build a house. Although there are monetary policy reasons for the stricter lending rules, "we have to do something when we see that the regional economy is running out of steam", says Muchitsch.

Not a single euro of the housing package has yet reached the construction site
This was also the aim of the government's housing package. In an interview with Krone, Muchitsch sees this as nothing more than an "effort" by the government that came far too late: "Not a single euro of the housing package has yet reached a construction site." This is because the measures will only take effect after a delay, as there are long lead times for construction and many projects first have to get off the ground.

It is to be hoped that it will arrive in 2025. Otherwise there is a risk of further job losses: "10,000 construction workers have already lost their jobs due to the crisis in residential construction. If it continues like this, it will go on and on. And we won't get these skilled workers back," says Muchitsch, who sees no light at the end of the tunnel.

In addition to new construction, the rental market is the second major "construction site". Muchitsch analyzes: "First the warm rent was driven up due to energy prices and then the cold rent was also adjusted. But if nothing is invested, this cannot be justified." He is therefore calling for a rent freeze, especially if owners are not putting any money into the rented property.

In fact, as reported, costs have recently risen at record rates almost everywhere. And this now comes on top of numerous other price increases, such as for food.

Muchitsch, who is also his party's social affairs spokesman, says: "It is significant that Austria is at the bottom of the league in Western Europe when it comes to both combating inflation and economic growth. You have to come last twice to achieve that."