immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Raum

  • Affordable living in Zug

    Affordable living in Zug

    The canton of Zug and the city of Zug suffer even more than other cantons and cities from a lack of living space. The canton of Zug has the lowest vacancy rate in the country at 0.2% for the fourth year in a row. The lack of supply and the persistently high demand are leading to strong competition for the few advertised rental flats: the re-letting period is record-breakingly short. There are plenty of affluent tenants moving in and out who are prepared to pay ever higher rents¹.

    Because asking rents are now 50% higher than the Swiss average, complaints that rental flats are no longer affordable have spread far into the middle classes². Even those with normal household incomes who want to move or relocate to the canton have little chance of accessing the housing on offer.

    In this context, the question arises as to what profit-orientated owners who have or would like to develop housing stock in the canton and city of Zug can contribute to the provision of housing for broad sections of the population.

    How should affordable housing be defined?
    The first question is how “affordable” housing should be defined. There is an object-orientated, a market-orientated and a target group-orientated approach³. Affordable housing can be defined as housing rents that are calculated using the maximum fixed investment costs for a residential property. For this calculation to work for yield-orientated owners, a consensus is needed on what constitutes a sensible limit for investment costs. The market-oriented approach categorises low-priced residential rents in certain quantiles of market rents. This requires a consensus on which quantiles are affordable. Finally, affordable housing rents are defined as those that are financially viable for tenants. This requires a consensus that households should not spend more than a third of their gross income – or more generously, their taxable income – on rent, for example.

    Room for manoeuvre via the subject-oriented approach
    The approach based on financial affordability is the most meaningful for a broad-based housing supply. Unlike the approach based on investment costs, this approach recognises that many people in the canton of Zug earn more than in other cantons and can therefore afford higher rents (Fig. 1). However, unlike the approach using the quantiles of market rents, it is not based on the willingness to pay of those moving in and out, but on the real income of the population. This approach helps to target the needs of specific income groups.

    An affordable flat for a person from the lower middle class living alone, who earns between 70 and 100% of the median income, should therefore cost between CHF 1,400 and 1,900 in the city of Zug. How much living space is offered for the price is decided by the provider based on his assessment of the marketability of a flat. Because affordability is based on the unit price of the flat and not the price per square metre, yield-oriented investors have more leeway to integrate affordable housing into their profitability calculations.

    Optimising the distribution of existing affordable housing
    Building flats takes a long time and is often associated with uncertain planning processes. Owners and investors are also not free to decide where and how much additional living space they want to realise. Owners have direct options for action with their portfolio: they can contribute to supplying the wider population if they optimise the distribution of their vacant rental flats. Every change of tenant offers the opportunity to consider the most suitable tenant in line with the “best owner principle”. Owners can instruct lettings teams to maximise the affordability of rental properties that are affordable to the middle class and choose the tenant who can least afford the property – assuming a full salary, for example. Letting teams simply need a matrix that shows them the maximum rental prices affordable for the middle class (or the targeted income group) for each number of rooms. If a vacant flat in the corresponding price range becomes available, the rule would apply.

    Conclusion
    In order to ease the situation in the housing market, the lengthy tasks of reducing barriers to housing construction and developing a cross-party understanding of how affordable housing is defined and how its provision should be regulated must be tackled. In the meantime, yield-orientated owners can make a contribution by approaching the provision of affordable housing with a subject-orientated approach that fits into their market logic. In doing so, they also remain fair to the legitimate interests of their direct stakeholders.

  • How data is changing our cities

    How data is changing our cities

    They know what we buy, who we meet and where we drive or walk. Airbnb, Amazon, DriveNow, Google Maps, Lieferando, Lime and Uber are just a small selection of platforms and services that collect data on mobility and purchasing behavior. With the help of this wealth of data, technology groups are redesigning urban spaces for the optimal use of their services. A phenomenon that can be described by the term platform urbanism. “Technology companies have immense knowledge about urban mobility. They use this know-how in contact with city administrations, for example to create new transport systems,” explains the art and architecture theorist Peter Mörtenböck. He knows: the architecture departments of Alphabet and Amazon are creating the data-supported districts of tomorrow.

    Peter Mörtenböck and his team wanted to know: How do data, the public and urban spaces change each other? Supported by the Austrian Science Fund FWF, the researchers conducted basic artistic research over a period of five years, held conferences, developed exhibitions, published two books and established collaborations. During this project period, more than 100 people were involved in research.

    International artistic research
     The process was international. Knowledge about video surveillance was collected in London. A trip to Tallinn provided insights into e-governance, another to Mumbai about environments that are only rudimentarily shaped by technology groups. The core team visited Silicon Valley several times. The researchers held discussions with architects and employees from Apple, Meta and Alphabet. “In particular, we looked at the campus architecture and the plans for expanding it with new residential areas. These are prototypes for future housing estates,” explains Mörtenböck. The role of patents was also presented. "The Steve Jobs Theater on the Apple campus and the design of the Amazon department stores are just a few examples of patented designs," explains the visual culture professor.

    Artistic research approaches, for example in the form of drawings and animations, helped the researchers to question their own assumptions on topics such as the public nature of data. Creative approaches also have other benefits. “One of our major concerns was to convey how each and every individual is involved in data production. Knowing how the environment is changing insidiously gives you an idea of what data is being collected and what it can do. Artistic research helps to find an interface with the public,” says Mörtenböck. For example, the project team members Lovro Koncar-Gamulin and Christian Frieß developed video installations and animations as visual translations of the research process. Discussions were held with interested parties in Carinthia, Styria and Vorarlberg. Debates were held with international researchers and experts at conferences in Vienna, London and Los Angeles.