How are places tackling the global housing crisis?

Overlook of classic Vienna neighborhood at sunset.

Housing affordability and availability have reached crisis levels in cities worldwide. As property prices soar and local residents struggle to find homes, governments are implementing increasingly bold – and sometimes controversial – strategies to address these challenges.

From 100% buyer taxes to taxing empty homes, here are some of the most innovative approaches being tested around the world to increase the housing stock and bring price increases under some level of control:

  1. Non-EU Buyer Tax

  2. Social Housing at Scale

  3. Direct Government Housing Development

  4. Data-Driven Rent Controls

  5. Empty Homes Tax

  6. Flexible Zoning Reform

  7. Investment Visa Restrictions

  8. Vacant Property Activation

  9. Community Land Trusts

  10. Owner-Occupancy Requirements

  11. Inclusive Development Mandates

  12. Price-Controlled Ownership

  13. Vacation Rental Bans

We dive into each one, with links to the examples from across the world.

Non-EU Buyer Tax

Spain's proposed 100% tax represents one of the most aggressive approaches to foreign buyer restrictions. This follows similar but less severe measures in Canada (25% foreign buyer tax) and Denmark's restrictions on non-EU purchases, all aimed at prioritizing local residents over international investors.

The effectiveness of such taxes remains debated. Spain's more aggressive approach aims to create a strong deterrent, though critics argue it could deter beneficial investment and potentially violate EU principles of capital movement. Nevertheless, France and Portugal are among those considering similar policies.

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Social Housing at Scale

Vienna's model goes beyond traditional public housing by creating truly mixed-income communities. The city owns and manages about 220,000 apartments, but crucially, these aren't just for low-income residents - the high income caps ensure middle-class professionals can also access these homes, preventing stigmatization.

The program's success relies on consistent political support and substantial public investment. Vienna dedicates significant tax revenue to housing and maintains strict quality standards for construction and maintenance. This long-term commitment has resulted in some of the most affordable and high-quality public housing in the world, with residents paying approximately 25% of the market rate.

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Direct Government Housing Development

Singapore's Housing Development Board (HDB) serves as both developer and housing authority. Unlike most public housing programs, it focuses on homeownership rather than rental, creating a unique model where the government actively shapes the housing market while helping citizens build wealth.

The system includes ethnic integration policies to prevent enclaves, and properties are sold on 99-year leases with regulated resale conditions. HDB flats can be resold on the open market after a minimum occupancy period, allowing owners to benefit from property appreciation while maintaining affordability through continued government oversight.

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Data-Driven Rent Controls

Rather than implementing blanket rent caps, cities like Berlin and Paris use sophisticated data analysis to set neighborhood-specific rent limits. This granular approach allows for market flexibility while preventing excessive increases, using tools like rent mirrors (Mietspiegel) to determine fair rates.

The systems typically include regular data updates and specific provisions for new construction and renovations. In Paris, the observatory of rents (Observatoire des Loyers) collects and analyzes data from thousands of properties to establish reference prices, while Berlin's system caps rent increases at specific percentages over defined periods.

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Empty Homes Tax

Vancouver pioneered this approach in North America, targeting not just revenue but behavior change. The program includes a robust audit system and escalating penalties, with revenues specifically earmarked for affordable housing initiatives.

Property owners must submit annual declarations of occupancy, with exemptions for properties undergoing major renovations, owners in care facilities, or those with legitimate reasons for vacancy. The program defines vacancy as more than six months of non-occupancy during the tax year, excluding primary residences.

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Flexible Zoning Reform

Tokyo's approach stands out because it sets land-use rules at the national level, preventing local blockages to development. This allows housing supply to respond more quickly to demand, with streamlined approval processes for residential construction.

The zoning system operates on twelve categories that allow for mixed-use development by default. Most zones permit some form of residential construction, and height limits are set based on road width and distance from other buildings rather than strict zoning categories.

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Investment Visa Restrictions

Portugal's reform of its Golden Visa program shows how countries can redirect investment toward needed areas. Rather than entirely eliminating investment visas, they're channeling that capital toward rural development and job creation.

The program now excludes residential property investments in high-pressure urban areas and coastal regions, while maintaining options for commercial real estate, investment funds, and business creation. This approach aims to balance international investment with local housing needs.

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Vacant Property Activation

Dublin's comprehensive approach combines carrots (renovation loans) and sticks (compulsory purchase powers). The program includes a detailed vacant property register and works with owners before moving to more forceful measures.

The system allows local authorities to acquire long-term vacant properties for social housing after a 12-month vacancy period. This is supported by interest-free loans for renovation work and technical assistance for owners willing to bring properties back into use voluntarily.

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Community Land Trusts

This model, growing in cities like Brussels and London, separates land ownership from building ownership to permanently preserve affordability. CLTs often include resident governance structures, giving communities direct control over their housing.

The trusts typically use 99-year ground leases and restrict resale prices to maintain permanent affordability. When residents sell, they receive a portion of the appreciated value, but price restrictions ensure units remain affordable for future buyers, creating a sustainable model for long-term affordable housing.

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Owner-Occupancy Requirements

Amsterdam's approach targets both short-term rentals and investor purchases. The requirements include strict monitoring systems and substantial penalties for violations, with specific focus on homes under €512,000.

The policy requires buyers to live in their properties for specified periods (ranging from six months to four years) after purchase. Exceptions exist for certain circumstances like job relocations, but the system is designed to prevent speculative buying and ensure housing serves local residents.

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Inclusive Development Mandates

Montreal's "20-20-20" policy requires three types of affordable units in new developments: social housing, affordable housing, and family-sized units. This comprehensive approach ensures new developments contribute to diverse, mixed-income communities.

The policy applies to developments over a certain size and includes specific requirements for unit sizes and affordability levels. Developers can meet these requirements through direct inclusion or through financial contributions to the city's housing fund.

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Price-Controlled Ownership

Helsinki's HITAS system links housing prices to actual construction costs rather than market speculation. The city maintains ownership of the land while residents purchase homes at regulated prices based on verified construction costs plus a controlled margin.

Owners pay annual land lease fees and must follow specific resale rules that maintain the connection to construction costs rather than market values. The system operates alongside the regular housing market, creating a parallel option for middle-income households.

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Vacation Rental Bans

Mallorca's complete ban on vacation rentals in apartment buildings represents one of the strictest approaches to protecting local housing stock. Similar measures have been adopted in parts of Amsterdam and New York City.

These bans typically distinguish between different types of properties, with stricter rules for apartment buildings than standalone homes. Enforcement includes substantial fines and cooperation with rental platforms to remove non-compliant listings.

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———————

These diverse approaches to housing policy demonstrate that there's no single solution to the housing crisis. Instead, cities are implementing multiple, complementary strategies tailored to their own challenges and contexts.

What's notable is the increasing willingness of governments to take bold, direct action in housing markets, from outright bans to direct development. As housing pressures continue to mount globally, these are solutions to watch for other cities seeking to ensure housing serves its fundamental purpose: providing homes for residents rather than assets for investors.

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Steve Duncan

Managing Director, C Studios
Questions? Contact me at steve.duncan@c-studios.com

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