Kongress on demand: Christoph M. Achammer "Manifest gegen die Verknappung von Raum"

Ladies and gentlemen, after Werner Sobek asked about utopias, I'd like to share a small utopia with you — the result of two years of grappling with the topic of scarcity.

We quickly realized that in our business of innovation, almost all the resources we need for building are substitutable — within limited possibilities, even if we used all the forests in the world. But one resource is certainly not substitutable if we want to build: land. And I don't need to tell you anything sensational, but at the end of this discussion — this is the result of this manifesto — we need a new land order in Austria. Not eventually, but starting tomorrow, immediately.

Why is that so? It's relatively simple. We are not a very large country. Only 37 percent of our national surface is settlement space — areas suitable for humans, below 2,000 meters, where agriculture can be practiced, where people can live, and so on. And we've already consumed almost 40 percent of that — 18 percent — for buildings and infrastructure.

The more innovative the spatial planning, the more infrastructure is needed. My homeland, a compact homeland, is particularly innovative in this regard. We need about three times as much infrastructure as building land. I once said in this committee where this comes from: every Tyrolean wants their single-family home with three meters of clearance all around and a corner to go around the whole thing. My interpretation of why this political will exists is that in a conservative country, people realized that those who trim hedges don't make revolutions. So I must create spatial planning measures that create long hedges — that succeeds with plots of 400 square meters. That's why we have three times as much development area as building land.

Of this building land, about 42 percent is sealed. To give you a sense of scale: our small 'equator wall' — from 2009 to 2019, we consumed about 190,000 square meters per day. That's roughly the size of Vienna's second district. In the meantime things have improved slightly — we're now just over 100,000 square meters per day, 365 days a year. For the Tyroleans among you: that's the development of the entire Hofgarten. For the Viennese: that's the consumption of the baroque part of the Wienerwald — or the entire Stadtpark — every single day, 365 days a year.

We have the highest urgency and can react in two dimensions. First, within the current legal possibilities, which are all not being utilized — spatial planning, building codes, parking regulations. Two or three examples: spatial planning prefers open construction with densities between 0.6 and 0.9. Colleague Eberle has demonstrated in an extensive study book with his students at ETH Zürich that privacy begins at densities below 0.3 and vitality begins above 1.2. Our spatial planning managed to position itself exactly in the middle — averaging between 0.6 and 0.9 across all of Austria — which naturally leads to maximum wastefulness of land and maximum provocation of unnecessary infrastructure.

And when I think about the various parking regulations — that for every apartment one-and-a-half or two parking spaces must be provided — then you simply have to tell people: if any representative of the people, who isn't currently in pre-trial detention, talks about affordable housing and then says, well, if you live in over 60 square meters of living space, immediately add 30 square meters of parking space, that's 50 percent of the gross floor area you must have as an additional burden, plus perhaps 35 percent of the economic framework conditions that come with it.

And speaking of economic framework conditions — ladies and gentlemen, 75 percent of all zoning changes are project-driven. That means one of you, myself included, has a good idea for a piece of fallow land, then goes to the respective autonomous political body, the municipal council, and says I'd like a zoning change. And then with more or less legal means, the ladies and gentlemen are convinced to grant this zoning change — and naturally, with the exception of urban development agreements, all the value increases that come from these zoning changes belong to us. If we bought the land as a building plot, most people here don't have that privilege — they had to pay a lot for maintenance plots. So the speculative gain is usually already gone, but that's just a side effect.

The economic framework conditions are what truly matter — that's the lever you have to pull. And that is the small utopia you can see back there — what economics means over the last 20 years. On one side is normal inflation, hovering around two percent despite all efforts. And you can see what happened in the real estate sector: in the last four years, a four-and-a-half-fold increase. Averaged over the last ten years, still seven percent — two-and-a-half-fold. Over the last 20 years, one-and-a-half times more than inflation every year.

And nobody can be blamed if, when they have a million euros today, they can either speculate on stocks that are rising too much or too little, or invest in Austria at 0.50 basis points negative interest, or put it in a plastic bag and move it to Switzerland at 70 basis points negative interest — or they buy a piece of land, which historically has yields that everyone else can only dream of: 11 percent appreciation, which even stocks don't deliver. Continuous 11 percent value increase — nobody can be blamed for doing that.

On top of that, we have a relatively beautiful country. We face 500 million rational investors in Europe, and all the farmer-oriented land transaction laws and whatever other protective measures exist don't help — they lead to land becoming a currently fantastic speculative commodity. And we must end that. We must immediately remove land as a speculative commodity from the market. Land is not a good that can be left to the market. Oil, wheat, rice — you can debate those. But land, definitely not.

And this doesn't harm us, because all of us sitting here who deal with building and investing — we have a large share of innovation, creativity, entrepreneurial spirit. We just saw a great project earlier. With this entrepreneurial spirit, with these things we create value. We don't need ownership of land at all for that. We can be interested in the use — we're not interested in ownership. And when we're clear about that, then we must ultimately demand the manifesto — five minutes remaining — we must ultimately demand that society intervenes. In our country, somewhere we have to begin removing this non-substitutable resource from the market.

How do we go from this thinking of ownership to usage? I don't have to change the constitution for that. A first example we discussed: from January 1st, everyone can sell their land without any interference with property rights. Everyone knows how much was paid, and it's inflation-secured. This inflation-secured purchase price is the sale price, and everything above that is taxed away. Without a constitutional amendment — my colleague almost had a constitutional amendment — this ends speculation on land the next day.

Incidentally, the transfer of land value through political zoning processes is an independent process. Privatize the gains and socialize the reversals — the landowner has a right to compensation, which is also resolved this way.

Parallel to this step, a further proposal: in every transaction, regardless of the price, the municipality gets a right of first refusal. And perhaps a third step — and this is a bit utopian — and it has been in discussion for 30 years. In my engagement with this topic, I read the proposal of former mayor Vogel in Munich from the 1970s, before the introduction of the so-called social land value tax. Munich was among the first in Germany to implement it. He argued indignantly that in the 1960s, the share of land cost per square meter of living space in Munich was 6 to 8 percent, and by the end of the 1970s it was 16 percent — that's no longer sustainable.

Do you know what the land cost share per square meter of living space in Munich is today? 80 percent. And in parts of my own homeland — you don't even have to go to Kitzbühel, though it's especially extreme there — 90 percent. And if someone now says we're trying to reduce construction costs technologically and share planning to make housing affordable, and we reduce the total cost from 3,000 to 2,500 or 2,200 euros — what's the point if 600,000 to 700,000 euros of the land share isn't addressed?

The final part of this utopia: I believe the first two parts can be implemented tomorrow. When I see the meager discussions in the current tax debate or this land meeting, nobody is harmed. I'm expropriating nothing except speculative gains, and that's an enormous step into the future with all the consequences that entails.

The more far-reaching utopia — returning to Jochen Vogel — a new land order. Think about it: if we immediately halve income tax, wage tax, and corporate tax, the state loses a lot of money. But this loss is compensated by a nationwide usage fee. The compensation benefits the younger generation — a 20-year-old suddenly pays only half the income tax and can build their future. Those who currently own land are exempt from the usage fee until the current value is recouped — perhaps in 30 or 35 years, it's a calculation — after which they also pay. The state must bridge this financially.

And from then on, land is back where it belongs — in my eyes, in my small utopia — in the hands of the general public. And on this basis, we are all challenged as entrepreneurs, as architects, as engineers, as real estate developers to create value, and in this entire value chain, those are excluded who merely wait based on their ownership and create more value without doing anything. Thank you very much.