Addressing the Skills Shortage: A Resurgence of Employee Housing

In an effort to combat the ongoing skills shortage in Austria, various companies are reviving the concept of employee housing, providing essential living accommodations for their staff. A prime example is the Landeskliniken Salzburg, where 184 employees are set to move into newly constructed apartments within the Lanserhofsiedlung. The development will expand significantly by 2029, ultimately offering a total of 568 residences for employees.

Meanwhile, the ÖBB (Austrian Federal Railways) is also making strides in employee housing with its Illrainhof project in Bludenz, which combines the renovation of existing structures with new construction. ÖBB spokesperson Daniel Pinka emphasizes the importance of this initiative, stating that the primary goal is to provide modern and affordable housing for their employees in Bludenz.

Across Austria, the ÖBB currently manages a portfolio of around 4,000 employee residences. In addition to these, the company retains the right to designate tenants for several thousand more apartments that may be developed on their lands through partnerships with housing associations. The trend of offering housing as part of employment is not limited to these organizations. Companies like Stiegl Brewery, Pankl Racing, and the Vorarlberg Hospital Operating Company are also adopting this model.

Providing affordable housing for seasonal workers in the tourism sector has become increasingly critical. New employee housing projects, such as a 57-apartment complex for workers at the Krallerhof in Leogang and accommodations for staff at the Grand Tirolia in Kitzbühel, exemplify this trend.

Thomas Reisenzahn, Managing Director of Prodinger Tourism Consulting, notes that quality employee accommodations are vital for the success of tourism and other businesses, especially in regions where housing is scarce and expensive. The cost of these accommodations is often significantly lower than that of comparable units on the open market, with discounts reaching up to 50 percent. In many cases, employees may only be required to pay a nominal fee instead of standard rent.

For ÖBB employees, the rental prices are calculated based on the market rates specified by the Austrian Real Estate Agents Association, with potential discounts based on income levels. For example, employees earning up to EUR3,200 per month may receive reductions of up to 40 percent on their rent.

While the benefits of employee housing are clear, there are some stipulations to consider. The availability of these residences is tied to employment, meaning that if an employee changes jobs, they must vacate the premises. Typically, a six-month notice period is standard, although flexible arrangements can often be made to accommodate personal circumstances, such as allowing children to finish the school year. In cases of a tenant's death, the surviving spouse may retain the right to live in the apartment for the remainder of their life.

Another consideration is the potential tax implications associated with subsidized housing. If the apartments are located near the workplace and do not serve as the primary residence for the tenant, a benefit-in-kind tax may apply. However, units smaller than 35 square meters are exempt from this tax. For larger units, a reduction of 35 percent on the taxable value is applicable if the housing is provided for no longer than 12 months.

The revival of employee housing initiatives demonstrates a proactive approach by companies to attract and retain talent in a competitive job market. As the need for skilled workers continues to grow, providing affordable and quality living options is becoming an essential part of the employment package, particularly in regions where housing is increasingly unaffordable.