Housing Market Segmentation as a Driver of Urban Micro-Segregation? An In-Depth Analysis of Two Viennese Districts

The concept of segregation analyses the unequal distribution of social groups between neighbourhoods. It rests on two assumptions: that of homogeneous neighbourhoods and of a market liberal housing system. Both assumptions are applicable the context of American cities, but they display severe limitations when applied to the European context. Vienna’s housing market is particularly highly segmented, not only throughout the city as a whole but also within neighbourhoods. In the densely built-up area, residential buildings of different segments with different underlying rent regulations and entry barriers can be found side by side. Therefore, buildings are expected to show varying tenant and owner structures, which undermines the idea of a homogeneous neighbourhood. Against this background, we analyse at the micro scale small neighbourhoods defined by 100 m grid cells in a case study of two inner-city Viennese districts (districts 6 and 7) characterised by a particularly vivid housing-transformation and commodification dynamic. Using a novel and fine-grained dataset combining building information with the socio-economic data of households, we investigate the patterns and dynamics of income inequality and income segregation, as well as the relationship between housing market segments and socio-economic patterns. As data comprise two cross-sections for the years 2011 and 2020/21, changes in the neighbourhoods during the house-price boom period are also considered. This leads us to ask the question: How do housing market segmentation and its related changes affect income inequality and segregation at the micro scale? Our analysis delivers two main results: Firstly, we show the existence of marked social variation and related dynamics at the micro scale, even within a small urban area. Secondly, we show that the spatial distribution of housing market segments has a strong impact on income inequality in the neighbourhood.