High Housing Costs as a Burden for Salzburg as a Business Location

The aim of this study is to analyse the effects of the high housing cost burden in Salzburg on the business location. After a discussion of the rapidly growing international literature on the subject, small-scale listing data are used to show that housing affordability (housing costs relative to income) is under pressure across the province. For potential workers, income after housing costs is lower in many regions of Salzburg than in comparable regions in other federal states. The focus of the study is on the consequences of the unfavourable housing cost situation for Salzburg as a business location. Particularly clear effects can be seen in relation to the labour force, where a clearly negative internal migration balance has accumulated over the last 20 years. The strong outflow of labour from the core zone of Salzburg is unique among the federal provinces. The high housing costs in the job-rich urban areas also encourage households to reduce their housing costs by commuting. At the company level, the low labour mobility is in line with the below-average company dynamics, but also with the vacancies. Jobs in sectors with below-average wages are particularly difficult to fill in Salzburg. Enterprises in these sectors also appear to be more often forced to compensate for housing cost problems by providing company housing.