Introduced into the Vienna Building Code by its 2014 Amendment (Bauordnungsnovelle 2014), the instrument referred to as urban development contract (städtebaulicher Vertrag) provides for the right of the municipality to enter into private-law agreements with landowners. The aim of such urban development contracts is to support the realization of planning objectives and, especially, to ensure that the landowners contribute to the infrastructure costs arising on account of the rezoning of their property.

To date, only a few major projects involved the prior conclusion of urban development contracts. But both the City of Vienna and investors have become aware of the potential of such urban development contracts and therefore the interest in this instrument has grown markedly.

Nevertheless, the conclusion of an urban development contract entails not only clear advantages but also potential drawbacks for either side. Investors face a certain risk as very vague legal terms give the public authorities a relative wide scope in drafting urban development contracts whereas only limited safeguards are possible for reasons of constitutional law.

But in principle such risks can be counteracted by designing the contract wording accordingly.