They use nationalism to catch votes. Many people are deceived by Haider, but, basically, the vote for him was an act of stubbornness. It now takes ten years for a foreigner to become an Austrian citizen. Before, it only took five years. As for housing, foreigners do not get the much cheaper and cleaner council apartments.
Foreigners have to move into expensive privately owned houses.
I think the European Union's reaction to Haider is exaggerated, although it is good that people aren't just keeping quiet. However, thinking back to my stay in Germany, I must say it was even worse there than it is here now. People coming from a country destroyed by war were treated like dirt. The policy towards foreigners was terrible for refugees, and now it is being continued. They want to deport people to an occupied and destroyed country without any hope.