The far-right party is one of a small minority of parties opposed to the construction of ten garage-like booths on derelict land in an industrial area in Alstetten to the west of the city.
Last week, the city parliament voted 74 to 30 in favour of seeking a 2.4 million franc ($2.8m) loan to finance the scheme, which proponents argue will expedite the closure of the unpopular Sihlquai red light district in the city centre.
The so-called “performance stalls”, set to be kitted out with parking spaces and alarm buttons, will be the first of their kind in Switzerland if the project goes ahead.
But the SVP believes the plan is too expensive and has expressed doubts that the sex stalls would be accepted by punters or pimps, local party leader Mauro Tuenu told the Tages-Anzeiger newspaper.
If the SVP collects the 2,000 signatures needed to call a cantonal referendum, which it is confident of doing, then Zurich voters will be called on to decide whether or not the new red light district can go ahead.
The party has calculated that the sex stalls could devour 7 million francs ($7.8m) of taxpayers' money during the development's expected ten-year operational lifetime.
Arguing against the project, SVP Alstetten councillor Ruth Anhorn said prostitution is a private business that should not be supported with taxes.
“It is about the oldest profession in society. The taxpayer should not co-finance a bordello,” she told the newspaper.
Police and social services have opposed the idea of a referendum, arguing that a popular vote would likely prolong the lifespan of the seedy Sihlquai kerb-crawling district by at least three more months.
“Zurich residents will only be called to vote in early 2012,” said Reto Casanova from the city police department.
Zurich city council plans to open the new district in Spring 2012, while at the same time ending prostitution on the banks of the Sihl river in the city centre.
Politicians, police, social workers and members of the public have all raised concerns about unregulated prostitution in the city centre, which they say has led to sex trafficking, safety issues, and the spread of sexually transmitted diseases.