How can Switzerland solve its housing shortage and curb rents?
Switzerland has been experiencing a crisis in its housing market: with fewer affordable homes available, rents are continuing to soar. Here's a look at the different proposed solutions to deal with the problem.
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Housing shortages have been a hot-button topic in Switzerland for months and, according to real estate experts and economists alike, this situation will get much worse during 2023.
For instance, a new Credit Suisse report found that the shortages in the housing market, especially in urban centres, will drive the rents upward before the end of the year.
Certain regions are already experiencing this problem — some more than others.
In fact, while typically affecting mostly the Geneva area, shortages have also been spreading to the German-speaking part of Switzerland, as The Local recently reported:
Why the housing shortage in German-speaking parts of Switzerland is getting worse
The problem is so acute, that some Zurich residents even took to the streets recently to express their outrage at the housing situation.
The reasons for the shortages — and consequently for high rents in low-vacancy areas — is that construction has slowed down across the country, while the demand for new housing is rising due to the unprecedented influx of foreigners in 2022.
READ MORE: EXPLAINED: How immigration is impacting Switzerland
Unfortunately, this situation is likely to worsen in the near future.
“Switzerland is heading towards a housing shortage of unprecedented proportions,” said Fredy Hasenmaile, Credit Suisse’s real estate expert. “In urban centres, housing is already very scarce. The problem has not yet reached the countryside, but it is only a matter of time.”
Will the Swiss countryside be affected by housing shortage as well? Image by Siggy Nowak from Pixabay
What is being done at the political level to counter this situation?
MPs have proposed different, and sometimes drastic, solutions to this problem:
Social Democrats (SP)
The Social Democrats are calling for a massive, country-wide construction of “public utility” housing — that is, affordable flats that are built on city-owned land for low-income tenants.
READ MORE: What are Swiss housing cooperatives and can you access them?
The party also wants to overhaul the ‘Lex Koller’ legislation — the federal law that protects Swiss land from being purchased by foreign investors — by making it more restrictive.
As a short-term measure, the SP is also calling on a ban on Airbnb short-term holiday accommodation, as well as on business apartments in residential areas.
The Greens
Like their Social Democratic counterparts, the Greens are also urging more construction of low-cost housing, which now represents only five percent of the Swiss real estate market, the party says.
The government must also cease to promote Switzerland as an appealing business destination, and attract expatriates to its shores, the party says. Green Deputy Bastien Girod said businesses are "good for Switzerland from a tax point of view, but not at all from a housing market perspective".
The Center (Die Mitte)
“The fundamental problem is that more housing needs to be built,” said Center’s MP Niccolò Paganini.
He pointed out, however, that in cities, the building authorisation process takes too long because there are oppositions and obstacles that need to be taken into account, “and too many people have a say.”
“The authorities responsible for issuing authorisations are too hesitant. This is one of the reasons for the housing shortage.”
This is also an approach favoured by Jürg Grossen, president of Green Liberal party.
He too believes that the best way to tackle the housing shortage is to simplify permit procedures.
But that’s not all: Grossen also said that old, small buildings should be demolished and be replaced with new ones that can accommodate more people.
Swiss People’s Party
True to its long-standing anti-foreigner stance, the right-wing SVP believes the way to tackle the housing crisis is to attack it at its roots: immigration.
According to SVP’s president Marco Chiesa, last year alone, 81,000 people came to live in Switzerland.
For him, the current immigration and asylum policy is “erroneous, to the detriment of the Swiss who can hardly find affordable housing".
Unlike for The Center MPs, however, building densely "is not the solution," because it would mean cramming as many people as possible into small spaces,” he said.
The Liberals
The Party has not proposed any solutions of its own, but has asked the Federal Council to analyse the housing situation and to present a plan of measures.
What happens next?
As all the above examples show, there is a political will to improve the current, unsustainable situation, and that is a good beginning.
At this point, however, nothing is happening in terms of concrete measures.
It is expected that the housing and rents topic will become the focus of some intense discussions in the parliament, possibly later this year.
In the meantime, the Swiss Tenants Association has been pushing elected officials to introduce rent control measures, so this issue is definitely on the political agenda.
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Housing shortages have been a hot-button topic in Switzerland for months and, according to real estate experts and economists alike, this situation will get much worse during 2023.
For instance, a new Credit Suisse report found that the shortages in the housing market, especially in urban centres, will drive the rents upward before the end of the year.
Certain regions are already experiencing this problem — some more than others.
In fact, while typically affecting mostly the Geneva area, shortages have also been spreading to the German-speaking part of Switzerland, as The Local recently reported:
Why the housing shortage in German-speaking parts of Switzerland is getting worse
The problem is so acute, that some Zurich residents even took to the streets recently to express their outrage at the housing situation.
The reasons for the shortages — and consequently for high rents in low-vacancy areas — is that construction has slowed down across the country, while the demand for new housing is rising due to the unprecedented influx of foreigners in 2022.
READ MORE: EXPLAINED: How immigration is impacting Switzerland
Unfortunately, this situation is likely to worsen in the near future.
“Switzerland is heading towards a housing shortage of unprecedented proportions,” said Fredy Hasenmaile, Credit Suisse’s real estate expert. “In urban centres, housing is already very scarce. The problem has not yet reached the countryside, but it is only a matter of time.”
Will the Swiss countryside be affected by housing shortage as well? Image by Siggy Nowak from Pixabay
What is being done at the political level to counter this situation?
MPs have proposed different, and sometimes drastic, solutions to this problem:
Social Democrats (SP)
The Social Democrats are calling for a massive, country-wide construction of “public utility” housing — that is, affordable flats that are built on city-owned land for low-income tenants.
READ MORE: What are Swiss housing cooperatives and can you access them?
The party also wants to overhaul the ‘Lex Koller’ legislation — the federal law that protects Swiss land from being purchased by foreign investors — by making it more restrictive.
As a short-term measure, the SP is also calling on a ban on Airbnb short-term holiday accommodation, as well as on business apartments in residential areas.
The Greens
Like their Social Democratic counterparts, the Greens are also urging more construction of low-cost housing, which now represents only five percent of the Swiss real estate market, the party says.
The government must also cease to promote Switzerland as an appealing business destination, and attract expatriates to its shores, the party says. Green Deputy Bastien Girod said businesses are "good for Switzerland from a tax point of view, but not at all from a housing market perspective".
The Center (Die Mitte)
“The fundamental problem is that more housing needs to be built,” said Center’s MP Niccolò Paganini.
He pointed out, however, that in cities, the building authorisation process takes too long because there are oppositions and obstacles that need to be taken into account, “and too many people have a say.”
“The authorities responsible for issuing authorisations are too hesitant. This is one of the reasons for the housing shortage.”
This is also an approach favoured by Jürg Grossen, president of Green Liberal party.
He too believes that the best way to tackle the housing shortage is to simplify permit procedures.
But that’s not all: Grossen also said that old, small buildings should be demolished and be replaced with new ones that can accommodate more people.
Swiss People’s Party
True to its long-standing anti-foreigner stance, the right-wing SVP believes the way to tackle the housing crisis is to attack it at its roots: immigration.
According to SVP’s president Marco Chiesa, last year alone, 81,000 people came to live in Switzerland.
For him, the current immigration and asylum policy is “erroneous, to the detriment of the Swiss who can hardly find affordable housing".
Unlike for The Center MPs, however, building densely "is not the solution," because it would mean cramming as many people as possible into small spaces,” he said.
The Liberals
The Party has not proposed any solutions of its own, but has asked the Federal Council to analyse the housing situation and to present a plan of measures.
What happens next?
As all the above examples show, there is a political will to improve the current, unsustainable situation, and that is a good beginning.
At this point, however, nothing is happening in terms of concrete measures.
It is expected that the housing and rents topic will become the focus of some intense discussions in the parliament, possibly later this year.
In the meantime, the Swiss Tenants Association has been pushing elected officials to introduce rent control measures, so this issue is definitely on the political agenda.
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