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'Apartment exchange': How could Switzerland curb rent prices?

Helena Bachmann
Helena Bachmann - [email protected]
'Apartment exchange': How could Switzerland curb rent prices?
Apartment exchanges could curb costs, tenants association says. Photo by Brina Blum on Unsplash

Depending on where in Switzerland you live, your rent may be exorbitantly high, but with the housing shortage in many parts of the country, simply moving into cheaper accommodations is not always an option. But a tenants group has proposed a solution.

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Tenant advocacy groups and politicians have been looking at various ways to make housing more affordable to low and middle-income tenants.

Among solutions being currently proposed is to step up the construction of 'public utility' housing — that is, affordable flats that are built on publicly-owned land.

READ MORE: How can Switzerland solve its housing shortage and curb rents?

Another proposal is to ban the construction of second homes (or transforming primary residences into holiday accommodations) in areas suffering from housing shortage.

READ MORE: How do second homes contribute to Switzerland’s housing crisis?

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These, by the way, are suggestions coming from left and center parties; right-wing groups, on the other hand, see limiting immigration as the best way to tackle the housing problem.

Another measure is now being put forth by the Swiss Tenants Association (ASLOCA).

In an interview he gave to Watson news platform on Tuesday, ASLOCA president Carlo Sommaruga said that exchanges of apartments among tenants would keep the rents down.

Sommaruga, who is also a socialist MP, has filed a motion to this effect in the parliament. Specifically, it allows tenants to exchange their dwellings among themselves — for instance, when moving from one region to another, or seeking a bigger (or smaller) apartments.

How exactly would this work?

Under the current system, when an old tenant leaves and a new one arrives, landlords have a right to increase rent if the reference rate — a benchmark used to set rents — has increased in the meantime.

For instance, if the old tenant’s contract is based on a 1.25 rate and it climbs (as it is expected to in June), then new tenants would have to pay a correspondingly higher rent.

Currently, 54 percent of rental contracts in Switzerland are based on that rate, but regionally the number is higher.

In the Zurich area, as well as in central Switzerland, for instance, more than 60 percent of rental contracts are based on a 1.25-percent reference rate, according to Moneyland consumer platform. 

If ASLOCA’s proposal goes through (it is not yet clear when it will be discussed), then the apartments could be swapped at the original rent, regardless of the rate.

Not surprisingly, “the landlords oppose" this measure, Sommaruga said. “They prefer classic terminations in order to be able to increase the rent for new leases, while the exchange results in maintaining rents at their original level."

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There would, however, be a downside to this arrangement.

Apartments would be swapped in ‘as is’ condition.

The landlord would not be responsible for making repairs or other works to the apartment that is being exchanged between tenants.

He or she would, however, approve the new tenants to make sure they are financially able to pay the rent.

Additionally, Sommaruga said that the new law, should it be enacted, would make each tenant in the swap responsible for the other paying their rent. “The tenants would mutually verify that the other is solvent, by communicating their income, lack of criminal record, etc."

"The purpose of the motion is to get the law changed,” he added. "Modalities would be defined later. There could be just cause for refusing the exchange, The measure could also specify that these exchanges are only possible when there is a housing shortage." 
 

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