The government has rejected proposals to limit higher rents on the housing market despite calls for affordable accommodation and complaints about a shortage of apartments as a result of increased immigration.
Economics Minister Johann Schneider-Ammann said no major state intervention was necessary to regulate market forces.
He said the vast majority of the population lived in good and affordable accommodation and spent about 20 per cent of their gross income on housing. He said the growing demand for more spacious apartments and houses was a result of Switzerland’s prosperity.
“Only certain parts of the country suffer from a shortage of accommodation, including regions around Zurich, Lake Geneva, Basel and in central Switzerland,” he told a news conference on Wednesday.
He dismissed allegations that the growing number of immigrants from European Union member countries was the main factor for the great demand for housing.
“It is wrong to change our policy on housing because of pressure ahead of nationwide votes,” he said.
Notably rightwing political parties have blamed the increased number of immigrants for the shortage of affordable housing.
Over the next few years Swiss voters have the final say on two separate proposals to cap the number of immigrants.
However, the cabinet decided to boost a programme for property and building corporations to acquire land and promised to examine ways to help promote the renovation of old housing.
Schneider-Ammann called on the cantons and local authorities to take appropriate measures to alleviate a housing shortage.
Three weeks ago, Justice Minister Simonetta Sommaruga announced the government was limiting temporarily immigration for EU citizens with a five-year residence permit. But the cabinet stopped short of capping short-term permits.
She added the cabinet would take measures to address housing problems.
The latest decision has prompted outrage among the political left and the right.
The Social Democrats accused the government of ignoring the needs of the population, while the Greens said they were considering the launch of an initiative to protect tenants’ rights and combat property speculation.
About two thirds of the population in Switzerland live in rented accommodation.
The rightwing Swiss People’s Party for its part said Wednesday’s cabinet decision would help attract “even more foreigners”.
The centre-right Radical Party, considered close to the business community, as well as the Association of Swiss Cities, welcomed the cabinet decision.