The free market in Switzerland has built housing units that remain empty because they are too expensive, or in out-of-the-way places, says Marina Carobbio Guscetti. The Social Democrat senator believes that the initiative "More affordable housing" will fix these problems. It will help the middle class and the less well-off.This content was published on January 16, 2020 - 11:00
Apart from health insurance premiums, rent is the biggest item in many family budgets. Since 2005, in spite of lower interest rates and a high vacancy rate, rents have gone up 18.8% according to the available statistics.
On February 9, Swiss voters will have an opportunity to change this situation. Following parliament’s rejection of the people’s initiative from the Swiss Tenants’ AssociationExternal link for "More affordable housing" without any counter-proposal, there will now be a nationwide ballot on the need to promote the building of social housing and free the rental market from the grip of speculation.
In the wrong place, or too highly priced
There is more and more building going on all the time in Switzerland. Land and green spaces are disappearing to provide new housing developments, and this growth is encouraged by low interest rates.
In many urban regions you can see new housing stock coming on the market, but it is mostly on the outskirts of town, far from the downtown areas and not where housing is really needed.
In many cases these are high-end or luxury apartments, not what ordinary people need, and furthermore, out of their price-range. Rents remain high, especially in the downtown areas, out of reach for families – or for older people, or young people for that matter, who want to live independently. The growth of the housing market has not resulted in lower rents.
The trouble middle-class families and those with limited budgets have finding moderately-priced rental accommodation is a problem recognised by the Swiss government itself in its statement on the people’s initiative "More affordable housing". However, the government is just recommending that the initiative be turned down because it would cost money and go against the laws of the marketplace.
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Yet it is precisely when the market fails to keep rents in check that the authorities should start playing an active role. As regards costing money, we need to remember that loans for social housing construction have always had to be repaid, and the government actually benefits by the interest payments.
More social and environmentally-friendly
The initiative aims to encourage building of housing with affordable rents for low-income families and the middle class: at least 10% of new housing starts are to be for social housing. Currently, this type of housing makes up only 5% of Swiss housing stock.
According to a 2017 study by the Federal Housing Office, rents for three-bedroom apartments on the open market are on average 16.5% more expensive than non-profit housing; this figure jumps to 26% if we consider only the major urban centres. So an average tenants pay the equivalent of two extra month’s rent, or three months’ rent in the major urban centres.
Rents for housing maintained by cooperatives, local governments and non-profit foundations are lower than all others on the market, and have the effect of keeping down the rents of those other kinds of housing.
These housing units require on average less living space per occupant, and are thus better for land use and the environment, and encourage social diversity in the population that lives there.
This is the kind of housing model the initiative wants to encourage by giving cantons and municipalities the right to act in favour of social housing starts, also the Swiss government or semi-state bodies when they have land to sell.
This is a crucial aspect, when you think that these properties are often prime pieces of land found in the middle of cities or other population centres, precisely where there is a lack of moderately-priced housing. Finally, the initiative demands that conversion to new energy sources should not drive up rents.
2020 is going to be an important year for tenants due to this people’s initiative for "More affordable housing", because it encourages moderately-riced rental housing and gives a chance to low- and moderate-income households.
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