Building instead of blocking
Today, fewer apartments are being built per capita than at any time since the 1950s.this historically low level of construction activity is having an impact on housing prices and rents.in addition, tight regulations make it difficult to create sufficient living space.
Against this backdrop, two housing initiatives will be put to the vote on June 14. The housing protection initiative wants to give municipalities the right to make demolitions, conversions and renovations subject to a permit requirement and to introduce a rent cap. For its part, the housing initiative calls for a cantonal housing association to intervene in the housing market with start-up capital of CHF 500 million.
Both proposals therefore rely on more state intervention and new requirements.to see the effects of a strictly regulated housing market, just take a look at Basel and Geneva.
In Basel-Stadt, building applications for apartments have plummeted by 80 percent since the introduction of the Housing Protection Ordinance in 2022. In the canton of Zurich, they have increased by 33 percent in the same period. The consequences in Basel-Stadt: renovations are being put on hold, tradespeople are complaining about a lack of orders and commercial enterprises are being forced to look for work in other cantons.
The picture is similar in Geneva. The western Swiss canton has had one of the strictest housing regulations in Switzerland since the 1980s. Anyone who thinks that the housing market works better there than in regions with fewer regulations is mistaken.
The new Sotomo study “Housing dynamics in Zurich and Switzerland” shows that Geneva’s comprehensive housing protection accentuates the lock-in effect. Many households remain in unsuitable housing due to a lack of alternatives. Almost half of families with young children and over a fifth of 40-64 year olds live in overcrowded apartments. This leads to a structural maldistribution and blocks the housing market.
A recent study by Swiss Economics calculated what a housing protection regime would mean for Zurich: Up to half a billion less investment per year. If less is invested, less will be built. Instead of relieving the situation on the housing market, housing protection regulations exacerbate it.
The solution lies elsewhere.better framework conditions are needed for housing construction.faster procedures, less bureaucracy and targeted densification where it makes sense. This will create additional living space and relieve pressure on the housing market.
This is where the counter-proposal to the housing initiative comes in. It deliberately focuses on better framework conditions and incentives to enable more living space – with less regulation, accelerated procedures and denser construction where it makes sense. This is the right approach. Because if you want to do something about the housing shortage, you have to promote construction – not block it.