Natalie Imboden.

An Interview.
By Karin Zauner. 
Co-Founder of Housing4Europe.Org

Q: Natalie, you are the Secretary-General of the Swiss Association of Tenants. Please elaborate on the specifics of the housing markets in the large cities in Switzerland, like Zurich, Basel, Geneva etc.? Is housing still affordable for lower – and middle-class people?

Natalie Imboden
In the major Swiss cities, the rental housing market has dried up very much. While the vacancy rate for the whole of Switzerland is 1.72% (figures from 2020), it is 0.15% in the city of Zurich, for example. In large cities in particular, it is extremely difficult for tenants to find an affordable apartment.

Overall, rental prices in Switzerland have risen by almost 20 percent since 2005, while general inflation has remained below 5 percent over the same period. The household incomes of tenants in Switzerland are heavily burdened by the rents. People with a low income (less than CHF 4,000 gross) spend more than a third of their income only on rent. With a middle income (between 4001 and 6000 francs gross) it is more than a quarter and with a higher income (between 6001 and 8000 francs gross) it is around 20%. The Swiss Federal Housing Office (BWO) recommends that the proportion of income that a household spends on rent should not exceed 25%. According to this standard, every fourth household in Switzerland currently spends too much on rent or is at the upper limit of the budget. (Note: Housing expenses are usually the largest cost item in the household budget, followed by taxes and health insurance costs.)

There is also a kind of two-tier society among tenants. For tenants who have been living in an apartment for a long time, the so-called existing rent, which is significantly lower on average, applies. However, those looking for accommodation are confronted with the most significantly higher asking rents on the housing market. In the city of Geneva, for example, these are 70% higher than the existing rents, in the federal capital Bern they are at least 20% higher. Anyone looking for an apartment in a larger Swiss city is confronted with sometimes exorbitant rental prices.

Q: What would it take to make the housing market in Switzerland more affordable and socially inclusive?

Natalie Imboden
Today, landlords’ returns are capped by law in Switzerland. In practice, however, this return restriction is not controlled and in many cases is significantly higher than permitted. Affected tenants must individually defend themselves against improper rents. For the large real estate companies in particular, which own hundreds or thousands of apartments in Switzerland, the focus is usually on the return. From the point of view of the Swiss tenants’ association, government rent control is therefore urgently needed in order to stop the rising rental prices.

In Switzerland, the rental price is linked to the reference interest rate, the average interest rate for all mortgages in Switzerland. If the reference interest rate falls by 0.25%, the tenants are generally entitled to a rent reduction. However, most landlords do not automatically pass these reductions on. Calculations show that due to this fact rents in Switzerland are around 40% too high today. So that the rental prices do not rise any further, the rental price reductions must therefore be passed on to the tenants when the reference interest rate is lowered.

In order to weaken the return orientation in the housing market, non-profit housing construction would have to be strongly promoted everywhere in Switzerland. Non-profit housing developers such as housing cooperatives, which function after the cost of rent (i.e. generate no return), are the best means of creating affordable housing. At the moment, however, only about 5% of all apartments in Switzerland are charitable. So there is still a lot of development work to be done here.

Q: The Swiss Association of Tenants has initiated with the support of the Greens, the Social democrats, Trade Unions and NGOs the referendum “More affordable flats”, which was rejected in 2020 by 57,1%. What were the main reasons for the defeat?

Natalie Imboden
There were major regional differences in the vote on our popular initiative “More affordable housing”. The initiative was accepted in all major cities and in French-speaking western Switzerland. In the capital of Bern and Zurich, for example, 62% were in favour of the initiative. Overall, approval was 55% in cities, 43% in the agglomeration and 35% in rural areas. Tenants, who make up almost 60% of the population in Switzerland, supported the initiative with 58%, while homeowners only supported the initiative with 30%. Frequent arguments against the initiative were that the state should not intervene in the market economy and that it would benefit the wrong people.

Q: What are the next steps in your fight for more affordable housing in Switzerland?

Natalie Imboden
A revision of the Swiss tenancy law is currently being prepared in parliament. This project was initiated by representatives of the real estate lobby in Parliament, who want to further undermine tenancy law in various areas and achieve even more market rent. The tenants’ association is fighting to ensure that this deterioration can be averted and has already announced that it will use the political means of a referendum against undermining tenancy law. Such a referendum would have a good chance of being successful in Switzerland. At the same time, the tenants’ association is also preparing various projects that would improve tenant protection in Switzerland.