Prices on the housing market are rising and the law of supply and demand is out of kilter. There are many reasons for this. We shed light on the background to this perfect storm – which, if we do not remain vigilant and take responsibility, will gain considerable momentum.

Storm warning 1: no lessons from the past

In recent years, the second-home initiative has shown us how real estate prices react when supply is artificially reduced in the face of strong demand: They literally exploded, especially in the years 2017 to 2019, when nothing new was built at all. Have lessons been learned from this and have the conditions been created in urban areas with high demand so that supply can grow in line with the population? Obviously not. 

Storm warning 2: This is not the time to clear building land 

With the help of the SP, the Greens have launched various cultural and agricultural land initiatives at federal and cantonal level in the past. The unsuspecting electorate approved some of these toxic initiatives without knowing the consequences for their own housing situation. As a result, cantons with low population growth are now instructed by the Confederation to carry out zoning out for building land that is not required within ten to fifteen years. This affects cantons such as Graubünden and Valais, both of which have seen enormous price increases as a result of the Second Homes Act, much to the chagrin of the local population. But rural cantons such as Thurgau also have to zone out building land in order to reduce supply. The idea behind the proposal was to make more economical use of existing building land and use it more intensively. This sounds good in theory and on voting posters, but neither corresponds to reality nor to the needs of a constantly growing population. 

A few years ago, ISOS, the Federal Inventory of Swiss Sites of National Importance, came onto the scene. ISOS was originally only intended for federal buildings. A steep pass to the “Verballenbergization” of Switzerland, which has come in through the back door without the electorate in order to remain clandestine. And above all, a steep pass that talented conservationists have used to inventory most towns and municipalities and classify them into protection categories. Some shady judges have extended ISOS to private buildings with questionable decisions. And all this without the owners having any opportunity to challenge this suddenly imposed protected status. Suddenly, private buildings are also affected by the protection of the townscape – and small houses in four-storey residential zones cannot be demolished to make way for new living space, as the historical significance of “front gardens where fruit was planted for self-sufficiency during the war”, for example, is more important than densification. The protection of a townscape suddenly takes precedence over upzoning and densification, i.e. the better use of existing building zones. 

The extent to which the back door for ISOS has been opened without the knowledge of the population is shown by the City of Zurich’s approach in 2018, when it promised the Heritage Society that it would take ISOS into account in the next overall revision of the building zone regulations if it dropped a major blockade to the introduction of the current building zone regulations. Blackmail, cronyism or left-wing green mongering: no matter what you want to call it, new housing is being prevented in any case – without a referendum, without sufficient headwind, without the media drawing the population’s attention to it.

Furthermore, the Spatial Planning Act has been amended at federal level and cantons must demand added value for zoning . Depending on the region, 20 to 40 percent value-added tax is due. A measure that makes building land even more expensive. As this regulation was not implemented quickly enough by all cantons, the federal government imposed a freeze on zoning in the cantons of Zurich, Zug, Schwyz, Lucerne and Geneva in 2019 due to the lack of value added absorption. A further eight cantons were warned of a ban because they had not adapted their structure plans in time, and other cantons were given strict conditions. The Jura, Valais and Baselland had to make major adjustments to their structure plans and show the federal government how they could be achieved with a radical rezoning programto achieve a higher utilization of building zones. 

You read correctly: in recent years, cantons with high population growth have been prevented from creating new building zones. Cantons with low population growth have been encouraged to eliminate existing building land. 

Storm warning 3: Left and right put vote-catching above problem-solving

The Left and the Greens want to protect the landscape as well as the townscape. They want to allow as little building land as possible and still create affordable and subsidized living space. The bourgeois politicians do not put spatial planning at the top of their agenda and do not point enough to the abuses of associations such as Heimatschutz and VCS, which often make building impossible with their complaints. Furthermore, they do not warn the population enough about the consequences of left-wing initiatives and do not launch any civic initiatives themselves to steer spatial planning in a different direction. 
Here are a few such examples in which one part of politics is not acting with much foresight and the other part is standing indifferently on the sidelines. But nobody really notices, because the media have taken a break from the topics. 

Example 1: The Alternative List recently played a nasty trick on the left-wing city government in Zurich: The SBB wanted to build 375 apartments in the city center together with the city of Zurich. The Neugasse project even envisaged a large proportion of non-profit and subsidized apartments. However, the Alternative List scuppered the project with an initiative calling for the property to be bought from SBB and turned into exclusively non-profit apartments. The Alternative List’s initiative was somewhat naïve, as the sale of the land was not even being discussed by SBB. As a result, the investor SBB withdrew. The result: there is now a shortage of 375 apartments in the city center. This is also done without any outcry from the population, who behave as if it does not affect them personally when the supply-demand structure is increasingly shaken by such obstacles to construction.  

Example 2: The city of Zurich is currently buying up completely overpriced apartment buildings in the city for over 400 million francs in order to turn them into social housing. And this in the current interest rate environment, where a downward trend in value is expected. The victims are investors and private individuals who are unable to pay these inflated house prices. Around 30 percent of apartments in the city are already subsidized by the state or owned by cooperatives. Unfortunately, SMEs are not benefiting from this development and are increasingly being pushed out of the city(see also the article of the same name). The rich leave the city voluntarily, because all this also has an effect on the already high tax burden with which one is penalized for living in the city. In this way, the many voters of choice of the left-green city government will remain in the city, ensuring a solid voter base with majority support in Zurich for decades to come. Here too: There is no audible grumbling from the middle classes, who have already had to extend their radius of residence by many kilometers in all directions.
   
Example 3: In a Zurich agglomeration municipality, an investor has planned a residential development near an open space and agricultural zone and has not explained that no microorganisms are threatened by the construction on the green building land meadow. Green neighbors successfully fought the planning application because species protection was not sufficiently proven. 

This sour soup is often fueled by questionable decisions and conditions imposed by judges and building authorities. For example, noise protection, which is not just a challenge for architects. Namely when balconies can suddenly no longer be planned in the city center. Large construction projects are made impossible because the noise protection values are too low. For major cities from Rio de Janeiro to London, from Istanbul to New York and from Paris to Tokyo, densification and noise are the price of population growth, of living in a metropolis and simply the unavoidable reality. Just not in “Ballenberg Switzerland”, which stretches from Geneva to Kreuzlingen. 

As a result, the number of building permits and thus also the number of completed apartments has fallen significantly in recent years. On closer inspection, no one is surprised, because there is a lack of building land, building permits and motivated investors who want to fight the windmills of laws, associations, neighbors and courts. So the Swiss population is paying a very high real estate price for the total failure of politics, questionable popular decisions and the whimsical reinterpretations of existing laws by judges acting a little too autonomously. 

Storm warning 4: Buzzwords are becoming stronger than facts

The high level of immigration is seen as a threat that needs to be averted, especially in SVP circles. The fact that this is a consequence of the good economic situation is often hushed up by the party. Full employment, economic growth without recessionary tendencies as in neighboring countries and the associated prosperity are directly linked to immigration, which we are fortunate to have. Immigration creates a need for new living space, which is required to keep Switzerland running as well as it does. 

Further demand has arisen due to the increased space requirements per inhabitant: Corona and the home office, as well as higher incomes and wealth, have driven up demand. 

To summarize: There are more and more of us. And each individual always wants more. This combination of rising population and increased space requirements will lead to almost exponential, certainly toxic growth. This is nobody’s fault, any xenophobia is misguided and this development should also simply be accepted as reality. Moreover, none of this is a problem at all, because Switzerland would have enough residential building land if it were not unnecessarily and artificially scarce, as is the case today.

The life jacket for this real estate storm: the rapid zoning of building land

The logical consequence of too little supply and high demand, even with increasing tendencies, are sharply rising real estate prices and rents. The solution is obvious: significantly more building land needs to be zoned – and quickly. 

To achieve this, laws must be changed promptly and politicians on the left and right must work together to present the people with new initiatives that will lead to affordable housing, especially in urban areas. Because Switzerland has enough regions and areas where the townscape can be protected, where you can hear the birds chirping and where foxes and hares say goodnight to each other. 

Furthermore, the right of appeal of associations must be sensibly limited and the ISOS site conservationists should no longer be allowed to be active in densely populated areas. The people should also finally be able to vote on whether ISOS is legitimate and desirable at all. 

Sailing on without a lifejacket? Not a good idea

If party political battles continue instead of joint solutions and another five years of political and spatial planning failures follow, the distortions in the socio-demographic structure that are becoming apparent today will become visible. Social unrest, especially in a city like Zurich where it is better not to earn too much to get an apartment, will be inevitable.

Therefore: keep an eye out for votes and elections

These developments affect all but a few at the bottom or top of the wealth and income statistics. If a decision at communal, cantonal or national level prevents the creation of new living space, this should be taken personally and voted on differently. Because you will feel it at some point. Either when you sign your next tenancy agreement or when you realize later on that you barely have enough money to afford a new-build apartment that is more centrally located and suitable for older people when you sell your home. And in elections, only candidates who propagate and promote housing for all and not just for a minority should be on the list.