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RENTING

‘Apartment exchange’: How could Switzerland curb rent prices?

Depending on where in Switzerland you live, your rent may be exorbitantly high, but with the housing shortage in many parts of the country, simply moving into cheaper accommodations is not always an option. But a tenants group has proposed a solution.

Published: 29 March 2023 14:48 CEST
'Apartment exchange': How could Switzerland curb rent prices?
Apartment exchanges could curb costs, tenants association says. Photo by Brina Blum on Unsplash

Tenant advocacy groups and politicians have been looking at various ways to make housing more affordable to low and middle-income tenants.

Among solutions being currently proposed is to step up the construction of ‘public utility’ housing — that is, affordable flats that are built on publicly-owned land.

READ MORE: How can Switzerland solve its housing shortage and curb rents?

Another proposal is to ban the construction of second homes (or transforming primary residences into holiday accommodations) in areas suffering from housing shortage.

READ MORE: How do second homes contribute to Switzerland’s housing crisis?

These, by the way, are suggestions coming from left and center parties; right-wing groups, on the other hand, see limiting immigration as the best way to tackle the housing problem.

Another measure is now being put forth by the Swiss Tenants Association (ASLOCA).

In an interview he gave to Watson news platform on Tuesday, ASLOCA president Carlo Sommaruga said that exchanges of apartments among tenants would keep the rents down.

Sommaruga, who is also a socialist MP, has filed a motion to this effect in the parliament. Specifically, it allows tenants to exchange their dwellings among themselves — for instance, when moving from one region to another, or seeking a bigger (or smaller) apartments.

How exactly would this work?

Under the current system, when an old tenant leaves and a new one arrives, landlords have a right to increase rent if the reference rate — a benchmark used to set rents — has increased in the meantime.

For instance, if the old tenant’s contract is based on a 1.25 rate and it climbs (as it is expected to in June), then new tenants would have to pay a correspondingly higher rent.

Currently, 54 percent of rental contracts in Switzerland are based on that rate, but regionally the number is higher.

In the Zurich area, as well as in central Switzerland, for instance, more than 60 percent of rental contracts are based on a 1.25-percent reference rate, according to Moneyland consumer platform. 

If ASLOCA’s proposal goes through (it is not yet clear when it will be discussed), then the apartments could be swapped at the original rent, regardless of the rate.

Not surprisingly, “the landlords oppose” this measure, Sommaruga said. “They prefer classic terminations in order to be able to increase the rent for new leases, while the exchange results in maintaining rents at their original level.”

There would, however, be a downside to this arrangement.

Apartments would be swapped in ‘as is’ condition.

The landlord would not be responsible for making repairs or other works to the apartment that is being exchanged between tenants.

He or she would, however, approve the new tenants to make sure they are financially able to pay the rent.

Additionally, Sommaruga said that the new law, should it be enacted, would make each tenant in the swap responsible for the other paying their rent. “The tenants would mutually verify that the other is solvent, by communicating their income, lack of criminal record, etc.”

“The purpose of the motion is to get the law changed,” he added. “Modalities would be defined later. There could be just cause for refusing the exchange, The measure could also specify that these exchanges are only possible when there is a housing shortage.” 
 

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SHOPPING

REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Lidl, Aldi and Denner claim their prices beat those of large Swiss retailers. But is this really the case?

Published: 18 April 2024 11:40 CEST
REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Common consumer goods (except one) are typically more expensive in Switzerland than in neighbour countries — sometimes by much.

This includes food.

READ ALSO: Why Switzerland is the most expensive country in Europe

That is especially the case of largest Swiss chains, Migros and Coop, while Denner, Lidl, and Aldi say their food prices are significantly lower.

To find out whether this claim is actually true, journalists from RTS public broadcaster’s consumer programme went shopping in each of these supermarkets. 

They purchased the same 30 products in each of the five supermarkets on the same day, to ensure that the price comparison is as accurate as possible.

Not what you’d expect

In each of the stores, the investigators purchased only the lowest priced items from the supermarkets’ budget lines.

It turned out that most money was spent at Denner, widely considered to be one of the lowest-priced supermarkets.

The total for the 30 items came to 181.67 francs — more than was spent at the country’s more expensive stores, Migros and Coop, where identical basket of goods cost 170.37 and 167.82 francs, respectively.

(That, in itself, is surprising as well, because Migros typically has lower prices than Coop).

As for the other two supermarkets, these purchases cost 166.59 francs at Aldi and 162.05 at Lidl.

So the difference in price between Migros and Coop versus Aldi and Lidl is minimal. But what is even more surprising is that the cost of groceries at ‘cheap’ Denner is actually highest of the lot, by between 11 and nearly 20 francs.

Migros and Coop performed quite well in the comparison survey because most of the items purchased in those stores came from their budget lines, M-Budget and Prix-Garantie, respectively, both of which were introduced to compete with Aldi and Lidl.

But how important is price? Patrick Krauskopf, a professor of anti-trust law, told RTS: “German, French, English, Spanish and American consumers pay a lot of attention to price. In Switzerland, consumers place more emphasis on quality of service. Price is almost secondary.

“Distributors have realised this and have stopped competing fiercely on price.”

Big versus small

While this particular analysis focused on supermarket chains, another survey, conducted at the end of 2023, looked at prices in small grocery shops. 

Common logic has it that it is cheaper to shop in supermarkets than a local corner store, because big retailers purchase products in large quantities, which means lower prices for consumers.

However, prices in some local shops were found to be “up to 30 percent cheaper than Migros and Coop.” 

The reason is that in order to cut costs, small grocers may buy their products from the most cost-effective suppliers, a tactic which includes importing some items.

Another reason for lower prices is that unlike major supermarkets, which ‘pretty up’ their stores for better presentation of products, these small retailers are ‘no-frill’ shops. This means little money is invested in décor, so there are no extra costs to pass on to consumers.

 READ ALSO: Why it might be cheaper to avoid the big supermarkets in Switzerland
 

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