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RENTING

EXPLAINED: How the Swiss Tenants Association wants to tackle the housing shortage

Rental prices in Switzerland have been soaring for years with no end in sight. Now the nation's association for protecting tenants has called on politicians to take action with a series of demands.

Flats in Zurich, Switzerland.
Flats in Zurich, Switzerland. Photo by Vincent Dörig on Unsplash

The vacancy rate for dwellings in Switzerland is currently 1.31 percent — well above the long-term national average of 1.07 percent, according to a study published on Thursday by Raiffeisen bank

However, these figures don’t show that the problem is geographical: the housing market has dried up in some parts of the country but not the others.

Vacancies will remain well below the average, meaning that housing will soon become significantly more expensive for more and more households, the bank reported.

Various solutions have been proposed by real estate experts and government officials to overcome Switzerland’s housing shortage.

The latest one, which comes from the Swiss Tenants Association, recommends limiting the living space allowed for each person, as is already the case in cooperatives and public housing.

This means that a single tenant would be entitled to a maximum of two rooms, thus making larger accommodations available for families. Though for larger apartments, too, restrictions are set to be introduced. At least four people should occupy a five-room apartment, for example.

READ MORE: Reader question: Can I sublet my rented apartment in Switzerland

Tenants disagree…

Many Swiss tenants, however, criticise the association’s suggestion that living space be limited per person. Instead, they argue that one’s living space is – perhaps rightfully – a private matter as long as the tenant can afford to pay the monthly rental cost.

Moreover, though some tenants – such as many older people who have lived the majority of their lives in the same large, cheap apartment – may be willing to downsize to smaller living arrangements, but they will struggle to find suitable housing at the same price. This is a problem even the association recognises and it therefore demands that tenants are able to swap their current, larger property for a smaller alternative on the same contractual terms as their existing rental agreement.

City and canton officials from all over Switzerland, as well as representatives of various associations from the construction and housing sectors, were due to meet with the Economy Minister Guy Parmelin to discuss this, and other possible solutions, to the shortage.

Rents and returns need to be monitored

The Swiss Tenants Association argues that the issue with the skyrocketing rents in Switzerland is that landlords, a fair chunk of which includes large corporations, listed businesses and insurance companies, are generating far too high rents that tenants – who are in a dependent position and fear speaking out against rent increases – need to be protected from.

The association says that as a direct result of the ever-increasing rents and returns – which though limited in accordance with Swiss law are not monitored – around 370 francs per household illegally landed in the pockets of real estate companies every month during 2021, amounting to 10.4 billion francs in (stolen) rent overall.

It is now calling for rents and returns to be monitored automatically on an institutional level and says that sanctions should be a viable option going forward.

READ ALSO: How Switzerland’s urban housing shortage is spreading to the countryside

Master plan for more affordable housing

The association is also requiring Swiss municipalities to provide it with so-called special zones for new and affordable living spaces to be built in their respective regions.

However, for this to be possible, the land – it says – must be owned by the public sector, not privately. Additionally, there must be a right of first refusal as well as a restriction on the sale of land that already belongs to the public sector.

At the same time, the organisation finds that the government needs to improve protection against the – sometimes biased – dismissal of prospective tenants. Both property managers and landlords in Switzerland are setting increasingly stricter criteria when allocating (already scarcely available) apartments, with some refusing to rent to couples with children.

Fabian Gloor, lawyer at the Swiss Tenants Association for the Deutschschweiz (German-speaking Switzerland), said that one way to avoid this unfair dismissal for tenants would be to introduce a minimum occupancy regulation which would reduce the chance that childless singles and couples would receive an apartment that is better suited for families.

This has, however, been met with contrasting views from Switzerland’s political parties.

The association also wants landlords to cease increasing rents as a result of renovation work while arguing that no tenant should face losing their home due to rising ancillary costs.

A people line up in a queue

Trying to find a flat in Switzerland? You may find long lines for viewings. Image: Pixabay

Parliament to make rental conditions more difficult for tenants

In the coming months, the Swiss parliament is set to discuss four legislative amendments which, according to the Swiss Tenants Association, would severely impact the legal situation for renters in Switzerland. The parliament will consider granting landlords more favourable conditions when terminating a rental contract for personal use, while making rent increases easier for landlords to enact.

Additionally, it will ponder a further restriction of the right to sublet and for tenants to have a more difficult time contesting their initially agreed upon rent in the future. 

READ ALSO: Zurich hit by affordable housing shortage amid record-high immigration 

The National Council has since spoken out in favour of two amendments to the tenancy law in favour of property owners, which are expected to be passed by parliament in autumn 2023. Once greenlit, landlords will have to explicitly agree to sublet their property in writing and are to be given an extraordinary right of termination in future if the tenant does not comply with the requirements for subletting.

The landlord should then also be able to refuse subletting if the subletting is planned to last for more than two years.

The National Council also approved a bill on the issue surrounding landlords or their family members wanting to use their privately owned rented property for personal use. Specifically, it should no longer be possible for the owner of the property to terminate the rental agreement for an urgent personal need, but rather they will have to assert a significant and current personal need based on an objective assessment. The proponents of this change hope that it will speed up procedures in the event of disputes.

The tenants association is strictly against the move and has announced a referendum – for which it will begin collecting signatures in the autumn of 2023 – should the parliament speak in favour of tightening the Swiss tenancy law.

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How Switzerland is set to make it easier for landlords to evict tenants

After the National Council in March, the Council of States has this week accepted two projects aimed at toughening Swiss tenancy law — in favour of landlords and at the detriment of tenants.

How Switzerland is set to make it easier for landlords to evict tenants

Tenants in Switzerland are already facing difficult times, as rent hikes for many apartments will go into effect in October.

Now another setback is on the horizon: MPs, mostly from from the right-wing and right-centre parties, have voted to introduce two further measures that would place additional burdens on renters.

They are:

Easier eviction

Currently, if landlords want to evict their tenants, they must demonstrate an “urgent” need to use the property.

Under proposed law, however, lease terminations by landlords will be much easier; all the owner has to do is to claim a “current” rather than “urgent” need to have their dwellings vacated by tenants.

The reason for this move is that landlords must have the right to reclaim the property they own, when they need to do so, without jumping through too many legal hoops, as is presently the case, according to the motion. 

However, this move, according to socialist MP Lisa Mazzone, who opposed the change, would be “a pretext for terminating the contract and then increasing the rent,” for subsequent tenants, without waiting for the obligatory ‘notice period’ to do so.

READ ALSO: When can my landlord legally increase the rent? 

For the Swiss Tenants Association (ASLOCA), the new legislation, if ultimately passed, would “unbalance lease law to the detriment of tenants. It aims to facilitate evictions and subsequently rent increases when concluding the new lease contract,” said ASLOCA’s president Carlo Sommaruga.

Sublets

In principle, all tenants have the right to sublet their apartment for indefinite period of time, but only on the condition that the landlord is informed and agrees to this arrangement.

If the agreement with the sub-tenant is above board — that is, if it pretty much matches your own contract — then you should have no problem getting the green light.

READ ALSO: Can I sublet my rented apartment in Switzerland?

Under new proposed legislation, however, the landlord may refuse a sublet which lasts more than two years.

Also, if the subtenant’s status changes — for instance, if they get married or divorced — the owner must be notified and could be allowed to terminate the contract on this basis.

What’s next?

Both proposals are now ready for final votes on the last day of the autumn parliamentary session, that is on September 29th.

But as both houses of the parliament have already approved both motions, the final vote is just a formality.

On Monday, the Tenants Association ASLOCA said it will launch a referendum, should these two revisions become law in a bid to overturn them. 

“In these times of skyrocketing rents and charges, this concerted attack by the real estate lobby against tenants is unacceptable,” Sommaruga said. “These deteriorations in tenancy law are intolerable.”

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