Swiss government rejects proposal to control rent as prices surge 32% in 20 years

The Swiss government has rejected a proposal to protect renters in Switzerland against excessively high rent and has instead put forward a counter-proposal. Since the decision, the Swiss Tenants Association has launched an urgent appeal, warning that rent prices in Switzerland have surged 32 percent over the past 20 years.

Government rejects Rent Price Initiative

Earlier this year, the Swiss Tenants' Association (Der Mieterverband or MVS) submitted a popular initiative to tighten controls on rent and limit the profit that landlords can make, hoping to prevent rent from becoming “abusively high.” The proposal, “Yes to protection against abusive rents (Rent Price Initiative)”, sought to amend the Swiss constitution.

The Federal Council has now reviewed the proposal and, while it “wants clear and transparent rules to protect against abusive rents,” has decided to reject the initiative. The rent proposal would be costly and could negatively impact investment in housing, stated a Federal Council press release.

Recognising that current rules are “complex and sometimes opaque”, the government instead put forward an indirect counter-proposal that contains “clear, transparent and comprehensible rules governing rent setting.” 

The proposed system is a “statistically based comparative rent”, which would be a benchmark used to decide whether the rent asked for in a new lease is fair or abusive. The government also proposed clearer rules based on an indexation system for ongoing rent contracts.

Tenants' Association issues warning to government

In response to the government’s rejection, the Swiss Tenants' Association launched an urgent appeal to the Federal Council, arguing that its suggestions will cause rent to rise even higher. With over 100.000 signatures at the time of writing, the association wants the government to “defuse this time bomb” of excessive rent prices and “stop this attack on tenants immediately.”

To convey the reality many tenants face across the country, the association released stark figures on International Tenants Day. Over the past 20 years, the cost of renting has risen by 32 percent despite declining mortgage and interest rates, reports Watson. 

The issue affects the majority of people living in Switzerland; with around 64 percent of residents renting, the country has the highest proportion of the population that rents in the whole of Europe.