The President of the Swiss Association of Tenants (ASLOCA) has warned that the country is sitting “on a social time bomb” thanks to the increasing cost of renting a house or apartment in Switzerland. Carlo Sommaruga told a press conference that the Swiss government needs to take control of the housing market and regulate rental costs.
Rising rents and lack of housing: the Swiss rental market in 2023
“Soaring rents, a drastic lack of affordable housing, and now rising energy prices and rising benchmark interest rates. For years, the pressure on tenants has continued to increase,” ASLOCA wrote in a press release. They argued that many tenants are too worried about how their landlord will react if they ask for a rent reduction - a phenomenon that deprives renters of over 14 billion francs a year, according to the organisation.
Speaking to reporters at a press conference on February 18, Sommaruga said that “the pressure on tenants is constantly increasing. We are sitting on a social time bomb: the situation has been precarious for a long time for low-income tenants, but the middle class is also affected. Politics must act urgently.” He noted that renters in Switzerland now spend a quarter of their salaries on housing and energy after the recent meteoric rise in the cost of electricity.
Households in Switzerland pays 370 francs more a month for housing
Linda Rosenkranz, General Secretary of ASLOCA, told reporters that the average household now pays 370 francs more a month compared to the year before. “Returns that go directly into the pocket of real estate groups. 370 francs for which no benefits were provided and which would otherwise have been invested in a family outing or continuing education,” she noted.
This concern also extends to future rises in interest rates, with Vice President Michael Töngi telling the press conference that “tenants are already under severe financial pressure. If the ancillary costs, and soon the reference interest rate increase, this will have a very significant impact on [tenants'] wallets.”
Calls for new social housing and rent controls in Switzerland
To solve the housing crisis in Switzerland, ASLOCA demanded that local, cantonal and federal governments build more public housing. They also said that parliament should stop the “attack on tenancy law” - a reference to current plans in parliament to make it easier for landlords to increase rents and terminate rental contracts.
Most controversially, the organisation said that the state should impose rent controls on housing so that the authorities can put a stop to excessive rental costs. Sommaruga said that it will be up to parliament to decide how this system would be controlled and encouraged political parties to make the idea part of their manifesto pledges for this October’s federal elections.
Swiss homeowners satisfied with current tenancy law
This last request provoked the most backlash from the Homeowners’ Association, with President Hans Egloff telling SRF that Swiss tenancy law is already “adequate and well developed. There is no need for government intervention here.” He added that similar proposals have already been rejected by parliament in the past.
Finally, he said that there are other reasons why landlords have increased rent over the past few years. Egloff made the point that most are just reacting to the high demand seen in Swiss cities like Zurich and Geneva. He also predicted that while rental costs will be high in the most popular areas, costs will not rise everywhere.