As the cost of renting a house or apartment in Switzerland continues to rise, the Swiss Tenants’ Association (Asloca) has launched a new referendum designed to cap rental prices. The association argued that landlords are overcharging for the properties they let and that current attempts to reform the housing market do nothing to address the concerns of renters.

What would the Swiss rent control proposal mean for tenants?

As part of the Asloca proposal, due to be submitted this autumn, landlords would no longer be able to justify a rent increase based on the average rental price of similar properties in the neighbourhood. Instead, rent rises would only be implemented on those with existing rental contracts because of “real costs” incurred by landlords  - construction, maintenance, upgrades, etc - or changes to the reference interest rate for mortgages.

In addition, all rent rises would be capped at 2 percentage points of the reference rate. If applied to the current reference rate, this would mean that landlords could only put up rent by a maximum of 3,75 percent per year. 

Most significantly, the proposal would also include what was described as “automatic and regular” rent controls on all properties. While the exact details are unclear, under the new plan it would no longer be the responsibility of the tenant to appeal rent rises and ask for rent reductions. Every rental agreement in Switzerland would be checked for its legality.

Asloca condemns broken tenancy rights system in Switzerland

Speaking to reporters Asloca vice-president and Green National Councillor Michael Töngi said that the current system, where tenants are responsible for taking action against rent increases, is broken. He argued that most are afraid of asking for lower rent for fear of reprisals from their landlord. 

"We finally want to reduce the excessive yields that are currently costing tenants billions every year," he continued. Data from the Bass research office has suggested that landlords in Switzerland collect 10 billion francs too much in rent each year. The Federal Housing Office also suggested that the price cited in a “large proportion” of Swiss rental contracts would be ruled illegal if they were ever brought to court. 

Rent cap would make the housing shortage worse, say landlords

In response, Swiss Landlords’ Association director Markus Meier described the proposal as an “own goal” for tenants, arguing that the policy would only make the shortage of housing worse. He made the point that there would be less incentive to build new housing if rental costs were capped, driving up rental prices by scarcity alone.

The announcement comes as citizens prepared to vote on two reforms to the Swiss housing market in November. One would require the explicit consent of a landlord before a tenant is allowed to sublet, while the other would make it easier for landlords to terminate rental contracts if they wish to reclaim the property for personal use. 

Meier said the two votes are meant to make the rules around subletting and termination clearer and bolster landlords' rights. For Töngi, "It's about landlords getting rid of their tenants more quickly and then being able to increase the rent more easily."