Daniel Leupi on Zurich’s housing policy
Zurich is growing and with this growth comes an increasing demand for affordable housing. Chief Financial Officer Daniel Leupi talks about the progress made in the city's housing policy, the pressure on the real estate market and the instruments with which the city of Zurich aims to maintain the social mix. The focus is on new buildings, targeted acquisitions and political efforts to combat displacement.
Daniel Leupi has been responsible for the City of Zurich’s real estate policy as Chief Financial Officer since 2013 and can point to tangible results. With the Leutschenbach, Letzi, Hard and Hardau I housing estates, almost 830 new non-profit apartments have been created. At the same time, the city has acquired 24 properties in recent years. Leupi also attributes this success to the strengthened acquisitions department.
With the new housing fund, non-profit developers can now also apply for financial contributions for land purchases and new buildings. The depreciation contributions financed from these funds enable lower rents despite rising market prices. At the same time, a new letting ordinance ensures that the approximately 10,000 municipal apartments are allocated in a socially responsible and transparent manner.
A growing portfolio with responsibility
At the end of 2024, the municipal portfolio will comprise 58 housing estates and over 500 individual residential properties, a total of 1,400 buildings with almost 10,000 non-profit apartments. In addition, there are 220 active building rights for over 6,000 apartments and further projects in preparation. The city thus acts not only as a planner, but also as a major real estate owner with a clear focus on affordable housing.
Challenges of a dynamic market
Despite all efforts, the challenge remains great. According to Leupi, the housing shortage is a structural problem that occurs in every attractive city center. It is particularly problematic that many investors are primarily constructing high-priced new buildings, while existing apartments are being squeezed out. Although the market is growing, it is not socially balanced. The city cannot create affordable housing for everyone, but it can create more and more affordable housing.
Market intervention or tenant protection?
The discussion surrounding the case of the so-called “SUGUS houses” has reignited the debate on social mixing. Leupi does not see this as a problem, but rather as a functioning example of affordable housing in private hands. At the same time, he warns against a blockade through excessive regulation, as has occurred in some cantons through housing protection laws. In Zurich, the City Council is therefore supporting the popular initiative “Protect affordable housing”, which aims to prevent vacancies while maintaining flexible implementation options at municipal level.
Investors responsible
For Leupi, part of the solution lies in the industry’s own responsibility, albeit with clear expectations. While some owners continued to act fairly, others exploited the market situation ruthlessly. Excessive rent mark-ups when tenants change are not isolated cases. This is why more government involvement is needed for lower and middle incomes. Not as an intervention in the market, but as a balance to its dynamics.
Growth yes – but in a socially responsible way
A central problem remains that many new replacement buildings are displacing affordable housing. Although new projects create living space, they often increase prices. Institutional investors and property developers are called upon to plan in a more socially responsible way in future. Otherwise, social acceptance of immigration, bilateral agreements and the liberal economic system as a whole would be at stake.
The “slow” building permit process
The supposedly slow building permit process is a frequently criticized topic. Leupi puts this into perspective and emphasizes that the administration works efficiently. The median time for new building applications is 121 days. The trend is downwards despite the rising number of cases. What takes time, however, are appeals, project changes and amendments to conditions. The number of these has risen significantly in recent years, from 229 to 410 cases per year.
As a solution, Zurich relies on consulting, digitalization and process optimization. The aim is to create planning certainty and increase resistance to appeals.
Airbnb, renovations and new standards
The impact of short-term rentals is a hot topic. Back in 2020, Zurich decided to amend its building and zoning regulations in order to create regulatory requirements for Airbnb & Co. Implementation is currently stalling because the decision is before the Federal Supreme Court. However, Leupi believes the city is on the right track.
At the same time, he advocates binding industry standards in dealing with renovations to cushion social hardship. There are already positive examples, such as when the rent remains constant when moving within the same housing estate. Leupi would like to see more models like this, including from private players.
Three key areas of action
Leupi currently sees three urgent tasks for the city government. Firstly, the targeted expansion of the city’s residential portfolio through construction and purchase. Secondly, the broad establishment of the housing fund in order to strengthen non-profit organizations and thirdly, a political offensive for more federal and cantonal involvement in the area of non-profit housing construction.
Zurich has shown what is possible. The task now is to continue on the path we have taken, with social moderation, economic foresight and political consistency.