Government council doubles housing subsidies
The cantonal government of Zurich has rejected the popular initiative "More affordable housing in the canton of Zurich" and is instead backing a strong counter-proposal. The aim is to strengthen non-profit housing construction by doubling the framework credit for cantonal housing subsidies to CHF 360 million.
The Government Council of the Canton of Zurich rejects the popular initiative “More affordable housing in the Canton of Zurich”, which provides for a right of first refusal for municipalities to promote non-profit housing construction. Instead, the cantonal government relies on proven structures and instruments for the rapid and effective promotion of affordable housing.
The counter-proposal provides for a doubling of the framework credit for cantonal housing promotion loans from the current CHF 180 million to CHF 360 million. This enables co-financing at communal level and thus creates a potential of CHF 720 million. This means that more flats can be subsidised and higher loan amounts can be granted per property. The Housing Promotion Ordinance is to be amended accordingly to increase the upper limit for loans from 20 to 25 per cent of the total investment costs.
Criticism of the right of first refusal – encroachment on the guarantee of ownership
The Government Council criticises the proposed right of first refusal in the popular initiative as an encroachment on the guarantee of ownership and freedom of contract. Private companies, including institutional investors such as pension funds, would be at a disadvantage, which could lead to legal uncertainty and deter private investment. This could inhibit residential construction activities and exacerbate the existing housing shortage.
The right of first refusal also harbours the risk of lengthy appeal proceedings and could place a burden on municipalities and their taxpayers. The cantonal government sees the counter-proposal as a more efficient solution for creating affordable housing quickly.
Housing shortage in the canton of Zurich
Demand for housing in the canton of Zurich has exceeded supply for years. Construction activity is below average, which is leading to an increasing housing shortage. Although a large proportion of Zurich’s population lives in long-term tenancies and is therefore less affected by rising rental costs, the need for action remains great.
The Government Council emphasises the need to stimulate construction activity in order to increase the overall supply of housing and curb rental and purchase prices. The counter-proposal aims to provide targeted housing for financially disadvantaged sections of the population.
Effective promotion instead of right of first refusal
The government council’s counter-proposal promises rapid and effective promotion of non-profit housing construction by doubling the framework credit and amending the Housing Promotion Ordinance. This will create a solid basis for combating the housing shortage in the canton of Zurich and providing more affordable housing for all sections of the population.