Federal Council wants to curb rental explosion: what the package of measures really benefits tenants

“Federal Council remained inactive for fifteen years”

Tenants should not have too high expectations. The tenants’ association is also very disappointed. It is a start that the Federal Council recognizes the problem, says association chairman Carlo Sommaruga (64). But that was it for the positive. “The proposals come far too late and go far too little,” says the Geneva SP Council of States.

Party member Jacqueline Badran (62) supports the measures in principle, but also criticizes that the Federal Council has waited far too long. “Rents have risen continuously since 2008, even though they should have fallen dramatically due to low interest rates. The Federal Council watched as the tenants became the cash cows of the country.”

The Federal Council specifically plans to do the following – and what will actually improve it:

• Passing on inflation: Landlords cannot only increase rent if the reference interest rate rises. Other reasons include inflation and so-called ‘general cost increases’, for example due to maintenance work. Landlords are now allowed to pass on a maximum of 40 percent of inflation to tenants. In the future this should only be 28 percent. This is an absolute side issue, criticizes rental association chairman Carlo Sommaruga. The impact on rental prices is minimal.
• No flat-rate surcharges: In German-speaking Switzerland, it is the practice that landlords can claim a general cost increase every year – regardless of whether they actually have higher costs or not. Such fixed rates should no longer be allowed in the future. Badran welcomes this measure. The Owners’ Association warns that this means more work for the dispute committees.
• More information for new tenants: Some new tenants receive a form from the canton with the rental agreement. This should include not only the rent paid by their predecessors, but also the past and current reference interest rates and inflation. This should make it easier for tenants to check whether the initial rent is legal – or should be disputed. However: In the vast majority of cantons, tenants do not receive such a form. There is only an obligation in Basel-Stadt, Geneva, Lucerne, Zug, Zurich and in some municipalities in the cantons of Neuchâtel and Vaud. A formal requirement for the whole of Switzerland, which the left has been calling for for a long time, is still not up for discussion.
• More information about rent increases: In all cantons, landlords must inform their tenants of a rent increase via a specific form. An additional announcement about this will follow in the future. You can also dispute an increase if you suspect that the landlord is making excessive profits or that the rental price is not normal for the location or surface area. The tenants’ association criticizes that this measure would have at most a minimal effect.

Moreover: “Short term” is a flexible term for the Federal Council. The changes could not take effect until early 2025 at the earliest, confirmed Martin Tschirren, director of the Federal Housing Office. The intention is that the concrete proposals will only be sent for consultation with cantons, associations and other interested parties in the summer.

The Federal Council is investigating system changes

Tschirren himself admits that the impact of the proposed measures will not be “immense”. “If you wanted to go further, you would have to fundamentally change the entire system. And so far there are no political majorities for this,” he tells Blick. If you want to achieve something, you have to move forward in small steps.

But the Federal Council is also considering a bigger step. The Ministry of Economic Affairs has been commissioned to investigate whether the current model for calculating rent is still up to date. It will likely take much longer before results are available – and rents will continue to rise.