Thousands took to the streets of Zurich recently to demand more affordable housing—and to air their frustration with an unlikely target: pension funds, reported SRF.
Their complaint is not new but increasingly urgent. Switzerland’s pension funds are major players in the residential property market, owning around 44% of rental apartments nationwide—a sharp increase from just a few years ago. Their investments, demonstrators argue, are helping drive up rents, even as those same returns are used to finance the pensions of the tenants themselves.
That, critics say, is the dilemma: your pension is being paid by your rent.
The protest brought together a diverse crowd—students, young families, and pensioners alike. Organisers criticised institutional landlords for pushing up housing costs and accused politicians of being too cosy with the real estate sector. Contract terminations, renovations, and higher rents were common patterns, said Walter Angst of the Zurich Tenants’ Association. Whole buildings are often emptied under the pretext of renovation, then re-rented at sharply higher prices. Maximum market rents are applied, he added.
This is displacing people. Once pushed out, many can no longer afford to remain in the same area.
Institutional landlords—especially pension funds—say they are simply fulfilling a legal mandate. Pension funds are required to invest members’ savings in a way that generates returns in line with risk, explained Lukas Müller Brunner, director of the Swiss Pension Fund Association. With bond yields still relatively low, real estate remains a logical choice.
Müller Brunner insists that such investments are socially responsible. Returns from these properties are not paid to investors but go directly to pensions funds, he said. In his view, there is no more socially valuable use of real estate returns than to fund retirements.
Even among demonstrators, the contradiction was not lost. Many of them are insured by the very pension funds they criticise. Of course, pension funds need to generate returns, admitted one protester. But that doesn’t mean they should be charging sky-high rents.
Angst agrees. Pension funds also made solid returns when rents were still stable, he said. The question is: how much return is enough?
At the heart of the issue is a feedback loop: rising rents deliver higher returns, which fund pensions—but at the cost of affordability for those very same pensioners, now or in the future. The logic is sound. The optics, less so.
More on this:
SRF article (in German)
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