This week, the Swiss Tenants’ Association submitted a popular initiative aimed at curbing rents after collecting more than 140,000 signatures.
The proposal would require rents to be reviewed automatically at regular intervals. If a review found rents to be too high, landlords would be obliged to reduce them. The initiative is backed by an alliance of left-wing parties, trade unions and advocacy groups, including the Socialist Party.
The association argues that housing costs have become an unsustainable burden for many households. Nearly 40% of tenants spend more than one-third of their income on rent, it says, making housing the largest expense for many families.
It also contends that rents have failed to fall despite lower interest rates because existing controls are inadequate. Around 60% of Swiss households rent their homes and, according to the association, tenants pay an average of CHF 360 a month more than they should. That amounts to roughly CHF 10 bn a year in excessive rent payments, it argues.
The calculation is based on a study that estimates a theoretical legal rent by applying changes in the official mortgage reference rate, inflation, maintenance and operating costs, and permitted capital improvements between 2006 and 2023. Several of its assumptions are open to debate. For example, maintenance costs are assumed to rise by just 0.5% a year, implying an increase of around 9% over the period. Yet official construction-price indices suggest that the cost of maintaining residential buildings rose by roughly 25–30% over the same period.
Swiss rents are already linked to interest rates through the country’s unique reference-rate system. When the rate falls, tenants are generally entitled to request a rent reduction; when it rises, landlords may seek an increase. In theory, the mechanism allows rents to move broadly in line with landlords’ financing costs. In practice, however, tenants’ groups argue that many landlords fail to pass on reductions when interest rates decline, leaving millions of francs in potential savings unclaimed. The tenants’ initiative would require rents to be reviewed automatically rather than relying on individual tenants to request a reduction.
Since 2006, landlords have also faced increasingly stringent environmental standards, requiring many to invest in measures such as better glazing, façade and roof insulation, and low-carbon heating systems. Although Swiss tenancy law allows landlords to recover part of the cost of value-enhancing improvements, many maintenance and energy-efficiency investments cannot be passed on in full through higher rents. Critics argue that this means the study understates landlords’ legitimate costs.
The Swiss Homeowners Association opposes the initiative, arguing that it tackles the wrong problem. Instead, it blames rising rents on a chronic housing shortage. Too few homes are being built while Switzerland’s population continues to grow, pushing up rents, particularly for newly let properties. It argues that reducing rental returns would further discourage investment in new housing, risking an even tighter supply of rental accommodation.
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Initiative website (in French) – Take a 5 minute French test now
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