Housing shortage despite building land Why private individuals are blocking new builds

The housing shortage is worsening throughout Switzerland. Despite the acute need, numerous building plots remain unused. Where the potential lies and why private owners are holding back building land.

The demand for living space in Switzerland is high, especially in urban areas. The vacancy rate, which will be published next month, is likely to fall below one percent for the first time this year, as reported by the Blick newspaper. This means that the housing shortage has not become an urban problem, but a problem for the whole of Switzerland.

Around 50,000 new apartments would have to be built each year to meet demand. However, the Swiss Association of Master Builders (SBV) is only expecting 40,000 new builds this year. Construction activity fell by 10 percent in the second quarter of 2024, and this will not change much in 2025 either.

One reason: more and more building applications are being rejected - according to Raiffeisen, almost a third of all applications in the first quarter of 2024. Fredy Hasenmaile, real estate expert at Raiffeisen, is calling for an urgently needed construction offensive. The SBC also supports this appeal: "Let's finally build more apartments again!"

Zurich has the largest unused building area

But where is there any building land left in Switzerland? Blick has analyzed the figures from the Federal Office for Spatial Development's building zone statistics for 2022. The city of Zurich tops the list of the largest unused building land reserves.

A whopping 288 hectares are undeveloped there - the equivalent of more than 400 football pitches. Winterthur, Bern, Bellinzona, Geneva, Lausanne, Lugano and Lucerne also have large reserves of building land that are not yet being used.

In addition to institutional investors or the city, a significant proportion of this land is privately owned. "However, it can be assumed that private landowners are more likely to hoard land than institutional investors," says Hasenmaile.

Objections delay 70 percent of construction projects

It is important to know that small gaps between buildings within residential areas, for example between two buildings, also contribute to the high number of building plots. These gaps can often only be built on sensibly by increasing the utilization rate.

"A higher utilization rate would be a key element for successful densification," explains SBC spokesperson Jacqueline Theiler to Blick.

Another reason is objections, which delay around 70 percent of all construction projects in the city of Zurich. Since a ruling by the Federal Supreme Court in 2011, people who are not involved can also lodge an objection. According to the building association, this is often used to protect one's own view.

Private individuals pass building land on to the family

The current regulation that objections are free of charge also means that construction projects are often delayed by years. And: 75 percent of Zurich's urban area is listed in the national inventory of protected sites. This causes additional blockades.

This situation does not only affect Zurich. In around 450 of over 2,000 Swiss municipalities, more than 20 percent of the building zones are undeveloped. Private owners often leave their building land unused for decades and pass it on within the family. In recent years, building land has been an attractive investment, which is why many have had no incentive to build on it.

Since 2014, however, municipalities have been obliged to adapt their building zones to the population growth of the next 15 years. Municipalities that have zoned too much building land must rezone. Unused land is not being returned to the market.

No rapid solution in sight

Some cantons have already taken measures to mobilize unused building land. For example, municipalities can set deadlines for building development in the public interest or levy charges for as long as a plot of land remains unused.

Nevertheless, a quick solution to the housing shortage is not in sight. "We have watched for too long as a toxic cocktail has been brewing," says Hasenmaile to Blick. Sustainable change requires a rethink - both at a political level and in society.