"The climate transition will be social or it won't happen!"

Each month, we survey different sectors and professions on specific themes.

For this November, we went knocking on the doors of developers and large real estate groups to get their point of view on a particularly sensitive topic these days in Bern: that of subsidies intended for building refurbishment.

The answers of Carlo Sommaruga, president of ASLOCA Switzerland.

A group of experts appointed by the Federal Council proposes drastically reducing subsidies for building refurbishment. How do you welcome this idea?

ASLOCA Switzerland is deeply concerned about all the cuts proposed and currently under discussion in Bern. We are even more so because they would affect tenants or the organization that defends them (e.g.: total cut of indirect press support by 2030).

As for the cut specifically concerning subsidies for building refurbishment, we consider it a blatant breach of the promises made during parliamentary debates as well as during the debates held prior to the votes. It is also nonsense if one is aiming for a zero-emission strategy!

The experts argue that most solutions for refurbishment are already profitable and that, in that case, subsidies no longer make sense. Does this argument seem valid to you?

Subsidies are intended to reduce equity or borrowed funds, which in rental housing reduces the rent increase related to these refurbishment works. The reasoning presented by the Federal Council may be valid for owner-occupiers, but certainly not for rental properties and tenants because of the costs related to heating.

The current desire to specifically eliminate subsidies for building refurbishment represents a blatant breach of the promises made.

Without these subsidies, should we fear that it will be the tenants who will once again pay the price with a sharp rise in their rent?

Tenants always end up paying. Indeed, there is no mechanism to control rents after works to verify that the increase actually takes into account the subsidy deducted from the landlord's investment. In some cantons, there is a system to control rents after works, that is to say cantons that have a form of LDTR. This allows setting the rent for a given period, even if the dwelling is empty.

But that is not the case in the majority of cantons. And even with this type of mechanism, the landlord will take the first opportunity to raise rents to market level. Subsidies must therefore continue to be promoted but with a control mechanism. The climate transition will be social or it will not happen! 

Could this jeopardize Switzerland’s 2050 carbon neutrality targets?

Yes, we think so.

This article has been automatically translated using AI. If you notice any errors, please don't hesitate to contact us.