"Removing subsidies would pose a democratic and institutional problem."

Each month, we ask different sectors and professions about specific themes.

For this month of November, we went to knock on the doors of developers and large real estate groups to get their point of view on a particularly sensitive issue these days in Bern: that of subsidies intended for the renovation of buildings.

The answers of Olivier Feller, Secretary General of the Fédération romande immobilière.

A group of experts appointed by the Federal Council proposes to drastically reduce subsidies for the renovation of buildings. How do you receive this idea?

As Secretary General of the Fédération romande immobilière, I can hardly agree with the experts' proposals. The Confederation keeps stating that the energy transition is a priority and wants our country to reach the objectives of the Paris Agreement on climate change. In this area, the building sector has a decisive role to play.

During the vote in June 2021, the people rejected the revision of the CO₂ Act on the grounds that it included too many taxes and constraints. Parliament then went back to work and developed several incentive-based instruments. The experts' proposals amount to annihilating a large part of these instruments even though they were recently approved by the Federal Chambers and even by the people. Indeed, in the June 2023 ballot, the people accepted, by 59%, the Act on climate protection targets, on innovation and on strengthening energy security (LCI).

This law provides in particular that the Confederation, through its budget, will finance to the tune of 200 million per year over ten years a program to encourage the replacement of electric and combustion heating installations (fuel oil, gas, etc.). In practice, the group of experts now recommends the elimination of this incentive program. This obviously also raises a democratic and institutional problem.

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

The group of experts indeed states in its report that it "would be necessary to reduce to a minimum the payment of financial contributions to private individuals, property owners and companies." It adds, in technocratic gibberish that is difficult to understand, that "the redistribution of contributions to property owners implies regressive effects from the point of view of distribution policy." It ends up attacking economic sectors, whose interest in incentive contributions for energy matters is such that it is "profitable for them to exercise effective lobbying."

As Secretary General of the Fédération romande immobilière, this verbiage seems meaningless to me. Parliament wanted to combine several incentive measures in order to stimulate the energy renovation of buildings. There are fiscal measures, subsidies, legal aspects related to tenancy law, etc. On the ground, one feels how decisive the combination of these incentive instruments can be in triggering the decision of private owners to renovate a house or an apartment building.

These federal measures are, moreover, complemented by additional schemes in many cantons. The draft revision of the Vaud Cantonal Energy Law, which the Council of State recently transmitted to the Grand Council, explicitly relies on the instruments recently adopted by the federal Parliament, instruments that the group of experts now proposes to partially remove.

Parliament wanted to combine several incentive measures in order to stimulate the energy renovation of buildings. There are fiscal measures, subsidies, legal aspects related to tenancy law, etc. On the ground, one feels how decisive the combination of these incentive instruments can be

Without these subsidies, should we fear a large increase in the bill for tenants?

The rules concerning tenants' financial participation in energy renovation work are clearly established in the OBLF, the Federal Ordinance on the lease of dwellings and business premises.

The first principle is that the costs of energy renovation can be passed on 100% to rents, whereas other value-adding works, without an energy component, can only be passed on within a range of 50 to 70%.

The second principle is that the share of energy renovation costs financed by state contributions cannot be passed on to rents, which is, moreover, common sense. Let us be clear: fewer subsidies paid for the energy renovation of rental buildings means more potential rent increases.

Could this jeopardize Switzerland's carbon neutrality goals for 2050?

The targets to be achieved by 2050 in terms of CO₂ emissions are ambitious as such. They are all the more so in the current geopolitical circumstances, in an increasingly unstable world, with the United States and China engaged in an economic war and multiplying protectionist measures, and a Europe seeking to resist its decline.

If in this context the Confederation begins to remove incentive measures in the building sector recently approved by Parliament, I have the feeling that it will become illusory to achieve the goals set for 2050.

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