Building must become easier again

Together with Patrick Schnorf, Partner at Wüest Partner, we are already making an initial assessment.

I see spatial planning and the lack of development opportunities as the main drivers of the housing shortage. But the causes are of course even more complex and it's worth taking a look at the background.

In 2014, the Spatial Planning Act was revised with the aim of reducing the size of excessively large building zones and making better use of existing building land reserves. In theory, the law ensures that growth is still possible.

There are a number of reasons for this. Often it is simply the complexity, the requirements, the financial viability and individual interests that make projects economically unattractive. Sometimes the timing is simply not right for the landowners. Ultimately, however, there is simply a lack of development opportunities at the moment. Especially in suitable, well-developed locations in larger cities and their inner agglomerations. Growth and demand have been underestimated and too little attention has been paid to the economics of real estate development. Put simply, in order for investments in existing buildings to be worthwhile, substantial zoning is generally required, which has happened in very few cases. In other words, the Spatial Planning Act and the current implementation mechanisms are not proving their worth in practice.

Of course, the current market conditions are not currently conducive to construction projects. Rising interest rates, inflation and increasing regulations and objections are curbing investors' willingness to invest. They are also confronted with higher construction costs and still comparatively high land prices. This, as well as the reasons mentioned above, means that too little is being built at the moment. And this construction slump will continue to accompany us in the coming years.

If there were, the current housing shortage would not have come about. It seems important to me that you can't just start in one place. We need to think about the political and regulatory aspects and work on various approaches to ensure that sufficient living space is made available. This includes, first and foremost, a more generous assessment of utilisation so that more development space is available in well-developed locations. Although this would be the case in theory, in practice the reserves cannot be fully utilised in many cases. The reasons for this lie in the aforementioned economics of the often underestimated additional use of existing buildings, but also in the increasing cost intensity and complexity of construction. Sluggish planning permission procedures must be corrected and objection possibilities limited. Last but not least, building regulations have been tightened in recent years – albeit with good intentions. In my opinion, a liberalisation and homogenisation of the regulations with a view to practicability could help to provide more and more affordable living space.

The fact is that regulation has increased massively. There are, of course, requirements such as building for the disabled and energy requirements, the benefits of which cannot be denied – but which make building more expensive. And then there are also issues where I personally believe that we are overshooting the mark. For example, noise protection. Increasing electromobility and falling speed limits are reducing noise emissions in cities. Nevertheless, the requirements for buildings are becoming ever more stringent and noise protection is increasingly preventing residential buildings in highly developed locations. Yet it is precisely these that would be necessary and important from the point of view of economical land use. I would like to see a more liberal approach here.

The industry would be prepared to provide the necessary volume. Until the middle of the last decade, construction was brisk due to the expiry of the first stage of the revision of the Spatial Planning Act. There was even talk of the danger of ghost towns. This dynamic has now been made impossible by the aforementioned developments, even though the demand for housing would be very high.

In my opinion, serial, modular construction could represent an interesting opportunity. However, this would require new structures in the construction industry and a willingness on the part of the authorities to simplify building permits. In Switzerland, where every city and every municipality has its own building regulations and its own building laws, this is hardly conceivable at present. However, such a construction method is also a question of acceptance and building culture. There is a strong demand for individuality in this country. Does the resident population want to live in standardised buildings? Probably not.

There are some interesting aspects beyond the construction industry. One of them is the still rather static way of thinking when it comes to typologies of use, as they appear in the building laws. What do I mean by that? While living space is scarce, there is sometimes overcapacity in commercial buildings. We should think about flexibilisation of use here. Home offices, local working or office requirements in an industrial context have already led to the boundaries for uses becoming more fluid. We should continue to think about the more efficient use of scarce resources with new concepts. In view of the desire for individuality, smaller residential units with smart floor plans would be one approach, as would communal areas. Combined with a good infrastructure framework and other mixed uses that flow into one another, the rigid pattern of separation of uses could be broken up.

Unfortunately, the signs are not favorable. Deregulation and higher development reserves do not seem to be feasible in the near future. On the contrary. There is a great deal of skepticism about densification in cities and municipalities. People think economic prosperity is good, but do not want the consequences of a growing and increasingly dense settlement area on their own doorstep.

In an economic system that continues to grow and due to Switzerland's attractiveness, our country will remain a country of immigration – unless there is a change of course regarding the Agreement on the Free Movement of Persons. If there is not enough living space available, the housing situation will remain tense in the short and medium term. It is likely to become even more acute. This is also reflected in politics. Calls for more regulation of the housing market are becoming ever louder. However, additional regulation will not help to alleviate the housing shortage across the board. A rethink is needed, more capacity must be made available in building zones in well-developed locations and building must become easier again.

Patrick Schnorf is a Partner at Wüest Partner and a member of the Data, Analytics and Technology division management as well as a member of the Board of Directors. He has been monitoring and analyzing the Swiss construction and real estate markets at Wüest Partner for 19 years.

Wüest Partner is an innovative and independent service provider in the real estate industry. Since 1985, Wüest Partner has been creating a sound basis for decision-making by combining expertise, data and digital solutions. With a broad range of services, they help their clients to gain new perspectives and achieve sustainable value creation.

© Architonic

Head to the Architonic Magazine for more insights on the latest products, trends and practices in architecture and design.