The increase in 'commercial accommodation' exacerbates the housing scarcity in Zurich.
Rewritten Article:
In the pricey city of Zurich, some landlords are cashing in on the demand for short-term, furnished accommodations by offering ridiculously expensive studios. A 14-square-metre studio on Brandschenkestrasse, for instance, commands a whopping 2,602 francs a month. And it's not an isolated case. Other listings propose a 22-square-metre flat for 4,350 francs, or a 30-square-metre one for 5,050 francs.
These ultra-expensive units are part of the "business flats" market, catering to employees of international companies who need temporary accommodations. Since the rent is usually paid by employers, these apartments provide a steady income stream for their owners. But this lucrative trade has a dark side: it fuels Zurich's housing crisis, where affordable apartments are scarce.
The Situation:Some landlords are converting regular residential flats into business apartments, driving rents up significantly. This practice, which isn't unique to Zurich but is also prevalent in other Swiss cities, makes these converted accommodations inaccessible to people seeking affordable housing, worsening the housing crisis.
Regulation:The administrative court in Zurich ruled, in the summer of 2024, that such apartments can only make up 10 percent of total homes in each of the city's districts. However, not everyone agrees with the clampdown. Critics argue that as long as there is demand for these rentals, they are justified. They claim that the people who rent such properties contribute to Swiss prosperity with their work and consumption.
Typical Rents in Zurich:Like any city, rents in Zurich vary depending on the district. For example, rents in Kreis 1, right in the city center, are the most expensive, with an average rent per square meter of 36 francs. next come Riesbach (Kreis 8) and Hottingen (Kreis 7), with 32 and 30 francs per square meter, respectively. A one-bedroom apartment in the Zurich center (Kreis 1) costs 2,278 francs a month – significantly less than even the smallest business accommodations.
Read Also: How new renters are paying the price of the housing shortage
Insights:Zurich's rental market operates under strict Swiss tenancy laws, which include index-linked rent adjustments for existing contracts and regulated subletting. Short-term rentals face significant restrictions or bans in several districts, thereby limiting business-oriented short-stay housing alternatives. Building activity faces legal restrictions, with 70% of projects encountering objections that delay construction. Sustainability mandates prioritize refurbishing existing buildings over new construction. Asking rents for new leases are 26% above existing contracts, disproportionately affecting middle-class tenants. The high entry costs, limited availability, and growing corporate demand from expats/finance sector workers create implicit incentives for businesses to secure long-term residential leases, further tightening supply and worsening the housing shortage for both residential and commercial users.
- In Zurich's expensive housing market, some landlords are earning huge profits by renting out small, temporary units to international employees, despite the units being a significant factor in the city's housing crisis.
- A popular example is a 14-square-metre studio on Brandschenkestrasse, which costs a whopping 2,602 francs per month, while a 22-square-metre flat is priced at 4,350 francs and a 30-square-metre one at 5,050 francs.
- These business flats, part of the "home-and-garden" sector in the real-estate market, provide a steady income stream for their owners due to employer financing.
- However, the Zurich administrative court ruled in 2024 that these business apartments should constitute no more than 10 percent of total homes in each district, a decision not universally accepted.
- Critics argue that as long as there is demand for these rentals, they are justified since the renters contribute to Swiss prosperity through their work and consumption.
- The median rents in Zurich vary across districts, with Kreis 1, the city center, being the most expensive at an average of 36 francs per square meter.
- The situation is complex, with strict Swiss tenancy laws, District-wise short-term rental restrictions, legal barriers to construction projects, and growing corporate demand from the finance sector worsening the housing shortage for both residential and commercial users.
