Housing Cooperatives and Social Housing in Switzerland

Housing cooperatives have become increasingly popular in Switzerland over the last decades. However, misconceptions persist – chief among them, the conflation of cooperative housing with social housing. Here Adrian Guisan explains by which aspects they differ and complement each other. 

If "social housing" is broadly defined as housing managed by a non-profit landlord, then cooperatives qualify.¹ Yet, the term is more commonly associated with subsidized housing reserved for low-income households, making it inaccurate to equate cooperative housing with social housing.

Social housing in Switzerland

Currently, Switzerland lacks a federal social housing policy. From 1974 to 2001 federal subsidies were granted to encourage the construction of low-cost housing, but this policy was discontinued in favor of more indirect measures promoting non-profit housing (see next section). However, at the cantonal and municipal levels, various policies help improve low-income households' access to housing.

For example, the cantons of Geneva and Vaud offer subsidies to developers who construct low-rent housing.² These subsidies reduce rents for a set period after construction and come with strict tenant income and occupancy criteria, which landlords must monitor and report to public authorities.

While any developer can apply for these subsidies, municipal foundations and societies primarily carry out such projects. Cooperatives can also participate, and, in some cases, are required to. In Zurich for example, housing cooperatives building on public land must include a percentage of subsidized housing in their development as part of the city's social mixing strategy.³

It should also be noted that in addition to those subsidies for construction (“à la pierre”), cantons and municipalities can also offer direct financial support to tenants to help cover housing costs (“à la personne”).

What are housing cooperatives?

A more detailed description of housing cooperatives can be found there, but housing cooperatives are democratic, membership-based organizations that build and manage housing for their tenants-members, which collectively own the cooperative. They operate on a cost-rent principle, meaning that rents are based on operating costs (i.e., capital, administrative, and maintenance costs). As such, most housing cooperatives are recognized as “public utility housing” and can benefit from various forms of support (see next section).

A key distinction between cooperative and social housing lies in ownership and management. Cooperative housing refers to a unit owned and managed by a housing cooperative, whereas social housing is defined by its subsidized and “state-controlled” nature. Cooperatives enjoy a high degree of autonomy, are typically self-funded, and are under the democratic control of their members – not the state.

Additionally, access and rent determination differ. In cooperatives, access is based on membership and rents are based on operating costs. Even at cost-rent, newer housing cooperatives may not be affordable for low-income households due to the current high price of land and construction materials. In contrast, social housing ties access (and sometimes rent) to tenants’ income.

Support for housing cooperatives

As mentioned earlier, cooperatives recognized as public utility housing providers can benefit from various support mechanisms.⁴ 

At the national level, the Confederation and cooperative associations established a revolving fund providing favorable short-term loans for young cooperatives lacking equity. They also created a bond-emitting cooperative, offering stable, long-term loans at advantageous rates.

Cantons and municipalities have also developed several instruments to support cooperative housing provision. For example, in the city of Zurich, where cooperatives own almost 25% of the total housing stock, the municipality can^5,6:

• Provide guarantees to facilitate cooperative’s access to credit
• Acquire cooperative shares (under certain conditions) – with certain obligations attached – to help build equity.
• Offer ground leases, reducing barriers to land access
• Implement planning regulations that favor them (i.e. quotas)

Conclusion

Housing cooperatives play an important role in affordable housing provision, balancing autonomy with indirect state support. While they receive assistance through favorable loans, groundleases, and guarantees, they remain self-organized and financially independent, setting them apart from traditional social housing. Nevertheless, cooperatives are not always accessible to low-income households, reinforcing the need for social housing to ensure all segments of the population have access to decent housing.

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Literature

[1] Lawson, J. (2009). The transformation of social housing provision in Switzerland mediated by federalism, direct democracy and the urban/rural divide. European Journal of Housing Policy, 9(1), 45-67.

[2] In Vaud « Logements à loyers modérés » (LLM) and in Geneva « Habitations à loyer modéré » (HLM) or « Habitations bon marché » (HBM)

[3] Kockelkorn, A., Schindler Kilian, S. M., & Hirschberg, R. (2024). Cooperative Conditions: A Primer on Architecture, Finance and Regulation in Zurich. gta Verlag, ETH Zurich.

[4] Balmer, I., & Gerber, J. D. (2018). Why are housing cooperatives successful? Insights from Swiss affordable housing policy. Housing studies, 33(3), 361-385.

[5] Kockelkorn, A., Schindler Kilian, S. M., & Hirschberg, R. (2024). Cooperative Conditions: A Primer on Architecture, Finance and Regulation in Zurich. gta Verlag, ETH Zurich.

[6] Debrunner, G., & Hartmann, T. (2020). Strategic use of land policy instruments for affordable housing–Coping with social challenges under scarce land conditions in Swiss cities. Land use policy, 99, 104993.