IFHP: Towards active municipal land policy for affordable housing provision – Insights from land use practices in Switzerland

IFHP: Towards active municipal land policy for affordable housing provision – Insights from land use practices in Switzerland

By Gabriela Debrunner, PhD student at Bern University, Institute of Geography, Research Group “Political Urbanism and Sustainable Spatial Development”, former Research Fellow at IFHP

During my stay in Copenhagen I investigated the municipal land policy approach of the City of Copenhagen and its potential effects on affordable housing provision (see IFHP blog February, 3rd 2020). As I had to leave earlier due to the Corona virus, unfortunately, I could not finish my research conducted in Denmark (at this point I would again like to thank all[1] who participated in my research). However, I have worked passionately during the last months to integrate my findings into a recent study employed in Switzerland. The results have lately been published in the scientific journal Land Use Policy (open access published by Elsevier: Land Use Policy, 55, https://doi.org/10.1016/j.landusepol.2020.104993.). I would like to summarize some of the key results for this IFHP blog article and discuss how they could be applied also to the Copenhagen urban housing context.

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Affordable housing for all? Current housing challenges in Swiss cities

In Swiss cities, affordable housing shortages for low- and middle-income households have intensified in almost every Swiss city in recent years. The current housing situation in urban areas is charaterized by an overheated housing market with vacancy rates below 1% and rising rents. Consequently, municipal authorities are increasingly confronted with dealing with tenants suffering from social exclusion due to rising rents after modernization and (re)development. Other than in the majority of Danish cities, the current Swiss housing situation is even more worrying considering that Switzerland, having the lowest homeownership rate in Europe, is regarded as a nation of tenants. Housing provision traditionally lies as the responsibility of the profit-oriented private rental sector (institutional investors, pension funds, investment funds). To be more precise, in Swiss cities (where over 70% of the population lives), 63% of households live in apartments owned by private investors and are strongly dependent on the homeowners’ decisions.

The housing question is a land policy issue!

Besides the fact that housing represents a basic human need and an essential good, it moreover is a resource that is economically significant. Traded on the free market, housing is a commodity with enormous economic potential which is why it is often treated as a highly valued collateral. Especially in cities, where demand for housing is high and the potential for capital accumulation is lucrative, the competition between actors interested in using urban land for housing is rising and rents constantly increase.

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Consequently, from a theoretical point of view, the provision of affordable housing in dense city areas is to be regarded as a land policy issue. Stated differently, rents only increase due to higher land prices stipulated by proximity within the financial center, centrality to transport nodes, or accessibility to services which directly influences the rental cost level. Through strategic “land policy”, however, a state and/or a municipality can intervene into the way land is used, distributed, and valued in order to promote the provision of affordable housing. Land policy, more precisely, encompasses all the political-legal measures and policy instruments implemented by the municipality to deal with the issue of land use and rent regulation. Besides “classic” planning or housing policies, land use policies also involve tenancy laws, environmental policies, heritage policies or property rights which all influence the land price.  

Findings

In our study about “land policy for affordable housing” (see Debrunner & Hartmann, 2020), my aim was to analyze how Swiss municipal planning administrations cope with affordable housing shortages in a context of urban land scarcity. Specifically, I asked: How do municipal planning authorities promote affordable housing in densifying cities? I investigated the land policy strategies employed in four Swiss municipalities (among these Zurich and Basel) which are all confronted with increased scarcity of affordable housing and increased densification pressure.

Results show that to promote affordable housing, an “active municipal land policy approach” is required. Such an approach includes the activation of both new and available policy instruments but also strategic competencies of the municipal planning authority. In particular, I showed how different land policy instruments function (see Figure below) and are strategically activated by municipal planning authorities to provide affordable housing. Even though our results are limited to four Swiss cities, potential for generalization results from the following identified causal mechanisms which are expected to have broader significance in other urban contexts too, including for instance in Copenhagen:

From Debrunner, G.; T. Hartmann (2020): Strategic use of land policy instruments for affordable housing. Coping with social challenges under scarce land conditions in Swiss cities, Land Use Policy, 55, https://doi.org/10.1016/j.landusepol.2020.104993.

City planners and other stakeholders (e.g. NGOs like IFHP) can influence the private investors’ behavior in favor of increased housing affordability if they are able to find ways which reinforce their position vis a vis powerful landowners. To do so, they need to activate public and private law instruments which do not always need to limit property owners’ rights but also work with property rights. These intervention ways include, first, the activation of policy instruments that regulate land uses by using public policy with no direct impact on the use rights of land such as economic incentives for landowners (see (1) supply-subsidies). Second, instruments using public policy leading to a regulation of use rights on formal ownership ((2) zoning). Third, instruments leading to a legal redefinition of property rights in the Civil Code ((3) contracts). And fourth, instruments that redistribute property rights such as expropriation or targeted purchase of land ((4) property rights). You can find a detailed description and critical analysis of these policy instruments in our paper. I strongly advise that some of them might also be suitable and applicable to handle current housing challenges in Danish cities, particularly in Copenhagen.

Finally, the findings of this study help municipal planners, practitioners and policy-makers to prepare for future housing challenges: a stable ‘right-to-housing’ for all does not necessarily require the mere introduction of new policy instruments, but the strategic activation of available instruments (e.g., targeted purchase of land, ground leases, strategic zoning) does matter!

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[1] Thank you very much!: Nina Steensen, Anton Øsgårds and Morton Nielsen from IFHP, Christian Hogsbro, Ellen Hojgaard Jensen from the Danish Town Planning Institute, Curt Lillegren, Anna Pedersen, Claus Juhl, and Lina Olsson from Malmø University.


Article republished from IFHP 
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