Second homes vote triggers uncertainty

The resort of Silvaplana is waiting to see what concrete measures will be outlined in federal legislation Keystone

Is the decision by Swiss voters to limit the construction of second homes an economic disaster or a chance for the affected communities?

Reaction is split, with politicians, home-owners, hoteliers, estate agents and environmentalists all chipping in but all aware that until the federal government works out how to implement the result, not much is going to change.

On Sunday, 50.4 per cent of Swiss voters agreed that “in every commune where at least 20 per cent of homes are second homes, no more second homes may be built”.

But what’s the situation with second homes which have been granted permission but have yet to be built? What in fact counts as a second home and how will the market react? The list of questions is long – and there are few answers.

“We’re going to have to wait until federal legislation determines what is concrete,” Claudia Troncana, mayor of Silvaplana, a mountain resort in southeastern Switzerland, told swissinfo.ch. “We’ll then adapt our local legislation.”

Viewing the result from abroad was Simon Malster, director of the London-based Investors in Property, which claims to sell more chalets and apartments in the Swiss, Italian, Austrian and French alps than any other company.

“I think they’ve got the wrong end of the stick,” he told swissinfo.ch.“Most of the people touched by it are happy with the system as it is, with local controls which are already quite restrictive.”

Malster pointed to Zermatt, where foreigners cannot buy at all and there is a limit to new construction every year, and Saas-Fee, where there is an annual limit of 1,500 square metres of new construction.

“These places have already taken local initiatives to restrict new construction so it makes no sense that a rule should be imposed from on high by people who are not affected, like Basel,” he said.

  

Credit Suisse analyst Thomas Rieder argued that the result wouldn’t make a big difference for foreign property investors, due to the tight laws governing foreigners buying residential property in Switzerland – only 1,500 new second homes are available each year.

“With the new vote it will be possible to buy existing second homes but not new ones,” he added.

Nationwide repercussions

Like many other mountain communes, the percentage of second homes in Silvaplana – at 60 per cent – is way above that named in the initiative.

Mayor Troncana stresses, however, that in recent years communes in the Upper Engadine have taken steps to change this.

“In 2008, we introduced a quota with the result that 800 square metres of second homes are now built a year as opposed to 2,000 or 3,000 square metres,” she said.

Silvaplana is to date the first and only commune to have agreed on a steering tax for non-rented holiday homes – a measure which is currently being challenged in court.

The decision could have repercussions nationwide, because other communes are toying with such a move in the fight against cold beds.

“Grave consequences”

Troncana predicts “grave direct consequences”, quoting estimates that 15 per cent of jobs in the Upper Engadine would be lost in the short run.

One part of the problem could be exported, since cross-border workers would be hit first, she said, adding that the neighbouring Italian region of region of Chiavenna, which relies heavily on the Upper Engadine, would have major problems.

“There are cross-border workers who have worked here for 35 years and who have families to feed.”

There is also uncertainty among hoteliers, Guglielmo Brentel, president of the Swiss Hotel Association (hotelleriesuisse), told swissinfo.ch.

He wondered what it would mean for hotels which have had to rent second homes as part of their business model to survive.

But why do people fork out half a million francs for a home up in the mountains that they only use for a couple of days a year? With that money one could spend a fortnight a year in a five-star hotel for decades…

“There isn’t an economic explanation,” Brentel said. “But obviously the head chooses to stay in the hotel room and the heart to own a property. It’s a status symbol.”

He also pointed out that guests were becoming increasingly focused on comfort. “They don’t want to travel with loads of luggage – they want everything already at the destination. The cushions have to smell like they do at home.”

Town vs country

Beat Jans, a parliamentarian for the centre-left Social Democratic Party in canton Basel City, said the result showed voters were concerned not only about their countryside but also about their tourism.

The Social Democrats were the only main party to support the initiative, although Jans said they would have preferred a “suitable counterproposal”.

He admitted it was a problem that a majority of voters in urban cantons and a minority of those in the mountains wanted to ban further construction, but he said mountain cantons had also scuppered important issues for towns at the ballot box.

Simon Malster, who is also a lawyer by training, didn’t think the people of Valais would accept a vote passed by the narrowest of margins dictating to the people living in the resorts what they could or could not do.

“It’s like allowing the people living in the mountains and in the countryside to prohibit the building of anything over three floors high in the whole of Switzerland! I’m sure that would have gone down just as badly in Zurich as this vote has in Valais.”

Ultimately, Malster said the vote’s supporters would achieve the reverse of what they intended. 

“Prices will go up, as now there will be no new construction. It’s the law of supply and demand,” he said.

“The other point that seems to have been forgotten is that the vast majority of second homes are owned by Swiss, not foreigners. It’s predominantly the Swiss themselves who will be affected by this.”

Government reaction to the vote

The government has warned it will not be easy to implement a 20% limit for holiday homes.

Environment Minister Doris Leuthard called on all sides involved to cooperate to clarify open questions and prepare the necessary legal reforms which respect the new constitutional amendment.

Leuthard said many questions about the scope of the initiative and pending construction permits remained to be answered. She said communes, home owners, the tourism industry and the initiative committee should work together with parliament and the government to help implement the terms of the constitutional amendment in the law.

The initiative

The initiative “to end the invasive construction of secondary residences” proposed that the constitution be modified to ensure that secondary residences do not account for more than 20% of residential areas or of the total surface area of each commune.
 
The initiative will oblige each commune to publish a quota plan covering primary residences and an annual report detailing how the plan is being implemented.
 
The organisation behind the initiative, Helvetia Nostra, says on its website that the initiative did not aim to demolish already established secondary residences. “What is already built or under construction stays there.”

(With input from Peter Siegenthaler and Simon Bradley)