MVS Opposes Proposed Rental Yield Revision to Protect Tenants

The Swiss Tenants’ Association (MVS) has officially submitted its formal position regarding the government’s proposed revision of rules governing permissible rental yields. The association argues that the current proposal moves in the wrong direction by expanding profit margins for landlords rather than strengthening protections against abusive rental practices.

Carlo Sommaruga, President of the MVS, criticized the government’s presentation of the plan. He stated that while the Federal Council characterizes the revision as a technical adjustment, it effectively shifts the balance of power in favour of property owners at a time when many households are already struggling with high rental costs.

The Debate Over Regulatory Authority

A primary point of contention for the MVS is the Federal Council’s decision to define permissible yields at the ordinance level. The association contends that such a fundamental shift in housing policy should be established through formal legislation. This would ensure a transparent parliamentary debate and provide the public with the opportunity to exercise their right to a referendum.

The proposed revision aims to solidify a controversial 2020 Federal Court ruling by allowing a significantly higher, permanent surcharge on the reference interest rate for net yields. Michael Töngi, Vice President of the MVS, noted that the core issue is not a lack of profitability for landlords, but rather the difficulty tenants face in enforcing their rights in an environment where they already pay excessive rent.

Did You Know? The MVS is advocating for a return to a 0.5% permitted surcharge, particularly for instances where the reference interest rate exceeds 2%.

Implications for the Real Estate Market

The proposed changes appear to offer specific advantages to large real estate corporations and institutional investors. Unlike private landlords, these entities often rely heavily on equity for property acquisitions. Because net yields are calculated based on this equity, any increase in the permitted percentage directly enhances the attractiveness of real estate as an investment for these large-scale players.

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Analysts expect that this shift could accelerate the trend of moving away from private ownership toward corporate-dominated rental markets. The potential consequences include further upward pressure on rental prices, rising land values, and increased barriers for individuals attempting to purchase their own homes.

Expert Insight: Samantha Carter notes that by institutionalizing higher yield margins through an ordinance, the government risks cementing a high-cost environment that favors corporate balance sheets over individual tenant security. This legislative approach effectively bypasses the broader democratic oversight typically afforded to such significant social policy shifts.

Potential Next Steps

The MVS is calling for a total halt to the current revision process. Should the government proceed, the association suggests that the focus must shift toward establishing clear, statutory rules that protect against excessive rents and improve the enforceability of tenant rights. Interested parties can review the details of the association’s position via the recording of their May 26th journalist webinar.

Frequently Asked Questions

Why does the MVS oppose defining rental yields at the ordinance level?
The MVS believes that such a fundamental change in rental policy belongs in the law, which would allow for a transparent parliamentary process and the possibility of a referendum.

How does the revision affect large real estate corporations differently than private landlords?
Large corporations often use more equity in their property acquisitions; because net yields are calculated based on this equity, these entities stand to gain more from an increase in the permitted yield percentage.

What is the MVS’s specific recommendation for the rental yield surcharge?
The association is calling for a return to a permitted surcharge of 0.5%, specifically for cases where the reference interest rate rises above 2%.

How do you believe changes to rental yield regulations will impact the accessibility of housing in your local community?