Limited Profit Cooperatives in Switzerland
Renting is the dominant tenure in Switzerland (65 per cent), largely provided by individual private landlords and institutional landlords. There is a small diverse social housing sector comprising 1,700 non-profit organizations, primarily small cooperatives and social housing foundations, associations and municipal housing companies. Together these provide about 14 per cent of total rental housing stock, mostly as flats and row housing in urban area
Description
Most social landlords are very small not-for-profit cooperatives – 70 per cent own under 100 dwellings. Cooperatives are eligible for tax privileges in the different departments of the Swiss Federation. Earnings are not distributed but must be re-invested in public interest activities. A non-profit housing association restricts these to building and acquiring dwellings of moderate rents or prices, and profits must not exceed 6 per cent of social capital. Finally, any residual equity after dissolution of the organization must be used for affordable housing.
Cooperatives own the properties they manage. Members own a share but have no equity in their units. These shares are reimbursed to members upon leaving, at the original amount. Tenants do not have the right to buy their dwellings and there are no strong policies to further privatize social housing or strongly promote individual ownership of rental units. Unlike institutional investors, they are less sensitive to business cycles and shifts in markets, so they keep on building in periods when private capital is scarce.
To promote good practice, these cooperative organizations adopted a Charter which is available online.[1] It lays down the core principles of not-for-profit co-operative housing, such as no speculative profits, good-quality affordable and sustainable housing, integration of disadvantaged households and tenant participation and self-determination.
[1] Beat Brechbühl, Daniel Lengauer, and Thomas Nösberger, “Leitfaden Cooperative Governance”, Idéé coopérative, No. 3 (Bern, Stämpfli Verlag AG, 2020). Available at https://www.ideecooperative.ch/fr/article/parution-du-premier-ouvrage-gouvernance-cooperative-lignes-directrices.
Actors involved
Wohnbaugenossenschaften Schweiz
Scale
National
An initiative of:
