Keywords

6.1 Discussion of Key Results

In this chapter and Chapter 7, a final discussion and conclusion are drawn whether and how the implementation of densification objectives leads to social sustainability in housing. This is done by analyzing the institutional regime (key finding 1), and the different actors’ strategies using housing stocks under scarce urban land use conditions (key findings 2 to 4). Making explicit the local governance mechanisms of possible trade-offs and power games among actors (key finding 5) in densification procedures is a new contribution of this research project to neoinstitutionalist political ecology research.

SQ1: How do institutional rules affect the outcomes of densification in terms of social sustainability in housing?

Key empirical finding 1: Institutional incoherence between landowners’ and tenants’ rights, and the extent of rules influencing the implementation of densification objectives, lead to socially unsustainable housing development

Results of Articles 1 to 4 confirm hypothesis 1 (see Sect. 3.6): in a context of densification, the Swiss institutional regime in force is indeed key for disentangling how and why social sustainability in housing is produced. Article 1 demonstrates how the unequal distribution of legal power between public policy and property rights in the Swiss federal regulatory framework, but also the extent of formal rules impacting the densification implementation process, affect the way actors use housing goods and services (e.g. affordable living space, energy source). Whereas property titles are strongly secured by the Swiss Constitution and the Civil Code, and are very enduring and long-lasting, Swiss public policies regulating housing stocks are quickly revised depending on current political majorities. More precisely:

Article 1 shows that while in Swiss federal planning, tax and energy policy the parliament has only recently agreed to introduce new legislation that stronger enshrines energy efficiency objectives, legal amendments to support social interests of densification (e.g. in housing, planning, or social welfare policy) have not been made. Federal policy instruments in favor of socially sensitive redevelopment such as the introduction of a fixed minimum share of 10% non-profit housing in the Swiss ConstitutionFootnote 1 or the obligation for private homeowners to pass tax benefit for energetic renovation to tenants, have been politically debated but never fully enacted.

In addition, on November 20, 2020, the Swiss Federal Court only recently decided that landlords can increase the rent by several hundred Swiss francs in case new renters move into an apartment (in stock as well as in new built housing). This decision was made based on the grounds that institutional owners (e.g. pension funds) would make too little profit due to the low interest rates on the property markets. It is therefore expected that the number of mass dismissals in the rental segment will increase in Switzerland since owners can benefit of fast and increasing rent revenue (Perricone, 2020).

Consequently, even though the land use context in Swiss cities has changed, Swiss property owners still benefit from public subsidies for energetic renovation or modernization wherever housing stock is being densified. Owners must neither pass the received subsidies to the tenants nor are they obliged to stick to certain rent levels where real estate is demolished and refurbished resulting in higher costs for residents. In sum, owners are encouraged to densify through public incentives (e.g. for energetic renovation, energy efficiency), but without any restrictions or duties regarding rent increase, dismissal of elderly, or disruption of long-enduring communities. While this power guaranteed to landowners has not triggered any conflicts on unbuilt green- or brownfields, the legal tensions between owners’ and residents’ interests have increased in a context of densification.

Indeed, even though the socio-spatial conditions under the compact city model have changed significantly, results show that property owners are still allowed to densify existing housing stocks without further tenancy restriction. They can terminate an open-ended rent contract within three months without any specific reasons and without any legal obligation to compensate the tenants, for example, for moving costs. Moreover, in newly built housing, it is possible for landowners to start the rent at a new level. They do not have to follow rent levels as would be mandatory for renovated real estate. Therefore, property owners are highly motivated to densify through complete demolition as they can make a lot of profit through increased rent revenue after rebuilding.

Moreover, their position is secured by strongly protected property titles. This means that the owner is free to define the profit margin to be targeted on the parcel and can set the rents according to market prices. Hence, urban densification is essentially profit-driven in Switzerland since property owners do not face any institutional boundaries that would prevent them from acting socially unsustainable. Housing providers are not forced by law to follow a more socially inclusive solution (e.g. in terms of housing affordability, prevention of discrimination).

Tenants, in turn, are not in the legal position to be heard or to counteract. Regardless of their strength of social integration, age, or years of residency in a neighborhood, tenants can legally be evicted within three months. Under the Swiss rules of tenancy, residents do also not need to be informed about upcoming redevelopment tasks before receiving the contract termination. In daily practice, this often leads to social eviction at short notice. Tenants may counteract in court; however, in most cases they do not use this option as they neither have the financial means nor the expert knowledge to do so.

Under this given legal setting, results of Article 1 show that the Swiss federal government withdraws from its responsibility of covering the housing needs for all income segments. In the name of federalism, it passes the duty on to the cantons, municipalities, and ultimately the individual subjects. The federal government does not enforce more rigorous institutional rules and policy instruments to protect tenants. Because legal regulations and policy instruments, which would directly alleviate the land rent (e.g. rent level or social eviction controls, quotas for affordable housing, zoning measures etc.), would lead to strong owners‘ resistance (see key finding 2). Simultaneously, owners make full use of their rights to private ownership including their rights to control housing access, rights of management, rights of exclusion, or rights of alienation.

Ultimately, results of Articles 2 and 4 reveal that this institutional incoherence between property owners’ and tenants’ rights in the Swiss federal regulatory framework trickles down to cantonal and municipal levels. While private property owners’ profit-making interests are very strongly protected by law in Switzerland, tenants do not experience the same legal protection of their affordable housing needs. This legal dependence from the owners’ position encourages the performance of densification as an “Eco-Business” at the expense of its social function (key finding 5).

SQ2: What use strategies do actors (owners and non-owners) follow to contribute to socially sustainable housing in a densifying city?

Key empirical finding 2: Resistance power of landowners prevents socially sustainable housing development in a densifying city

Results of the four articles of this book confirm hypothesis 2 (Sect. 3.6): private property owners together with the private building and real estate industries working on their behalf are identified to be the main driving force behind tenants’ social exclusion in Swiss cities. For them, densification represents a lucrative business and financial asset since they benefit from enhanced revenue on centrally located parcels (more apartments). In comparison to the development on greenfield outside of the built-up urban areas, they regard residential urban densification as an attractive business for stable rates of return and as a solid risk diversification strategy. As a consequence, consolidation in Swiss cities increasingly becomes a process led by capital in the sense that it is primarily shaped and guided by private actors. They intend to boost the city’s economic activity through intensive investment into housing (re)development. Owners (including speculators), investors, and the private construction industry congruently benefit from this emerging “Business of Densification” as it leads to a substantial increase in land rent and income revenue.

Moreover, the private companies (investors, banks, insurances) studied in Articles 2 and 4 are of a certain size, and are thus able to possess large-scale housing projects. They can manage them through considerable means (purchase of land, demolition of old infrastructure, construction costs, etc.). In addition, investors (such as Credit Suisse pension fund) acknowledge the compact city as an opportunity to legitimize the transfer of property rights power over public planning principles (densification) from one scale to another and to justify the precedence of densification accorded to financial values over use values. They promote densification in a way that neglects distributional consequences or social equity issues and ignores the residents’ needs for increased affordability, integration into decision-making, or community cohesion. Results show that these firms neither engage with the concerned communities nor are they aware of intersectional power structures. Because their rights to private property prevent them from choosing more socially stable solutions.

Goals of social inclusion, community cohesion, or housing accessibility are not considered in decision-making since investors by law do not feel compelled to act socially responsibly (key finding 1). As long as they are not legally required to do so, and their position is secured by strong property titles, owners acknowledge no need to support tenants’ interests. Furthermore, results of Article 1 show that the interests of these private development firms are well represented in the federal parliament. Profit-oriented goals of densification become increasingly integrated into political games taking place at higher decision-making levels. Through the coalition of political forces (in legislative and executive committees), the introduction of formal rules that aim to promote more socially inclusive objectives in housing is constantly prevented, for example, in regard to the provision of affordable housing, mass dismissals, or improved tenure security.

Key empirical finding 3: Effective tenants’ resistance against rent increase and displacement is limited due to their weak legal standing in front of powerful landowners

The assumption made in hypothesis 3 cannot be confirmed: results of the four articles of this book reveal that tenants confronted with contract termination in most cases neither have the financial means nor the legal standing to counteract the landlords’ decision effectively. Under the given Swiss federal institutional setting (key finding 1), and the decision-making strategies applied by property owners (key finding 2), tenants’ capacity for resistance against rent increase and displacement is limited. Swiss property owners are well equipped to resist tenants’ claims thanks to their strong position as titleholders. Even though residents try to resist through street rallies, formal petitions, or the collaboration with local tenants’ associations, they do not succeed in defending their social interests effectively (e.g. for affordable housing provision). They face discrimination due to their low-income status and weak legal position. Hence, even in the Swiss direct democratic system, tenants’ grassroots resistance does not lead to enhanced socio-political pressure on governments and owner-actors to obtain measures against dismissal and displacement.

In the studied municipalities, NIMBY-efforts prevent planned projects only to the extent that new developments might be delayed, but never fully rejected. Moreover, property owners (but also public authorities) develop strategies to counteract such NIMBY-opposition in advance in order to prevent building delays, which cost them a lot of money. For instance, Article 4 shows that property owners have started to promote a temporary housing model that works outside of tenancy law (loaning law), which obliges low-income households to live in precarious housing situations in buildings shortly before demolition. The city government of Zurich has not prohibited this practice even though it leads to the constant erosion of tenants’ social rights and legal security. In doing so, owners prevent former residents from squatting their buildings, which would delay their consolidation and upgrading plans. By supporting this housing format, public authorities manage to implement densification goals effectively.

In addition, results of Articles 2 and 4 reveal that property owners have developed professional communication strategies with tenants and planning authorities to hinder social resistance. For example, to convince residents to participate, investors develop strategies to make densification palatable to them even though it leads to the loss of their social habitats. They offer, for instance, economic compensation measures to tenants such as alternative dwellings in parts outside the city to diminish NIMBYism that may delay their projects. Simultaneously, public planning administrations too develop a financial language and management skills that smooth the dialogue with private investors and tenants. Participatory forms of planning such as cooperative planning, test planning, or urban design competitions play a central role in this context as they make the densification process more efficient and profitable for both sides—investors and local authorities.

In essence, the constant erosion of their social rights, relations, and contacts to family members, neighbors, and friends worsens the housing situation of tenants living in private rental housing stocks in Swiss cities. Even though they do their utmost to rebel and to make their protest against densification and upgrading visible, their weak legal standing hampers effective resistance. Even though they might be included in participative forms of planning, in case they do not agree with the plans, they do not have the legal standing to actually incorporate their visions into formal rules and regulation. As a consequence, they remain heavily dependent on the decisions made by the landowners.

Those being displaced have become the victims of powerful forces of capitalist urbanization and differential spending power in the Swiss legal system. To cope with this legal situation, informal mechanisms of accountability occur within self-organized arrangements that enable community-based collective action, for example, in the form of non-profit housing associations or non-profit temporary housing organizations (see Article 4). However, I argue in this book that current housing challenges need to be solved in a way that includes profit-oriented housing providers as well, because the non-profit sector only holds a small share of the total housing stock in Switzerland.

Finally, results of Article 1 show that enhanced tenants’ lobbying power is needed to change the regulatory framework in force in favor of more social goals. While the Swiss homeowners’ association manages to constantly influence the implementation of energy policy instruments or tenancy regulations to make densification less socially diverse, for many years, tenants’ activist groups have not succeeded in activating new rules that promote tenants protection. This lack of access to formal decision-making at the federal level (due to lack of lobbying power) constantly reinforces social inequalities in the Swiss legal and housing policy system. This subsequently also affects regulatory regimes at the cantonal and municipal levels.

Key empirical finding 4: Municipal authorities’ strategic activation of public and private law instruments leads to socially sustainable housing development in a dense city

Results of Article 3 confirm the assumption made in hypothesis 4: a shift towards active municipal land policy is necessary to promote socially sustainable housing in a context of urban densification. Municipal planning administrations are in the key position to intervene into private development interests. They can prevent tenants’ social exclusion, but they therefore must know how to densify.

Article 3 provides a central theoretical contribution to this field of research in the sense that—by conducting comparative case study research—the article makes a clear suggestion what an effective municipal land policy strategy for socially sustainable housing transformation might look like. In a context of urban land scarcity, public authorities do not only need to understand the technical challenges such as contamination. They must also (re)consider neighborhood conflicts or the underlying property rights’ structure if they aim to fight urban sprawl without discrimination, displacement, and social exclusion. Article 3, moreover, indicates that planners should be aware that, at the center of the action system are the owners, who initiate the densification process as well as the private homebuilding industry working on their behalf. Together they form a private alliance that favors densification in order to promote business (key finding 2).

To counteract such profitability objectives—resulting in rising rents and displacement—results in Article 3 show that municipal planning authorities must find ways to deal with the power of titleholders. More specifically, they need to understand how to activate specific public and private law instruments that do not always need to limit property owners’ rights, but also work with property rights. Such an active approach requires public intervention outside of a purely market-based investment logic. Besides the mere introduction of new policy instruments (e.g. quota for affordable housing), it involves the strategic activation of existing formal rules.

Moreover, Article 2 demonstrates that to legitimize such land acquisition strategy, broad political support, knowledge, as well as financial and personnel resources are needed. These are not always given, even in big and wealthy cities such as Zurich or Basel. Consequently, making densification more socially sensitive is a matter of the ability of municipal planning administrations to familiarize themselves with the entire range of existing intervention possibilities. The strengthening of more social measures must be given more weight in the planning process, and should be considered and included more actively into formal decision-making processes (for details see Sect. 7.1).

SQ3: How does the implementation of densification objectives impact social sustainable housing outcomes?

Key empirical finding 5: The Business of Densification—the basic human need for shelter is being neglected in favor of economic-environmental (“Eco-Business”) functions of housing estates

The final assumption made in hypothesis 5 can be confirmed: results of all four articles show that even though densification has been introduced as a legally binding policy objective in order to promote sustainable settlement development effectively, its implementation process is far from socially sustainable in the sampled Swiss cases. In the Swiss context, densification objectives are implemented in a way that neglects the social pillar of sustainability in favor of economic (profit) and environmental (energy efficiency) dimensions. Consolidation is promoted as an “Eco-Business” by coupling urban competitiveness with ecologic viability goals, while neglecting social aspects such as housing affordability, -availability, or tenants’ inclusion into formal decision-making. More precisely:

Results of Articles 1 to 4 reveal that densification—as a key objective of Swiss planning policy—only gets implemented if private titleholders agree to obtain new development. To convince owners to participate in densification policy efforts, public authorities agree to the development terms and conditions dictated by the landowners. Because public planning administrations cannot trigger densification objectives alone. They are reluctant to intervene against property owners using measures that directly influence the land rent (e.g. stricter zoning) because they fear strong resistance. Therefore, planning authorities implement densification according to the landowners’ profitability terms rather than not being able to promote consolidation goals at all. Otherwise, they would risk that densification as key element of environmentally sustainable settlement transformation might slow down—or even come to a standstill—if property owners refuse its implementation.

Under the flag of “sustainable urban development”, this results in consolidation implemented in the form of “green gentrification” (Budd et al., 2008: 266), which couples ecologic modernization (energy efficiency) with densification goals, but at the expense of a city’s social qualities. The policy shift towards densification enables owners to (re)develop existing real estate through the construction of more and newly renovated apartments at the same location (key finding 2). They can increase rent revenue steadily and substantially. Moreover, even though public authorities would be the ones responsible for counteracting trends of gentrification through targeted government intervention, results of Articles 2 to 4 show that the political instrumentalization of the compact city is a very real possibility for municipalities.

Indeed, public authorities use the compact city as a cover to push forward policies and interventions that have goals other than social stability. For example, energy efficiency or climate adaption objectives. Since the compact city model fits into very different political agendas, this increases the possibility that it is used instrumentally. Densification enables governments to grow, attract, and accommodate new (potentially higher-income) residents. Hence, authorities try to justify the (re) development of old housing stocks with the need to produce increased net financial capacity for managing urban growth. In the city of Zurich, for example, municipal planning authorities define planning documents that facilitate the (re)construction of housing stocks as they are interested in attracting wealthy taxpayers in order to increase tax revenue (Articles 2 to 4). Public authorities (on behalf of local executive and legislative committees) entail an economistic perspective—yet one often integrated with ecological discourse—by highlighting the financial cost of sprawl and by mobilizing arguments in favor of dense and compact cities. Such arguments include, for instance, a reduction of transaction costs through spatial proximity, which subsequently may lead to increased urban livability.

Consequently, more than ever before, public actors incorporate gentrification into densification policy objectives—used either as a justification to obey market forces and private sector entrepreneurialism, or as a tool to direct market processes in the hopes of reorganizing urban landscapes in a more benevolent fashion. Swiss public authorities (particularly planning administrations) seem to regard gentrification as one of the social costs of economic success or ecologic renovation that is worth tolerating. To do so—in the sampled Swiss cases—they argue that failure to allow new private buildings will create definite and severe impediment to economic growth or climate protection. In Articles 2 and 3, for instance, municipal authorities legitimize their actions with the argument that the impact of doing nothing for economic or environmental sustainability would be devastating. Primarily, because “doing nothing” could potentially create additional pressure for production, jobs, and residents to move out of the city, which could foster urban decline. Terms like “partnerships”, “participation”, “collaboration”, or “sustainability” are used instrumentally to reinforce the power of the central state or to presage the hegemony of property owners’ lobbies.

While the displacement of lower income encouraged in the course of implementing densification programs is generally made a taboo, the furthering of participation and articulation options for desired groups and newcomers is widely discussed and politically promoted. However, such an urban development strategy is far from the original aims of the compact city and considered highly unsustainable as it supports social displacement and eviction of residents. In the Swiss context, results of the four articles show that implementing densification goals not only leaves the very housing situation of the lowest-income groups at risk but also that of the middle class. Through consolidation and upgrading, affordable housing units are demolished and rebuilt with higher densities but also with the consequence of higher rents. Findings reveal that social ties in neighborhoods are being disrupted at short notice because evicted tenants cannot afford rental prices on the free market after contract termination anymore. Social aspects such as housing affordability, housing availability, or tenants’ access to decision-making are bypassed during the process of upgrading. Social qualities that are a city’s basis of community-based initiatives and solidarity-creating capacities are jeopardized, which leads to social exclusion, gentrification, and -polarization of lower income (particularly old-aged), but also middle class. In Swiss cities, this results in a way of implementing densification goals that is highly unattainable, especially regarding its socioeconomic consequences for the residents.

6.2 Intermediate Summary

In summary, results so far show that the conditions for socially sustainable housing development in Swiss cities have changed in recent years due to a situation of urban land scarcity. The shift towards densification has strongly influenced actors’ use interests in housing and the way they activate the regulatory institutional regime in force. At the local level, coordination among competing housing uses may be improved through mutual adjustment of institutions (stronger protection of tenants’ rights, see key finding 1) or strategic capacity building of municipal planners (through active land policy, see key finding 4). However, results show that coordination in favor of socially sustainable densification is often impeded by the following:

  1. 1.

    Key empirical finding 1: the enacted federal regulations and policy instruments hinder the reduction of rent levels throughout all institutional levels (also cantonal and municipal). Findings show that the Swiss institutional regime is characterized by strong institutional fragmentation—characterized by contradictions not only between public policies (e.g. energy, planning, social welfare), but also between public policies and property rights (that are strongly protected in Switzerland). This failure in introducing more socially inclusive policy measures (e.g. quota for affordable housing, stricter tenure protection in case of modernization) is triggered by a general policy shift towards the promotion of renewable energy production regardless of its social costs (“Eco-Business”);

  2. 2.

    Key empirical finding 2: the owner-actors’ ability to strategically resist against public densification or against tenants’ NIMBY-efforts through strategic rule activation (of property rights) or rule formulation (less tenure security). Moreover, owner-actors unite their forces and policy resources (e.g. through networks, capital, knowledge, or law) in order to prevent a backdrop of an overarching rule that could potentially lead to more social requirements in densification projects; and

  3. 3.

    Key empirical finding 3: the residents and tenants’ activist groups weak legal standing in front of powerful landowners. They often fail to anchor their concerns in political documents and legislation in a targeted manner. Legislative changes in favor of stronger tenants’ protection can only be amended in unique “windows of opportunity” (e.g. in times of severe housing crises) in which tenants experience broad public and political support.

  4. 4.

    Key empirical finding 4: a lack of knowledge, financial capacity, and personnel of public planning administrations (at the federal and municipal level) to resist against owners’ interests and to strategically activate existing or introduce new formal rules to prevent social exclusion. Enforcing a change in the institutional setting may help tenants and public actors to reduce the rival housing uses and to boost more accurately social sustainability objectives in housing.

Chapter 7 closes with the findings answering the main research question.