Cooperative living: the middle ground between owning and renting

For many people, finding an affordable rental property in mostly expensive cities and urban areas is becoming increasingly difficult. As a result, there is greater focus on properties belonging to cooperatives and charitable foundations. In particularly expensive urban areas, these can often be 20–25% cheaper.

In Switzerland, there is a total of around 185,000 properties in the most affordable segment. The rental prices for these properties are generally significantly lower than the standard market level. A four-room flat of this kind in Zurich might cost as little as CHF 1,700, as opposed to CHF 2,100 or more. Cooperatives and foundations are committed to social principles. Having non-profit status means, for example, that they do not make money, they do not speculate with property, and they comply with the principle of cost rent. Each individual property costs exactly the amount required for the mortgage, maintenance, repairs and provisions. Properties belonging to cooperatives are often also cheaper because the land was purchased 40 or 50 years ago, when prices were much lower.

A barely maintained market share

As a prospective tenant, you may be keen to know how many properties are owned by cooperatives. The answer and precise percentages depend on whether we are looking at the proportion of rental properties alone or the total property stock (including properties intended for private ownership). Of the total number of rental properties, about 8.3% belong to cooperatives. If we look at the numbers in terms of new construction activity, the annual proportion of properties built by cooperatives ranges from 2–4.5%. ‘Non-profit housing is barely able to maintain its market share of almost 5%,’ says a representative of the umbrella organisation Wohnbaugenossenschaften Schweiz (Cooperative Housing Switzerland).

Geographically, the distribution of cooperative and non-profit housing varies. The city of Zurich has been a hotspot for many years. Here, the proportion of properties owned by cooperatives, charitable foundations and municipal housing is about 20%, with about 10% for the canton of Zurich as a whole. Only the cantons of Lucerne and Basel-Stadt have similarly high figures. In many other regions of Switzerland, housing cooperatives are very under-represented.

This is related to the fact that outside the major urban hubs, there is no real lack of affordable housing. Indeed, in many rural areas, and even on the outskirts of certain agglomerations, there is a housing surplus. Rents in these areas have stagnated and generally settled at reasonable rates. In rural areas, more specific housing offers are often available; for example, cooperative housing for people aged 65 and over.

The cantons of Neuchâtel, Geneva and Vaud are currently particularly active in the promotion of non-profit housing. Across the canton of Geneva, for example, specific areas have been designated for the purpose (‘zones de développement’). The types of property (chiefly rental properties, few for sale), rents and sale prices are controlled by the canton. This property policy has received widespread recognition in view of the notorious housing shortage in the canton. The properties in question are not available to all tenants, however.

As a rule, only certain households are eligible for the discounted properties; in particular, limits apply in terms of income and assets. The same principle applies to subsidised housing in the canton of Zurich, although the proportion of subsidised housing as a total of the cooperative portfolio is low. It generally makes up just 5–10% of the properties, which are rented out according to social principles and subject to strict checks (e.g. tax returns, disclosure of income).

So who wins the rental lottery?

For properties that are not publicly funded and thus controlled, renting lies entirely in the hands of the cooperative (unsubsidised housing). ‘We put great emphasis on having a mix of different tenants in our developments,’ says a representative of a large Zurich-based housing cooperative. For example, when older buildings are demolished and replaced with new ones, both internal and external applicants are given the opportunity to apply. Some of the properties are then publicly advertised on real estate platforms, among other places. The mix of tenants is intended to reflect the average mix in the city of Zurich in terms of household structure, income, nationality and number of occupants per property.

How does one go about finding an affordable cooperative-owned property? It is often a good idea to gain a bit of knowledge in advance. We recommend finding out which cooperatives are active and starting new projects in your city or municipality. A proportion of their housing will be publicly advertised; however, it is often still worth enquiring directly with the management. Some industry associations and umbrella organisations in the non-profit housing sector provide detailed information and even maps showing cooperatives in the region. When it comes to acquiring a cooperative-owned property, you will need to plan ahead and have a bit of luck:

  • Find out which cooperatives are building new housing or carrying out renovations.
  • Find out the criteria for housing applicants (household structure, number of people, income, age, etc.).
  • Read all the requirements carefully and only apply for opportunities for which you qualify.
  • State your motivation persuasively (social engagement, interest in the cooperative concept, etc.).

Proactive people in demand!

An important criterion in the allocation of housing is a willingness to get involved in the cooperative, the building and the development. Are you keen to engage with and actively contribute to your living environment? There are a range of opportunities on offer, such as participation on a development committee, in local support groups, working groups or on the board of the cooperative. Most housing cooperatives and other social housing providers promote a lively community within their development, including various leisure activities, volunteering, kids’ groups, events and social support services.

Cooperatives from a legal perspective

Housing cooperatives see themselves as an ‘alternative route’ in the world of housing. They offer a blend of property rental and ownership. Anyone who joins a cooperative must participate in the cooperative’s capital. Specifically, a share certificate capital of a few thousand francs is usually required. For new cooperatives that are only just getting off the ground, the capital requirement is often even higher.

This sum should not be confused with the security deposit for a standard rental lease. The share certificate does not represent a cooperative member’s participation in the ownership of an individual property (as with shared ownership, such as condominium ownership). Through the share certificate, members become shareholders in the cooperative as a whole. In return, they receive certain rights, including the privilege of obtaining a property within the cooperative if this becomes possible. As a member of a cooperative, you also gain democratic voting rights, meaning you have the opportunity to vote on important projects and the budget, and have a say in the composition of the board of directors and other important issues at the general meeting. Members are also able to put forward their own proposals.

Starting a cooperative

By law, cooperatives are, in principle, open to new members. Anyone who believes in the concept and has enough initiative and idealism can also start their own cooperative. This route gives founders a range of opportunities to implement their own projects and establish the culture of the cooperative as they desire. Authorities and umbrella organisations provide various services, advice and financial support. An increasing number of cities and municipalities are promoting cooperative housing. In the Lausanne area, for example, there is political support for expanding this segment significantly over the coming years.


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