Swiss Housing Crisis: Why Tightening Lex Koller Won’t Help

Swiss policymakers face mounting criticism over proposed tightening of the Lex Koller law, with economists and industry leaders warning the measure will fail to address the country’s deepening housing shortage and may worsen market conditions.

The debate intensified after Beat Jans, head of Switzerland’s Federal Department of Justice and Police, presented plans to ease housing pressures through targeted reforms. However, the proposals were swiftly condemned by financial experts, who labeled them ineffective and politically motivated.

Thomas Gitzel, chief economist at Raiffeisen Switzerland, delivered a particularly sharp critique, calling Jans’ approach “completely inadequate,” a “smoke bomb,” and “an audacity” in an interview with Die Weltwoche. He argued that the planned measures ignore core market dynamics and risk distorting investment incentives without increasing supply.

Similar concerns emerged from other financial commentators. A report in Cash quoted Gitzel directly opposing any strengthening of Lex Koller, stating that such restrictions on foreign property ownership would not alleviate housing pressures and could instead reduce available rental stock by discouraging investment in new developments.

The Lex Koller framework, which limits non-Swiss buyers’ access to real estate, is under review by the Federal Council, which signaled its intent to tighten the rules further. According to the Tages-Anzeiger, this move has drawn sharp rebuke from property owners’ associations, particularly Heimatschutz Schweiz, whose president, Thomas Bergler, denounced the plan as counterproductive and ideologically driven.

Analysis from the Neue Zürcher Zeitung reinforced the skepticism, explaining that Switzerland’s housing crisis stems primarily from domestic factors — including restrictive zoning laws, lengthy approval processes and high construction costs — rather than foreign demand. The paper concluded that altering Lex Koller would treat a symptom while ignoring the structural causes of scarcity.

SRF echoed this view in a separate report, stating that a strengthened Lex Koller would “solve no problems” on the housing market and warning that politicizing the issue risks diverting attention from needed reforms in planning law and construction efficiency.

Despite the criticism, federal authorities maintain that tightening Lex Koller is necessary to prevent speculative buying in high-demand areas, particularly alpine regions and urban centers. They argue that uncontrolled foreign investment could exacerbate price pressures in localized markets, even if it is not the primary driver of nationwide shortages.

As of mid-April 2026, no final decision has been made on the proposed changes. The Federal Council continues to review feedback from cantons, industry groups, and economic experts, with a potential ordinance expected later in the year. Meanwhile, housing affordability remains a pressing concern, with median rents in Zurich and Geneva rising over 8% year-on-year according to Swiss Federal Statistical Office data released in March.