Construction permit delays in Switzerland: Between data divergences and impacts on the real estate market.

Introduction

In the complex field of Swiss real estate, obtaining building permits is a crucial process that directly influences the pace of urban development and market dynamics. Recently, a debate has arisen regarding divergent data published by SwissLife and the Geneva Department of Territory concerning the timeframes for obtaining these permits in the canton. This situation raises fundamental questions about data collection methodologies, result interpretation, and the perceptions of various market actors. By examining these divergences, we can uncover not only the challenges inherent to real estate sector regulation but also broader implications for economic actors and consumers.

I. Analysis of Contradictory Data

Recent data published by SwissLife and the Geneva Department of Territory reveal divergent perspectives on the timeframes for obtaining construction permits in Switzerland, particularly in the cantons of Geneva and Vaud. This contradiction raises questions about the reliability and objectivity of the collected data and how it is interpreted by different stakeholders.

1. Data Collection Methodologies

SwissLife, a major player in the insurance sector, collected its data by focusing on the median number of days between the application and the issuance of building permits for new residential constructions. This approach includes delays due to opposition and project modifications, thus providing an overall view of the delays encountered in the process.

In contrast, the data from the Geneva Department of Territory seems to be based on a different set of criteria. Their statistics, indicating reduced timeframes, may focus on specific cases, such as normal permits or expedited procedures, without necessarily accounting for delays due to opposition or project revisions.

2. Measurement Criteria

The primary source of divergence lies in the criteria used to measure timeframes. While SwissLife seems to consider the entire process, including obstacles and revisions, the Geneva Department's data may omit certain aspects that prolong the process. This difference raises important questions about what should be included in calculating timeframes for a more accurate and comprehensive representation.

3. Interpretation of Results

The interpretation of results can vary depending on the interests and perspectives of stakeholders. SwissLife, as an insurer, may have a more critical view of delays, given their impact on risks and costs. Conversely, the Geneva Department of Territory may present a more optimistic perspective, highlighting improvements and efficiencies in their processes.

4. Objectivity and Reliability of Sources

This divergence raises questions about the objectivity and reliability of sources. Do SwissLife's data reflect a more general reality of the market, or are they influenced by particular problematic cases? Similarly, are the statistics from the Geneva Department representative of all authorization processes, or do they reflect an idealized situation?

5. Impact on Market Actors' Perceptions

These data divergences influence the perceptions of different market actors. Real estate developers, investors, and future property owners may feel more uncertain about the expected timeframes for their projects. This uncertainty can affect investment decisions, project planning, and even overall confidence in the efficiency of administrative processes in Switzerland.

II. Testimonies from Industry Stakeholders

Testimonies from the Swiss construction sector highlight the concrete challenges associated with delays in obtaining building permits. These delays go beyond statistics and have direct and tangible effects on projects, significantly influencing costs, completion times, and even the feasibility of real estate projects. The experiences of two local developers provide insights into the difficulties encountered.

1. Lausanne Case: Attic Conversion in Lausanne

• Project: The project involved converting attic space to create an additional 25 square meters of residential space in an old building in Lausanne.

• Approval Duration: The approval process took 25 months, a considerably long period for a relatively minor project.

• Bottlenecks: Most of this delay was attributed to administrative bottlenecks at the municipal level. This case illustrates how internal procedures and file management at the local level can significantly slow down the approval process, even for small-scale projects.

• Impact: The delay not only increased financial costs associated with prolonged project management but also delayed the availability of new residential spaces, potentially exacerbating the housing shortage in the region.

2. Chêne-Bougeries Construction: Two THPE Villas

• Project: The project involved the construction of two high-performance energy (THPE) villas in Chêne-Bougeries, with a land use coefficient of 0.3.

• Approval Duration: The expedited approval process took 13 months to complete, notably long for a process supposed to be expedited.

• Reasons for Delays: Much of this delay was due to accumulated delays at the Chêne-Bougeries municipality level. This case highlights potential divergences between cantonal development objectives and local municipal strategies, particularly regarding densification and environmental preservation.

• Consequences: The delay not only increased construction costs but also posed challenges in terms of planning and resource management, affecting overall efficiency and profitability.

3. Implications for Project Planning and Execution

These concrete examples demonstrate that delays in obtaining building permits have significant implications for the planning and execution of real estate projects. Developers and builders face increased uncertainty, which can lead to frequent project reassessments, cost increases, and, in some cases, decisions not to pursue certain projects. Moreover, these delays impact the overall real estate market, exacerbating issues such as housing shortages and rising prices, affecting not only sector players but also end consumers.

III. Impact on the Real Estate Market

Delays in obtaining building permits in Switzerland, particularly in key cantons such as Geneva and Vaud, have a significant impact on the real estate market. These delays go beyond administrative complications; they deeply influence the supply and demand for housing, property prices, and urban development trends.

1. Effect on Housing Supply and Demand

• Supply Restriction: Prolonged delays in obtaining building permits limit the supply of new housing units on the market. This is particularly problematic in densely populated regions like Geneva and Vaud, where housing demand is high.

• Demand Increase: With restricted supply and a growing population, demand for available housing intensifies, creating increased pressure on the existing real estate market.

2. Influence on Property Prices

• Price Increases: The combination of limited supply and increasing demand inevitably leads to rising property prices. This makes homeownership increasingly challenging for many residents, especially first-time buyers.

• Regional Variability: While this trend is general, the impact on prices can vary significantly from one region to another in Switzerland, depending on local market dynamics and specific construction policies.

3. Consequences for Urban Development Trends

• Urban Planning: Delays in building permits can affect the implementation of urban development plans. Projects aimed at densifying or revitalizing certain areas may be delayed, limiting cities' ability to adapt to changing resident needs.

• Sustainability: These delays can also hinder the development of sustainable and ecological real estate projects, crucial for meeting Switzerland's environmental goals.

4. Perspectives from Economic Experts

Economists and real estate market experts emphasize that delays in building permits have long-term economic repercussions. They can slow down economic growth by discouraging investments in the real estate sector and increasing costs for developers, ultimately affecting consumers.

5. Comparisons with Other Swiss Regions

Comparing the cantons of Geneva and Vaud with other regions of Switzerland reveals that administrative delays are not uniformly distributed across the country. Some regions, benefiting from more efficient processes, may have a more dynamic and accessible real estate market, while others, facing longer delays, struggle with housing shortages and rising costs.

IV. Environmental and Heritage Considerations

In Switzerland, addressing environmental and heritage issues is essential in the building permit issuance process. This section explores how these considerations influence permit issuance, with a focus on preserving green spaces, protecting architectural heritage, and balancing urban development and conservation.

1. Importance of Environmental Preservation

• Protection of Green Spaces: In Switzerland, preserving green spaces is a priority. Authorities often face the need to protect parks, forests, and other natural areas while meeting urban development needs. This challenge is evident in cases like Chêne-Bougeries, where opposition to tree felling illustrates the tension between development and conservation.

• Biodiversity and Sustainability: Preserving biodiversity and promoting sustainable development are also key factors. Construction projects often need to demonstrate their minimal impact on the local environment, which can lead to permit delays.

2. Protection of Architectural Heritage

• Architectural Conservation: Switzerland, with its rich architectural heritage, places great importance on protecting its built heritage. Construction projects in historical areas are meticulously reviewed to ensure they respect the aesthetics and integrity of existing structures.

• Urban Integration: New constructions often need to be designed to harmonize seamlessly with the existing urban landscape, especially in historic cities. This need for harmonization can complicate and extend the approval process.

3. Balancing Urban Development and Conservation

• Densification Challenges: Cantons like Geneva, aiming to densify to meet growing housing demand, must strike a delicate balance between development and the preservation of environmental and architectural features.

• Community Involvement: Public and stakeholder participation is crucial in this process. Residents and environmental and heritage advocacy groups play an active role in either challenging or supporting projects, thus influencing final decisions.

4. Specific Cases and Administrative Implications

• Chêne-Bougeries Example: In the case of construction projects in Chêne-Bougeries, the municipality's attachment to its tree heritage and opposition to tree felling resulted in significant delays. This demonstrates how environmental concerns can outweigh development needs, affecting permit issuance.

• Evaluation Processes: Administrative procedures must incorporate comprehensive environmental and heritage assessments, which can extend the time required to obtain a permit.

V. Perspectives and Possible Solutions

Faced with the challenges posed by building permit acquisition processes in Switzerland, it is essential to explore viable solutions that harmonize administrative efficiency with environmental and cultural imperatives. This section proposes strategies and future perspectives aimed at streamlining administrative processes while respecting environmental and cultural values.

1. Improved Coordination among Governance Levels

• Inter-Governmental Collaboration: Strengthen collaboration between cantonal, municipal, and federal governments to ensure consistency in construction policies and evaluation criteria. Such coordination can reduce overlaps and contradictions in approval processes.

• Dialogue Platforms: Create discussion forums among authorities, real estate developers, environmental and heritage advocates to anticipate and resolve issues before they hinder the approval process.

2. Adoption of Technologies to Simplify and Expedite Processes

• Digitalization of Procedures: Utilize digital technologies to dematerialize and automate permit procedures. This may include online submission of applications, real-time tracking of requests, and automation of certain verification steps.

• Simulation and Visualization Tools: Deploy simulation tools to assess the environmental and aesthetic impact of construction projects. This could help anticipate and resolve issues before application submission.

3. Proposals for Regulatory Reform

• Review of Standards and Regulations: Examine and, if necessary, revise existing regulations to ensure they are both rigorous and realistic. This could involve simplifying certain criteria or clarifying guidelines for applicants.

• Balancing Development and Conservation: Strive to achieve a balance in regulations that promotes urban development while preserving green spaces and architectural heritage. This may require more flexible guidelines for innovative sustainability and preservation projects.

4. Encouragement of Forward Planning

• Pre-impact Studies: Encourage developers to conduct environmental and heritage impact studies ahead of projects. This would allow for the identification and addressing of potential issues before application submission.

• Long-term Development Plans: Promote the creation of long-term urban development plans that integrate densification, sustainability, and conservation goals from the early stages of planning.

Conclusion

A comprehensive examination of the contradictory data provided by SwissLife and the Geneva Department of Territory sheds light on the complexities and nuances of building permit acquisition processes in Switzerland. It becomes evident that differences in data collection methodologies and measurement criteria can lead to varied and sometimes contradictory interpretations of actual timeframes. These divergences underscore the importance of objectivity and reliability in data collection and analysis, as well as the need for transparent communication to ensure clear and shared understanding among all market stakeholders. Ultimately, an accurate and balanced appreciation of this data is crucial for guiding policies, investments, and strategic decisions in the Swiss real estate sector.

Source: Immobilier.ch