Where Switzerland Really Has Room to Build New Housing

In 2014, Switzerland enacted a new federal spatial planning law aimed at curbing urban sprawl. The strategy had two pillars: tighter restrictions on new building zones and a push for cantons and municipalities to encourage denser development within existing settlements.

The restrictions largely worked: Between 2017 and 2022, the total area zoned for development barely expanded. The results of these densification efforts, however, have been mixed. Population density has increased almost everywhere, but in many places the process remains far too slow.

The reasons are well known: complicated building and zoning regulations, lengthy permitting procedures and extensive opportunities for legal appeals. More often than not, it is local residents themselves who block denser development, fearing construction noise, the loss of views or changes to neighborhood character. The combination of limited rezoning and insufficient densification has slowed the growth of the housing supply. The result has been falling vacancy rates and rising property prices and rents.

Where does denser development actually make sense? A study conducted by the research institute Sotomo on behalf of Urbanistica, a Swiss association promoting urban development, offers some interesting insights. The researchers assessed every neighborhood in Switzerland, calculating an “optimal” level of density and comparing it with actual land use density. The benchmark depended primarily on how centrally connected a neighborhood was within the transportation network. The gap between actual and targeted density was defined as the area’s densification potential.

The results were striking. Sotomo identified significant densification potential in only about 30% of Switzerland’s settled land area. In just 8% of settlement areas did the target density exceed current density by at least 20%.

The greatest potential was found in larger cities, followed by smaller cities and suburban agglomerations. Yet the relatively modest share of land with development potential masks the enormous housing gains that could still be achieved. Closing just 35% of the identified density gap, the study estimates, would create room for an additional one million residents and 550,000 jobs.

The Greatest Potential Lies Around Zurich, Geneva and Lausanne

To make comparisons between municipalities possible, Sotomo aggregated its neighborhood-level analysis to the municipal level. The results show that the 100 municipalities with the greatest densification potential are overwhelmingly located in suburban belts around major urban centers.

Of the top 25 municipalities, 23 are located in metropolitan agglomerations. The Zurich region appears most frequently, with seven municipalities in the top 25. In fact, the top three spots all belong to Zurich-area municipalities: Schwerzenbach, Opfikon and Killwangen. The Geneva and Lausanne metropolitan regions each account for six municipalities in the top 25, followed by Basel with two, and Bern and Lugano with one each.

The remaining two spots in the top 25 belong to larger cities themselves: Bern, ranked 10th, and Zurich, ranked 18th. Eight additional larger cities – including Lausanne, Aarau, Lucerne, Zug, Geneva, Biel, St. Gallen and Basel – also appear among the top 100. Of Switzerland’s ten largest cities, only Lugano, ranked 326th, shows little meaningful densification potential.

Is the Definition of “Centrality” Distorting the Results?

The municipal rankings should not obscure the fact that Sotomo’s analysis operates at a much finer geographic scale. That is both important and appropriate. The real policy challenges do not arise at the level of entire municipalities, but within individual settlements and neighborhoods.

Still, the neighborhood-level methodology raises an important question: how “centrality” is to be defined. Sotomo considers only access to public transportation, arguing that it represents “a sustainable, space-efficient and future-oriented form of mobility.”

That assumption is debatable. For one thing, it implicitly suggests that private automobile transportation cannot be sustainable or future-oriented. Yet the growing electrification and automation of private mobility already complicate that view. Roads also compare more favorably on land use efficiency than is often assumed. Swiss highways, for example, carry an average of 8.6 passenger-kilometers annually per square meter of land used, compared with just 3.6 on rail lines.

More fundamentally, it is difficult to ignore that 77% of motorized passenger traffic in Switzerland still takes place via private transportation rather than public transit. Measuring centrality solely through access to public transportation therefore provides an incomplete picture.

There are many places that are exceptionally well connected for car travel while offering only moderate public transit access. One example in the Zurich region is Affoltern am Albis along the A3 highway. One could argue that accommodating more residents there is undesirable because the highway into Zurich is already heavily congested. But the same argument can be made for public transportation systems in major metropolitan regions. More broadly, the Sotomo study largely sidesteps the question of transportation capacity altogether.

Jobs and Housing: Are The Suburbs Really Undersupplied?

Another aspect of the study deserves closer scrutiny: the proposed balance between housing and employment. Sotomo defines an “ideal” mix as a ratio of two residents for every full-time job, reflecting the Swiss national average. Under that logic, future job growth should occur primarily in suburban belts rather than in cities themselves.

The study argues that “the strong concentration of jobs in urban cores forces hundreds of thousands of people to commute” and that a more balanced distribution of jobs between cities and suburbs would shorten commuting distances.

But this conclusion oversimplifies the realities of a highly specialized modern economy. The high concentration of jobs in cities is less the result of planning failures than the natural outcome of economic specialization and division of labor. The assumption that relocating jobs from city centers to the suburbs would reduce commuting depends, first, on workers and employers being able to match efficiently at the local level. Given today’s highly specialized labor markets, that is increasingly unlikely.

Second, commuting is not the only type of travel that matters within labor markets. Knowledge-intensive industries in particular benefit from geographic proximity because it reduces search costs, coordination frictions, meeting times and networking barriers. That is precisely why jobs tend to cluster in major urban centers with large catchment areas: concentration minimizes travel distances for the greatest number of people overall.

Moving jobs into peripheral areas without corresponding local alignment between residents and employers would likely produce the opposite effect – more cross-commuting between suburban regions rather than shorter trips. Commutes would become longer, not shorter.

Even with these caveats regarding transportation and land-use assumptions, the Sotomo study provides a valuable framework for understanding where densification in Switzerland makes sense – and where it probably does not.