Zurich’s city council wants to use an expected book gain of 2.5 billion francs from revaluing city-owned properties to keep rents affordable in municipal and other non-profit housing over the long term. The gain is entered in the 2027 budget and turns a planned deficit into a surplus. The package is meant to help secure more homes for the city’s one-third target by 2050 without adding to its debt.
Where the gain comes from
Cantonal law requires municipalities to revalue the properties in their financial assets every four years, and Zurich will carry out the next revaluation in January 2027. Because the cantonal tax land values have been adjusted for the first time since 2009 and land and property prices keep rising, the city expects a gain of 2.5 billion francs. The actual result will only be known in spring 2027 and may differ from the budgeted amount. The higher balance-sheet value brings neither additional revenue nor additional liquidity and has no effect on the city’s rising debt.
What the council proposes
The council plans to submit three proposals to the municipal parliament, with the final decision going to voters:
- Housing fund: a new contribution of 800 million francs, of which 750 million is in addition to the 50 million already budgeted, used for investment contributions that keep cost rents low in municipal and non-profit housing.
- Framework credit: 1.75 billion francs to transfer properties more quickly from financial to administrative assets for non-profit housing, with powers delegated to the city council; the amount depends on the actual gain.
- Ground leases: an amendment to the municipal code so the council can grant building rights to private non-profit developers and foundations on reduced terms.
The budget figures
| Item | Amount |
|---|---|
| Net result before the amendments | –407 million francs |
| Improvement from the amendments | +1.75 billion francs |
| Net result after the amendments | +1.34 billion francs |
| Budgeted cash flow | 335.3 million francs (unchanged) |
Background
The council presented the 2027 budget in September, with revenue of 11.398 billion francs and expenditure of 11.805 billion francs. It also announced a first housing package: the budget for property purchases into financial assets is reduced to 150 million francs. In return, the equity of the city foundations PWG and SEW is to rise by around 125 million francs, allowing them to trigger purchases of around 500 million francs over four years. Finance head Daniel Leupi described the new package as a sensible complement to that first package.