Sascha Ginesta, you have been dealing with the housing market in Graubünden for years. On March 11, 2012, the second-home initiative was adopted, what has happened since then?

Immediately after the adoption, we saw a real construction boom. Everything that was still possible was built. With increasing supply and at the same time moderate demand, vacancies increased from 2012 to 2018. Since 2018, however, we have seen the impact of the tightening of supply due to the ban on new construction of second homes. Demand also increased again and vacancies decreased continuously.

Now you read in many places of sharply rising prices and almost no offers. 

That is correct. With the corona pandemic, the development described has been further accelerated. Since the middle of 2020, demand has risen above average, and the already limited supply has become even tighter. This has an impact on the price development. 

What influence did the Secondary Residence Initiative or the Secondary Residence Act have on the construction of primary residences?

At the beginning, it was expected that this initiative would have a positive effect on the construction of first homes. The remaining building land can now only be used for primary residences. Unfortunately, this expectation did not materialize. 

Why not? 

Well, there are different reasons:
 

• Even before the second-home initiative, many municipalities had a first-home quota for new buildings. This means that first homes were automatically created along with the second homes. That has been eliminated.
• The existing building land became unavailable. The owners do not want to build on it and also do not want to sell it. This for different reasons. E.g., because it protects view and privacy or it serves as an investment. A building land hoarding takes place. 
• The revised cantonal spatial planning law forces the municipalities to reduce building land reserves. This prevents additional new construction projects for primary residences. 

With this, we can say that the law on second homes even has a negative impact on primary residences?

Yes, because the supply shortage described above and the price trend have also increased the pressure on properties that are currently used as primary residences but are considered secondary residences under old law. When such apartments are sold, a primary residence is practically always lost. In addition, the municipalities will no longer be able to compensate for the consequences of the Spatial Planning Act and the lack of available building land in the future. This means that despite increasing demand, also in the area of first homes, the supply cannot be increased here either. There is a housing shortage in all areas. This is a toxic mix. 

In many places, one senses a certain resignation in this situation. Do you see any possible solutions? 

There are definitely possible solutions. I see a solution triangle with fields of action and measures in which the municipalities and also the canton have a duty. 

What does your solution triangle look like?

It consists of three main areas of action: 

1. Housing subsidy

1.1. Promotion of construction of first homes
1.2. Mobilization of building land in own stock 

2. Measures for second homes

2.1. Interpretation of second home law
2.2. Local law on second homes 

3. Active spatial planning

3.1. Strategy for residential zones and overall revision of local planning and building law
3.2 Revision of cantonal data sheet for building zone requirements
3.3 Revision of cantonal spatial planning law

That already sounds very concrete. Can you already name possible measures for the individual fields of action? 

Yes with pleasure. The measures listed below are not exhaustive! It is best to start with the measures where the municipalities have a direct influence. 

1. Housing subsidy

For the promotion of housing, for example, a utilization bonus for primary residences could be considered, or financial incentives if someone converts his property into a permanent primary residence, or farm rights in case of overuse, if changes of use take place, e.g. from hotel or commercial properties to primary residences. 

To mobilize own building land is self-evident. The point is that the building land in the municipalities' own stock is efficiently used and overbuilt. Whether a municipality builds itself, contributes the building land to a housing cooperative or foundation, or sells it, is a matter for each municipality to decide individually. 

2. Measures for second homes

There is room for interpretation in the application of the law on second homes. Today, these are often interpreted generously for second home construction. The approval authorities could become stricter here and in case of doubt decide in favor of the first home construction. Art. 12 of the Secondary Residence Act gives the respective municipalities the possibility to take further local measures in case of undesirable developments. These could be, for example, the following: 
 

• Incentive tax for change of ownership
• Quotas for first homes in the case of conversion and new construction
• Restriction of extensions
• Restriction on the expansion of buildings worthy of protection
• Restriction of cross-financing of hotels
• Restriction of managed apartments

These measures do not necessarily have to apply to the entire municipality. They can also be applied only to the area designated for primary residences. Whether and which measures and to what extent they are applied must be decided individually by each municipality on the basis of its own starting position. It seems important to me not to choose measures that are too extreme, but rather a well-coordinated mix. It must not lead to market regulation, but should provide the necessary guidelines for future location development. 

3. Active spatial planning

Municipalities need a clear strategy for their residential zones. For whom do they want to create housing and what are their needs? In short, where to build what for whom. On this basis, the building zones in the corresponding areas are to be defined and designed via the building law by means of utilization, building heights, etc. The building zones are to be defined by the municipalities. Rezoning of building land from unattractive residential areas to more attractive ones can also play a role. Another effective means of revising the building law is to make it compulsory to build on vacant building land parcels, which would help prevent the hoarding of building land.  

And now to the two sub-areas of action in which the canton is challenged and the newly formed Grand Council and the government must also act urgently. In the short term, the data sheet for the survey of building zone requirements must be revised. A number of mistakes were made in its preparation. For example, it refers entirely to the past. However, future prospects should also be included in a forecast. The first drafts were based on a faulty data basis, and in the tourist municipalities the first/second home issue was disregarded. The new councillors would do well to address this issue quickly. In this way, the municipalities could regain their perspectives and room for maneuver in spatial planning. In the medium term, however, the cantonal spatial planning law will probably have to be revised at the national level. This law is too uniform and does not sufficiently take into account the different situations in the various regions. Spatial planning in Maienfeld, Trun or Vaz/Obervaz could not be more different; we do not even want to attempt a comparison with Zurich or the Jura. 

The ball is obviously in the politicians' court?

Exactly. The municipalities can initiate and implement certain, more short-term measures. For the medium-term development perspective, however, the canton with the Spatial Planning Act will necessarily be called upon. Only with sufficient building land can the communities develop. This must become a permanent topic in the Grand Council, and the pressure on the government from the affected regions must increase. 

Thank you very much, Sascha Ginesta, for this exciting interview. 

Sascha Ginesta (real estate appraiser with federal diploma) is 
Head of brokerage Graubünden and Partner at Ginesta Immobilien AG