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Zurich residents take on real estate investors to keep their homes

Brunaupark from the air, with Credit Suisse’s Uetlihof building on the right (Keystone)

In a modest Zurich neighbourhood, long-time residents of a sprawling apartment complex will lose their homes if a planned renewal project backed by a pension fund goes ahead. Similar projects are happening across Switzerland as funds invest heavily in real estate amid low interest rates.

Fifteen minutes from Zurich’s main station by tram, the Brunaupark lies in the southwest of the city between the Uetliberg mountain and the lake. Set back from the street behind a small shopping centre, the cluster of five apartment blocks built between 1980 and 1996 currently houses a community of some 700 people in 405 units.

The first thing to strike the visitor is a cluster of tall white poles sticking up from the most unlikely places all over the site. These poles, in keeping with Swiss planning law, mark the height and location of the new buildings the owner – the Pension Fund of Credit Suisse – has planned for the development.

In the last week of March, the local postman had a heavy load. Through a property management company, the owner sent notices to more than 200 households at Brunaupark that their rental contracts were being terminated. The plan is to demolish four of the five buildings in phases, losing 240 apartments, and to rebuild higher and closer to the street, making room for 500 new units at a significantly higher rent.

Tenants of Brunaupark have organised themselves to fight the building plans through a petition and legal challenges.

The case has become a public relations headache for Credit Suisse, Switzerland’s second-largest bank. It looked particularly bad for the bank when the United Nations special rapporteur on the right to housing, Leilani Farha, visited Brunaupark in June to show her support for tenants.

But the Pension Fund of Credit Suisse insists it is being a responsible landlord, having given tenants more than a year’s notice of the termination of their rental contracts.

It’s not the only pension fund investing in real estate. Because the demand for living space in Swiss cities far exceeds supply, real estate is considered a safe and lucrative investment where there is little money to be made in traditional bonds because of Switzerland’s low interest rates – currently the lowest in the world. The low rates also make renovations cheap. All of this in turn leads to ever-increasing real estate prices.

One couple in their seventies who received the letter that day is particularly attached to Brunaupark. Willy and Bianca Küng live in a four-room apartment on the top floor where they have a fine view of the old town in one direction and the Alps to the south. The building is slated for demolition in June 2020.

Two of their sons live in the same block of apartments and a third son lives in one of the other blocks facing demolition. Bianca looks after her four grandchildren three days a week.

“It’s a kind of village here. We have a good neighbourhood for families and children. Everything we need for life is here,” Willy Küng says.

Gesturing to his cosy living room, he continues: “It doesn’t make sense to tear down perfectly good buildings and replace them. They want a clean slate but we’re determined to fight.”

Together with the tenants’ association, he and his wife are pursuing every avenue to block the project so the residents can stay where they are.

‘We might move’

The Küngs moved into the new block in 1982. “From the very beginning I was sure we would stay here. This place was considered a model urban development,” he adds.

Brunau residents have found something that can be elusive in a city – community life – and they dread losing that. The amenities are also excellent, with direct access to the green space of Uetliberg for walking, jogging and cycling.

Older people especially appreciate having a supermarket with a restaurant on the doorstep, a pharmacy, hairdresser and medical centre. Young families have the benefit of a day care centre, a kindergarten and plenty of safe space for their children to play. The Orthodox Jewish residents are within walking distance of their synagogue.

Next door to the Küngs, through a different entrance in the same block, Elisabeth Sutter is also one of the original tenants. She lives with her husband in a ground-floor apartment with a small garden.

Though she would love to stay, she is less optimistic. “It’s tough living with this hanging over us all the time. If we can find somewhere we can afford we might move.”

Like the Küngs, the Sutters’ apartment was renovated in 2011. The kitchen, bathroom and windows are new. Elisabeth and her husband Paul have the apartment just the way they like it.

“People would like to stay but seven of the 17 apartments in our house are now empty. Two neighbours sadly died and five others moved away. They couldn’t take it. It’s very quiet around the building now.”

The tenants have organised themselves, setting up an association to defend their interests called Interest Group Living in Brunaupark. They collected 5,700 signatures for a petition which they submitted to the Zurich City Council in May.

There are now two main tracks of organised opposition against the plans of Credit Suisse Pension Fund: planning objections to the building project and challenges to the termination of rental contracts.

The campaign is at an early stage, but the tenants say they are willing to go all the way to the Federal Court on both fronts to save their homes.

‘My mind is in chaos’

Rent is another factor complicating the Brunaupark tenants’ dispute. The average monthly rent in the complex is reasonable for Zurich, in the range of CHF1,500 ($1,520) to CHF2,500. The new apartments will cost CHF2,500-CHF3,500.

The long-term tenants of Brunaupark have more to lose than their security. They also face the difficult transition from the position of long-term well-protected renters to new tenants competing in the significantly more expensive open market.

There is real anguish in this quiet Zurich neighbourhood, especially among older residents and those on low incomes. Credit Suisse Pension Fund’s offer to support tenants in their search for accommodation is scoffed at by people who are already on a tight budget.

One elderly woman was too embarrassed to show me her home because, she says, “since all this happened, my apartment is in chaos just like my mind is in chaos”.

Full story here
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