Cross the bridge over the Arve from Geneva to Carouge and you enter another world. Behind are the swanky hotels, grand boulevards and sweeping lakeside views of what is arguably Switzerland’s most cosmopolitan city. Ahead is a grid of narrow streets, pretty pastel houses, popular restaurants and quaint shops – the “town within a town” of Carouge.
Traditionally home to seasonal workers and artisans, the area is now a magnet for middle-class househunters and most properties have long been gentrified, with modern apartments and flower-decked courtyards behind the unprepossessing walls. “People come here to eat and to relax [and] many then realise they’d like to stay,” says Jean-Pierre Aebi, the town’s jovial mayor.
But the problem for Carouge, as with all of Geneva’s established residential neighbourhoods, is that there is virtually nowhere for them to go. The city is in the midst of an unprecedented accommodation crisis. “Nationally the vacancy rate is 1 per cent, which is low enough,” says Charles Spierer, chief executive of CGi Immobilier, a leading property agent. “But in Geneva vacancies have fallen to 0.2 per cent. There’s nothing to rent and very little to buy. Even if you have SFr10m (£5.5m, $9m) or SFr20m, you’ll have difficulty finding something.”
Etienne Nagy, chief executive of Naef, one of the region’s biggest estate agencies, confirms the problem. “Geneva’s vacancy rate has dropped steadily over the past seven years. That means that from a stock of about 220,000 properties less than 400 are vacant at any one time.”
The shortage has many causes. The city of Geneva, which in turn comprises the bulk of the canton of the same name, is relatively small, with only about 180,000 people. But immigration has been rising. Although some newcomers are from elsewhere in Switzerland, most are from abroad. Many work for the 25 big international agencies, 200 non-governmental organisations and 150 permanent missions to the United Nations based in the city or for the many multinational companies, often American, that have regional headquarters in Switzerland. In total 5,000-6,000 people have been arriving annually, many of them relatively affluent – and all seeking homes.
Supply, meanwhile, has not kept pace. Thanks to a tight geographic position between France and the lake, which leaves little room for expansion; zoning that protects agricultural land; tough environmental rules; and strict Swiss laws giving opponents ample opportunity to block, or at least postpone, construction projects, there are now only about 1,500 new dwellings built in the city each year. “Geneva is very small,” Spierer says. “More than half the space is reserved for farming and that rises to 70 per cent if you include forests and the lake. [And] there are huge restrictions on building. Projects can take years to get off the ground.”
Not surprisingly, property values have climbed significantly faster than in the rest of Switzerland. “Prices have roughly doubled in the past 10 years, compared with an average 30 per cent elsewhere,” Nagy says.
Many residents have decamped to cheaper housing in France or in the neighbouring Swiss canton of Vaud but neither alternative is ideal given the commute times to Geneva’s offices.
Now, however, on 130 hectares of land between the city centre, Carouge and the neighbouring town of Lancy, Geneva is taking steps to ease the housing crisis. This year the cantonal parliament backed bold plans to redevelop the light industrial zone of Praille-Acacias-Vernets – or PAV for short – which is occupied by everything from car bodyshops to warehouses.
Under a master plan these businesses will be moved out and replaced by a mix of residential and commercial property providing 14,000 apartments and creating 15,000 jobs, says Mark Muller, the Geneva cantonal government member responsible for the project. “PAV is the biggest urban scheme seen in Geneva in the past 50 years,” he says. “If they manage to build PAV as planned today it will be the new economic centre of [the city]. It will be a new green downtown.”
Even by national standards the project is ambitious. Although precise costings do not exist, the residential element alone is expected to require investment of about SFr7bn, with a further SFr3bn for the commercial side. “There’s nothing much else like it in Europe. Lyons has a similar scheme but that’s all construction on unbuilt land,” Muller says.
Precise plans have yet to be drawn up. “We have a 20-year time horizon,” he explains. But some broad outlines have been defined. PAV will be divided into five zones, all of which will then have their own detailed planning projects.
For hard-pressed househunters, L’Etoile, a semi-circle of avenues radiating out from a central point to the west, appears most interesting, as the likely economic centre of the site. It will be anchored by nine tower blocks, in something roughly akin to Berlin’s Potsdamer Platz redevelopment. Each will have a maximum height of 177m – far higher than anything in Geneva today – and include offices, hotels and upscale apartments. In time PAV could be extended to include the vast railway sidings running along one end, with vague plans to transform at least part of the underused area of tracks into a vast urban park, although Muller says that is a long way off.
Inevitably, a scheme of such ambition has encountered political resistance. No one is fundamentally opposed, given shared awareness of Geneva’s urgent need for more housing but leftwing parties are worried PAV will be a rich man’s ghetto, with insufficient attention to the needs of lower-income residents and that the canton might be selling out public interests to property speculators.
The opponents argue the key remaining decision – reclassifying the area from industrial to residential use – should only be taken once a precise plot-by-plot plan has been created, rather than being based on the current broad outline. To delay matters they have been calling for referendums in two of the three localities involved, potentially holding up the vote on rezoning in the cantonal parliament by about six months.
“We had hoped to secure a decision in June. Now it looks like early next year,” Muller concedes. But he remains confident PAV will prevail, given the desperate need for accommodation in the city.
Persuading the occupants to move out is the other challenge. About 82 per cent of the site is publicly owned but many properties are on long-term leases and some renters might be reluctant to uproot – especially without an alternative. One proposal involves creating a new industrial zone by the airport, allowing far better transport links than at present. But the scheme has yet to take shape.
That means PAV’s private sector landowners are likely to move first. Firmenich, the family-owned scents and perfumes group that occupies one corner, is ready to up sticks and redevelop. The Swiss army, which has a large barracks in another corner, thinks likewise.
Aebi and his colleagues in Carouge are so enthusiastic about PAV they want to start work on their part immediately. Plans for a low-rise public services building on a small plot have been transformed into a 22-storey tower with offices and flats. Undeterred by the delay to formal rezoning, the council wants to submit the scheme as soon as possible. “We are very, very positive. We want Carouge to send a signal,” Aebi says.
Haig Simonian is the FT’s Switzerland correspondent
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Estate agencies
CGI Immobilier, tel: +41 22-809 0909, www.cgi.ch
Naef, tel: +41 22-839 3939, www.naef.ch
