The planning and development of settlements and landscapes, commonly referred to as spatial planning, is a key element of political strategy in Switzerland. It serves to balance competing interests across environmental protection, economic development, transportation, and demographic needs. But who decides how much land may be built upon and where?
This article outlines core aspects of Swiss spatial planning, highlighting the strict regulations governing the allocation of construction land. It also examines the respective roles of the federal government, cantons, and municipalities in shaping settlement development and controlling the designation of new building zones.
What does spatial planning include?
Spatial planning provides the framework for the orderly development of settlements and landscapes. Its goal is to harmonise the interests of the environment, economy, transport, and society.
Due to Switzerland’s federal structure and direct democracy, spatial planning law, systems, and instruments are shaped by a wide range of actors. The federal government sets out the overarching objectives, which are then specified and implemented by the cantons and municipalities. As a result, planning practices may vary from one municipality to another.
Spatial planning is not a new concept. As early as Roman times, rules were applied to regulate the use of settlement areas. In Switzerland, a popular vote in 1969 granted the federal government authority over spatial planning. Further legislation followed, such as the 2012 Second Home Initiative (in force since 2015 – SR 2015 5657), and the 2013 revision of the Spatial Planning Act, which aims to curb urban sprawl and promote inward settlement development.
Roles of the Federal Government, cantons, and municipalities
Spatial planning is a joint task of the federal government, cantons, and municipalities. To meet the different needs of individual regions and support federalism, the actors limit themselves to the following tasks:
The federal government limits its legislative role to setting out principles. It promotes and coordinates the spatial planning activities of the cantons.
The cantons are responsible for developing and implementing spatial planning. They delegate parts of this responsibility to the municipalities. The cantons’ key planning instrument is the cantonal structure plan, which must be approved by the Federal Council.
The municipalities distinguish between building and non-building zones (e.g. agricultural zones, protected areas) and define the type and extent of permitted construction within building zones.
Where can construction take place and how much am I allowed to build?
To meet these objectives, every municipality in Switzerland has a zoning plan aligned with the broader strategic goals set by the canton and the federal government. This plan precisely defines where different types of land use - such as housing, commercial activities, industry, and agricultureare - permitted or prohibited, and to what extent development may occur.
In addition, local building regulations stipulate the specific conditions for construction on individual properties, including permissible building volume, height restrictions, required setbacks, maximum density, and approved uses. For example, residential construction is generally not allowed in industrial zones, and outside designated building areas, only agricultural structures may be erected.
Furthermore, municipalities may introduce special provisions tailored to local needs, such as permissions for resource extraction, ski facilities, or protected core zones in rural or natural areas.
Can municipalities or cantons rezone more properties as building zones?
Despite strong demand for housing, cantons cannot freely expand building zones. Since the revision of the Spatial Planning Act in 2013, approved by public vote, federal legislation (SR 700, Art. 15) strictly limits building zones to no more than 15 years’ projected demand for residential and economic development. This means that new construction areas must align with realistic population and employment growth forecasts over the medium term.
The primary aim is to prevent low-density suburban sprawl - scattered developments with few inhabitants spread over large areas - which lead to disproportionately high infrastructure costs. Distant settlements require extensive investment in roads, utilities, water supply, and sewage systems, as well as costly protective measures against natural hazards such as floods, avalanches, or landslides. These expenses are often difficult to justify economically or environmentally compared to compact, efficient urban development.
As a result, future growth is increasingly directed towards already-developed areas. Over time, this translates into upzoning in dense urban centres - allowing higher density construction - and downzoning in peripheral or sensitive regions. Any newly designated or intensified building zones are typically subject to value-added tax (VAT), ensuring that developers contribute toward the cost of necessary infrastructure upgrades.
Is downzoning of properties possible?
The need for downzoning of building land across Switzerland is becoming increasingly evident, for example, in the canton of Valais, almost 10% of all building land (about 1 200 hectares) is expected to be downzoned. Similarly, large parts of the cantons of Graubünden, Ticino, and Glarus face a high risk of downzoning of building land. Additionally, several municipalities with oversized building zones are located in peripheral alpine regions and the Jura arc.
These areas have large building zone reserves, while projected population growth in the coming years is not as high or too much building land was zoned in the past.
Note: According to the latest Federal Court ruling (November 2024), compensation is often not expected for building land far removed from developed settlement areas that is being downzoned. Existing properties are protected under preservation law and can be preserves regardless of if construction right might be striped. This judgment puts landowners under pressure. From their perspective, it is advisable to monitor the cantonal master plan and municipal land use planning and consider timely development or sale if there is a high risk of down-zoning.
What happens to underutilized properties?
Unused building zones in Switzerland hold significant untapped potential—enough space, in theory, to accommodate between 0.9 and 1.6 million additional residents. A significant portion of this is located on underutilized properties.
When calculating future building land requirements, the area consumption per capita is compared among the respective municipalities. This allows the current density of a municipality to be estimated. If consumption is below the average, underutilization can be assumed. This increases pressure on municipalities and makes further zoning more difficult.
In future a building permit may be denied if it leads to underutilization. But at the same time owners of underutilized properties cannot be forced to increase utilization. However, downzoning of an underutilized property is possible, but the use of the existing building size remains permissible (preservation).
For this reason, owners should be aware whether their property currently utilizes its maximum allowable potential or not. There may be utilization reserves on the property that can be used through expansion, renovation, or new construction. Building land reserves are often found in small-scale single-family house developments where higher density has been approved over time or never fully utilized. Existing setback distances usually only allow densification if owners and neighbours cooperate, agree on mutual right-of-build allowances, or work together on a project.
Bank Julius Baer & Co. Ltd.
Karl Waldvogel, serves as Head of Direct Real Estate Advisory at Bank Julius Baer & Co. Ltd., where he provides strategic advice to clients on direct real estate investments. His expertise encompasses both individual property acquisitions and comprehensive portfolio strategies He holds a Master of Arts in Architecture (ZFH) and an MAS in Real Estate (UZH CUREM).