In Switzerland, becoming an owner remains extremely difficult. Faced with high real estate prices, the DDP hybrid model allows you to purchase your home without becoming the owner of the land. Economically advantageous, it is however complex and still requires the payment of rent.
The distinct and permanent development right (DDP) is an older model that allows the owner of land to grant a buyer, usually a property developer, the right to build on that land while retaining his ownership.
This model was, for example, adopted by the Société Coopérative d’Habitation Lausanne (SCHL) when it was founded in 1920, in a context of housing shortages. The cooperative then built houses on land belonging to the City of Lausanne. He still pays rent to the municipality today.
In addition to CMHC, which acts as a giant in the sector, this system is preferred by many smaller resident cooperatives. To protect them, the law provides for a contract with a minimum duration of 30 years, which can reach up to 100 years.
The owners remain the main winners
Furthermore, just over a year ago, this model was extended in French-speaking Switzerland to DPI apartments (storey properties). This combination offers numerous advantages, especially in terms of costs, despite a very complex legal regime.
This system is designed in such a way that all actors benefit from it: those who dream of becoming owners can partially access it, for a fee that is generally lower than a rent; the bank does not run great risks, because it will negotiate an amortization of the mortgage debt in relation to the duration of the contract; and the seller will receive a commission.
But the big winners remain the owners, in this case the owner of the land. He receives an income set as a percentage of the value of his land, and this income is even adjusted for inflation. The land thus maintains its yield and, in the long term, even increases its value.
An advantageous “semi-ownership”?
Therefore, under certain conditions, this DDP model can be successful. This is especially true for cooperative housing and affordable PPE apartments. However, it is more difficult to request luxury accommodation, which requires the withdrawal of several hundred thousand francs.
This system is hybrid. The buyer is only a half owner and the landowner transfers his land while retaining his ownership. This model therefore guarantees him a long-term income, without having to bear the costs and administrative difficulties of housing.
With the explosion in real estate prices, this solution could catch on among new generations of potential buyers. Above all because the Municipalities also like it, as they wish to remain increasingly owners of their land. They can thus have, for example, better control over their long-term economic or social development policies.
Dominique Choffat
2024-01-08 17:07:16
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