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Writer's pictureRemo Daguati, CEO LOC AG

Future zones for work spaces

The provision of innovative commercial areas is becoming more and more of a challenge with an uncertain outcome. In order for Switzerland to regain its spatial competitiveness, various elements of work zone management must be optimized or newly created. A typology of commercial areas can help real estate and technical experts as well as authorities to better understand the needs of the economy.



The pace of competition for locations remains horrendous. When top domestic or foreign companies evaluate locations, a potentially suitable location must be offered within four to 48 hours. Companies then evaluate between three and five months before making their location decision. If new construction is being carried out, the construction project must be able to be completed within three years of the location decision. When moving into office, laboratory and test space in business centers, the move-in period can even be significantly shorter, usually from immediately to 15 months. Locations and usable space that are not legally planned or have not already been built have no chance in the competition for locations.


Gap is widening ever further

The gap between the consistently high pace of competition for locations and the ability of authorities and investors to develop competitive business areas has widened massively over the last 20 years. Planning projects for the development of work zones now take decades in Switzerland. The time required to implement cooperative planning for the development of a key location has tripled or quadrupled since the turn of the millennium. Regulatory, market-related and political reasons are relevant for this.

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Regulatory area: charged framework conditions

The reasons in the regulatory area are manifold and are roughly outlined below:

  • Swiss spatial planning is based on the terminology "trade" and "industry" and has difficulty dealing with hybrid, knowledge-based economic functions and key technologies that, on the one hand, strengthen the workplace, but on the other hand, create completely new, innovative services. Overly rigid and far too detailed usage specifications, often regulated by special use plans (which make objections easier), are increasingly preventing the most innovative economic forms from receiving attractive space in a timely manner. A typology of work zones is needed.

  • A dissonance between spatial planning, urban development, open space design, development, sociology and architecture runs through a multitude of over-standardized quality assurance procedures to achieve costly, time-consuming land use planning. Aspects of economic development play no or only a subordinate role today.

  • At the same time, site developments are faced with further material requirements relating to monument preservation, employee and fire protection, environmental protection or health regulations, etc., which delay building permit and operating permit procedures, make construction more expensive for companies and make it difficult or even impossible to transform old existing buildings into space-efficient and process-effective uses.

  • The authorities lack both material and formal coordination of all procedures. Investors have to spend a lot of time searching for approval and are increasingly avoiding this risk, as even the best organized cooperative plans are increasingly failing.

  • Requirements for the development of areas are primarily dogmatic and often lead to the misallocation of transport services. Mobility policy rarely allows prospective, experimental approaches using and combining the latest technologies and modes of transport. This means that Switzerland is losing considerable potential for innovation in land management.

Market-side challenge: Extraction of added value inhibits innovative concepts

Market hurdles have also arisen in work zones:

  • The new spatial planning law has led to significant price increases for land, which are putting pressure on Switzerland as a place to work, by limiting the settlement area and reducing the availability of land not only in the residential sector but also in commercial and industrial areas. Prices are being paid for land that is ready for construction, which is too much for many SMEs and economic players, especially in the manufacturing second sector.

  • Since densification is either hardly or only hesitantly successful in commercial areas and the verticalization of production processes is (still) met with resistance by companies, the high land prices cannot be offset by higher densities. Authorities often do not allow sufficient building heights or prohibit the addition of additional floors to ensure economically viable densification.

  • Confiscatory surplus value extraction, particularly in the core cities, reduces the overall return on areas that are actually well developed. Real estate developers shy away from additional risks in the commercial space segment. This is also why more profitable housing and public uses are favored. There is a lack of innovative concepts for commercial space, and vacant properties are only hesitantly enhanced or modernized with contemporary usage concepts.

  • Office vacancies remain above average after the pandemic (keyword: "home office"). The political discussion about housing shortages is increasing the pressure to open up not only offices, but also industrial and commercial areas for purely residential developments. This is strengthening the focus of real estate development on residential projects, but is also driving up prices for increasingly scarce industrial and commercial space and displacing the manufacturing industry from core cities and agglomerations. Work and living are drifting even further apart in terms of space.


Political aspects: Lack of prioritization of work zones

This leads to the political aspects of a lack of prioritization of work zones:

  • Spatial and transport planning as well as economic development today are contradictory and lack symbiosis. A saturated public wants less growth and is no longer prepared to allow the economy the space it needs. Switzerland's unbridled prosperity in recent decades has made it possible to actively inhibit economic interests in work zones and to one-sidedly strengthen ecological and social issues. Economic land policy - ie the timely provision of attractive land for use - hardly has any political weight anymore.

  • There is a lack of incentives and tools to determine the goals and procedures for prioritizing commercial areas and developing them in a timely manner in cooperative planning with close involvement of landowners. The cascade of cooperation between municipalities and landowners, cantonal specialist departments (especially spatial planning and economic development) and the federal government (SECO, ARE) to strengthen work zones is successful in individual cases, but is not gaining momentum across the board.

  • There are no incentives for economic actors or landowners to ensure that designation as a priority area actually results in tangible, effective benefits. Designation as a priority area does not protect against other legal areas (ecological, social, cultural, etc.) having an unfiltered impact on an area without legal and political consideration.

  • Increased conflicts in the global context, economic stagnation due to excessive deindustrialization in the EU (especially Germany) and the showdown between the major powers in the economic, technological and military spheres will place massive demands on Switzerland and Europe in the coming years. However, there is a lack of discussion about how resilient work zones can contribute to our country's economic and social security and supply situation.

  • There is a lack of instruments to promote commercial space – such as housing subsidies – which would enable the economy to offer affordable, innovative and attractive space in the future.


Switzerland is no longer competitive in terms of its spatial competitiveness as a business location. Manufacturing and trade are moving to the surrounding areas and the periphery (or relocating processes abroad). Work and living are drifting further and further apart. Commuter flows between the periphery and the centers are becoming unbalanced. Spatial planning is failing in its task of creating a balanced settlement and mobility development where living and working are developed in harmony. Spatial planning must once again contribute to the competitiveness of Switzerland as a location as a strategic instrument.

 

The discussion paper "Future Work Zone Management" (available only in German) shows which space requirements of the economy must be addressed in the future and makes suggestions as to which instruments should be created or expanded for this purpose.



Future of Work Zone Management LOC AG Remo Daguati



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