For decades, many cities have introduced densification policy objectives to stop urban sprawl or to promote efficient use of natural resources. In the urban housing sector, however, densification projects often intensify social challenges. Due to rising rents after modernization of existing housing stocks as a consequence of densification, low-income tenants are forced to leave their apartments. Risks of social exclusion and segregation increase simultaneously. In this article, we analyze how municipal planning authorities cope with affordable housing shortages in a context of urban densification. Specifically, we ask: How do municipal planning authorities promote affordable housing in densifying cities? To answer this research question, we apply a neo institutional analysis approach to better understand (1) the basic mechanisms of how land policy instruments impact affordability, and (2) why specific instruments are activated to defend affordable housing objectives. Through qualitative case study analysis of four Swiss urban municipalities, our results show that the mere availability of land policy instruments is not sufficient but that the strategic activation of specific instruments matters.

In Switzerland, for instance, a legally-binding densification policy objective has been introduced in the revised Federal Spatial Planning Act in 2013. Swiss municipalities are obliged to densify through inward settlement development to protect agricultural land and to preserve natural habitats (Art. 1 of SPA). However, since the majority of Swiss cities lacks of free inner-city plots, the process is primarily being implemented through redevelopment of existing housing stocks e.g. in the form of total replacement construction, renovation, or compaction of existing buildings (Nebel et al. 2017). Simultaneously, affordable housing shortages for low- and middle-income households have intensified in almost every Swiss city in recent years.