[WATCH] Will government step in to pay for tenants in rent-controlled properties?

Will government step in to pay for tenants in rent-controlled properties?

Malta’s social housing minister Roderick Galdes has admitted his country’s rental law anomalies have long been swept under the rug, but said the State should carry the burden of legal challenges against rent controls.

Galdes defended State intervention and rent control regimes, citing countries in Europe seeking to keep prices stable or cities like Berlin which have a long history of rental regulation.

He did not deny a suggestion that the government will pay landlords the rents they are demanding, in a bid to allow tenants to live in their formally rent-controlled homes.

Galdes said Malta had lost a chance at reforming its pre-1995 rental regime in 2010, and since then landlords have won countless cases in the Maltese courts to demand a fair rent from their tenants.

“The government at the time must have reasoned it could not bear the burden of these landlords’ claims. It was indeed the time of the credit crunch… today if we are to intervene, it is the State that has to carry that burden. And there are various solutions… we are yet to announce them,” Galdes said.

Backed by the force of a European Court of Human Rights ruling, the 1979 rental laws protecting leases and converting them into 20-year fixed rents has also been challenged. Landlords who received pittances in rents are now winning damages from the State in courts, and mounting eviction cases against long-standing tenants.

“Just as any reform, it will cost money,” Galdes said. “I can’t understand why the Opposition would criticise us for using the money from the Individual Investor Programme to solve housing issues.”

While housing is a fundamental right, Galdes said that social issues will undoubtedly remain. He noted that many social housing requests in the 60s were due to post-war poverty, between the baby boom and large families living in smaller households.

“The situation has changed. Now we’re seeing a type of poverty that comes from separations, matrimonial difficulties in the family, and single-income families that can’t access the property market. We had to change our strategy,” he said.

In terms of statistics, Galdes confirmed that the current social housing waiting list stands at 2,300, down from 3,300 since 2013. He said that there are currently 300 families benefitting from the equity-sharing scheme, which allows persons over the age of 40 to purchase at least 50% of their property, while the rest is purchased at a later stage.