PN doubles down in its opposition to government’s affordable housing project

The Nationalist Party has doubled down in its opposition to the government’s affordable housing project.

“The Labour government, which claims to stand up for the little guy, is in fact doing the opposite, enabling big developers to benefit heavily from subsidies that could have gone to the people, had the Government built the apartments itself,” a Nationalist Party statement read.

Earlier this month, Malta Development Association and the Nationalist Party slammed Housing Minister Roderick Galdes over the government affordable housing scheme, saying it will give rise to speculation and benefits chosen developers.

Under the scheme announced for first-time buyers, the government will give public land to selected developers, who will pay only what is referred to as “ground rent”.

“The land will effectively be given away for free to these developers, who will then build the apartments and allow the Government to sell them at commercial rates with a condition that a 30% subsidy is applied to the final price,” spokesperson Ivan Bartolo said. “This means that the chosen developers will make higher profits than they would if operating on the open market. In fact, it is estimated that in the private sector, land accounts for around 60% of the total development cost. Therefore, if under this scheme the developer is only required to provide a 30% subsidy, they will still retain a considerable profit since the land was given to them for free. It is true that ground rent must be paid but we know this cost will ultimately be passed on to the buyer.”

Bartolo said government is being overly generous with the developers selected for this scheme.

“Had the government built the apartments itself, this profit could have been transferred into a much larger subsidy,” he said. “It is unfortunate that, when faced with criticism and valid concerns, Minister Roderick Galdes chose to go on Labour Party media and lash out, even on a personal level, rather than provide clear answers to the legitimate doubts being raised.”

The PN said it believes that although the scheme appears to assist those who wish to purchase their first home, and while it would be good for the government to try to address this difficulty, it would have been far wiser and more transparent to avoid “launching a convoluted scheme riddled with shadows and the stench of impropriety.”

“Instead, the government should have built these apartments itself and sold them at cost. Had it done so, the subsidy would have been far greater,” the PN spokesperson said.