Developers’ lobby group seeks EU probe into affordable housing scheme

Government’s plans for affordable housing have hit a major snag after the Malta Development Association asked the European Commission to investigate the scheme over “potential unlawful state aid”.

The MDA submitted a formal complaint with the European Commission’s State Aid Directorate, claiming the affordable housing scheme announced last year grants “selective advantages” to “specific undertakings” within the development and property sector.

The letter, in MaltaToday's possession, is dated 20 March 2026 and asks Brussels to probe the scheme, which is managed by the Foundation for Affordable Housing, a joint venture between the Maltese Government and the Catholic Church.

Read the letter below:

Parliament approved the transfer of public plots of land in four localities to the foundation last year. The foundation is tasked to develop these lands into apartment blocks that will be sold at 30% below the market value in the respective localities—Fgura, Marsaskala, St Julian’s and Kirkop. The intention is to help people who don’t qualify for social housing but are not earning enough to buy a house.

The foundation issued four separate tenders last year seeking offers from private companies interested in designing and building the respective sites. At the time, the MDA had warned the scheme would give potential tender winners an advantage since they would pay no premium for the land. Similar concerns were raised by Nationalist Party MP Albert Buttigieg and ADPD Deputy Chairperson Carmel Cacopardo.

According to the foundation’s website, three of the four tenders—Kirkop, St Julian’s and Fgura—are currently at evaluation stage. The tender for the Marsaskala site had a submission deadline for 6 March 2026.

In its letter to the European Commission, the MDA said its concerns related to “regulatory, administrative, and potentially financial measures that appear to grant preferential treatment to certain operators or developments, thereby placing other market participants at a competitive disadvantage”.

The lobby group said that these measures “may constitute State aid that has not been notified to or approved by the European Commission”.

Brussels was asked to assess the compatibility of the affordable housing measures with EU state aid rules, determine whether these measures constitute unlawful and incompatible state aid, open a preliminary investigation and take measures deemed necessary to restore fair competition.

The letter signed by Mamo TCV Advocates was copied to Deputy Prime Minister Ian Borg, Housing Parliamentary Secretary Andy Ellul and Finance Minister Clyde Caruana.

Shockwaves to the system

(From left to right) Developers Anton Camilleri, former MDA Secretary-general Paul Attard and Pio Vassallo tendered their resignations from the MDA in what is believed to be a reaction to the association’s request for Brussels to probe government’s affordable housing scheme

But the MDA’s unprecedented action caused political and industry shockwaves.

On Friday, developers Anton Camilleri, known as Tal-Franċiż, Pio Vassallo and association secretary-general Paul Attard, resigned from the MDA.

Industry sources privy to the situation told MaltaToday that Camilleri and Vassallo were among the tenderers for the affordable housing projects and were miffed by the MDA’s request for a Brussels investigation.

Camilleri is a major developer with big plans for the Villa Rosa site in St George’s Bay, Paceville. However, Camilleri was also bidding to buy out MIDI plc on the Manoel Island project before government decided to step in and have the island returned to public ownership.

The resignations have fractured the development lobby’s tranquillity, which in turn is cause for political concern.

“We have a situation where the government through its foundation is going to skew the market in favour of a select group of developers at the expense of others, who have invested millions,” an industry source, who preferred to remain anonymous, said.

For Prime Minister Robert Abela, the MDA’s action is a spoke in the wheel ahead of an impending general election. The Brussels probe could derail what could have been a flagship housing project but more significantly it creates a sense of unease within the construction sector, which the Labour Party wants to keep on its side.

“Whichever way you look at it, this is bad news for the administration and it even sends the political message that developers will not necessarily kow-tow in a situation where they feel a few are put at an advantage over others,” a source close to government said.