Developers must offer low-rent options as Maltese get priced out of market, FAA

The environmental NGO Flimkien ghal-Ambjent Ahjar has called for the government to require that permits for the speculative building of blocks of apartments, should be accompanied by the allocation of a number of low-rent apartments.

FAA said average Maltese residents were being squeezed out of the property market on both sale and rental costs. “If government fails to provide specific solutions to these two situations then it would have shown reluctance at coming out in favour of the common good, which is not at all the same as economic benefit,” spokesperson Astrid Vella said.

But while this week the Labour government announced a new housing complex in Birkirkara, FAA said that this also brought with it more take-up of open areas, increased congestion, demolition of heritage buildings, more construction waste for over-full landfills and more pollution caused by construction.

“Besides causing great hardship, the eviction of tenants who are unable to pay higher rents, increases housing demand exponentially. It is now undeniable that homelessness is on the rise in Malta. And yet, mainly because of the total absence of property tax levied on hoarders of multiple properties, there are still too many properties being purposely left vacant by owners waiting for the ‘right’ offer.”

Last week a Maltese court also recognised landlords’ rights on pre-1995 rental property, rented at below current market values, which will increase pressure for low-cost housing and lead to more building congestion.

“The authorities stubbornly refuse to relate the increasing demand for such social housing to the unregulated building industry being allowed to freely continue with unabated speculation. The end result is that we have two trends pulling in opposite directions, exacerbating the present situation to a point where government may find itself forced to put ever more resources into its own housing projects, but at the expense of other badly needed spending, for example education, public health, pensions, child care, roads,” Vella said.

“Even in the bastion of capitalism, the United States, many states oblige developers of mega-projects to offer some of their apartments at a low cost. In the circumstances FAA also suggests that the State offsets the burden placed on some landlords who may also be shouldering part of the housing provision problem, by allowing them deductions of taxes on their incomes. Of course controls would also have to be in place to ensure that such owners do not end up benefiting from the tax deduction while also charging high rentals.”