Last Updated on Thursday, 7 November, 2024 at 9:33 am by Andre Camilleri
Two weeks ago, I received a call to participate in a TV programme discussion on TVM. The TV programme, Popolin, discussed housing affordability. I accepted the invitation, as this is a topic, which is high on the Maltese agenda, and a priority for me. When I ran for the MEP elections with the PL, one of my listed priorities was the provision of new models and creative financial instruments to provide for affordable housing. Sometimes, people mistake affordable housing with social housing. They are two distinct markets. Whereas affordable housing is providing property at an affordable price, social housing is to provide for those who are in need. I explained this quite in detail during the programme. Let’s focus on social housing first, and then we treat the topic of affordable housing.
Social housing, if available, must be provided to those who seriously need it. Here, the categories must be chosen in a way to provide a clear picture. Let’s say we have vulnerable people, and other categories that are not able to work hard to provide for themselves. The government must step in to provide social housing for these groups to alleviate the burden and subsequently provide dignity to people. There are several individuals, or families, that fall within these groups.
Strange as it may sound, I witnessed separations and divorces with many ending up not having a proper shelter. They simply do not afford it. Some end up renting properties regarded as sick buildings. I have also seen single individuals over 50 who have never purchased property and are now at risk of being without proper shelter. The reasons were different. Some lived with their parents in rental accommodation dating pre-1995 and are now being evicted even if the law states otherwise. The new trend is to request a freezing order of all the members of the household when the parents receive a court eviction letter. This exerts a lot of pressure on the household members. The situation is becoming surreal, and lawyers, who know the system well, are weaponing courts against innocent individuals. It is stripping people of their dignity.
Social housing must be provided to these people on a temporary basis, until they are able to support themselves – unless affordable purchasing options are available through a suitable system. The contracts must be clear, and the Housing Authority must have a strict policy, as well as a greater visibility of its stock of available dwellings. Since 2013, the Housing Authority managed to regularise several anomalies, as well as address the gaps of missing information of its stock of dwellings. They did a great job, however, there are still problems. One of the problems relate to the revisions of social housing rents and the subsidies covered by the government. The means testing connected to the income bands is not enough to cover for monthly rent, as well as to qualify for social housing at a certain age.
What I mean is that I witnessed situations where people do not afford the rent, and the subsidy provided by the government for private rent is not enough. During my campaign I encountered people who have been living in social housing since Dom Mintoff’s times, including their children. Even in such cases, the rent increase must provide a transition period. In summary, the Housing Authority must consider revising the means testing bands, as well as the rent subsidies to help the C2 and D segments of society. Today, even the C1 segment is finding it difficult to deal with the rent and property prices. And here I must thank the government for widening the tax bands to provide for these groups in the 2025 Budget.
Let’s now focus on affordable housing. My point during the programme was to explore the idea with the foundation for affordable housing to start providing a number of units at an affordable price. What does this mean? It means that the government, along with the Church, and other private entities that have strong CSR programmes, can explore the idea to build units at an affordable price. It can also be part of the ESG reporting and programme of companies. The scope is to provide units, two- or one-bedroom apartments, at 25% to 30% less than the market price. Also, the government can negotiate with the EU Commission, now that there will be a new EU Commission, in view of the fact that Social and Democrats suggested decent housing for all in their manifesto. These can be provided as part of the EU budget’s guarantees to cover for the risk in interest rates, thereby providing lower building and mortgage costs. This would mean, recording a guarantee on the EU Budget and work with the EIB to provide an instrument of a low interest rate for such projects.
Like this, we could guarantee a supply of units per year for those who are, either starting a family, are single, over 40 years of age who happen to have a problem due to a separation case and other segments of society. Still, we must do it in a way that it is not regarded as state aid, and the EU must step in to help. If the EU Commission wants the EIB to finance defence research projects, likewise, our representatives in the European Parliament, especially the PL representatives, must push for such social measures, ahead of the EU Budget negotiations. There is no other way to solve it. The economy will keep on growing and house prices have a propensity to increase.
This policy could support young couples starting families and potentially encourage larger family sizes. If for a reason, at some point in their life, they decide to move out, they must be bound by terms and conditions and strict conditionalities on pricing. The property contracts must be designed in a way, that if for a reason the property is to be sold, it must be sold with the same terms and conditions, that is, 25% to 30% of the market price. And we must have a system where the properties are recorded for transparency and governance’s sake. The government can surely help by providing land. There are areas, where the government can regenerate along with the private sector. However, the land should not be allocated to property developers or speculators for profit-making purposes. The government should avoid competing with speculators by placing its land on the market. The land must have a social purpose, especially land available within the development zone.
Perhaps, such proposals may be later found in the upcoming policies that the government intends to propose in the Malta Vision 2050. I look forward to seeing additional measures, aimed at helping families and the community at large.
