The Malta Independent 18 October 2018, Thursday

No social housing crisis, but there is a problem that needs to be addressed, committee told

Wednesday, 16 May 2018, 18:56 Last update: about 6 months ago

Housing Authority representatives told a joint Parliamentary Committee today that there is no social housing crisis, but admitted to there being a problem that needs to be addressed.

The discussion within the joint Parliamentary Committee for social affairs and family affairs dealt with the social housing issues and the high rent situation.

Housing Authority representatives delivered a presentation. One of the representatives said that the pending applications for social housing generally tend to average around 2,600. “We always have an average around that amount. Every few years we conduct a review to see if people are still interested where numbers drop. One is currently underway.”

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“Irrespective of the recession and boom periods, the list doesn’t rise too much.” The waiting list peaks during elections, where we see more influx of people registering, the representative said.

He said that there is no evidence of there being some crisis. “If you see the list in 2008 and the list in 2017, they are practically the same. Having said that, there is a review underway.”

“But we need to take action to try and reduce the current 3,200 waiting list,” he said. “While we say there is no crisis, we recognise that there is a problem, especially for those most vulnerable.”

“Aside from the 1,200 units being built, a profiling exercise is underway, a census of sorts of the 3,200 social housing applicants, and we are categorising the difficult areas,” the representative said, adding that initiatives that would immediately help those vulnerable people would then be able to be taken.

The representative noted an interesting statistic, that as on date of application for social housing, only 1031 earned under €5,000, 1926 earned between €5,000 and €10,000 and 173 applicants earned over €10,000 euros, yet for the income year 2015, the number of people earning above €10,000 euros rose to 1,193.

He said he does not believe the government should interfere in the price mechanism of property prices, adding that whenever such things occurred in the past, issues popped up. He said that “we should directly assist those most vulnerable.”

“There is a difference between regulation and control.”

The Housing Authority CEO, Stephen McCarthy, was asked what would happen if, for example, the family gets back on its feet. He said that there is a review every two-three years, and the practice is that if one passes the means test, keeping in mind that these had an 85% subsidy compared to the market, “we would amend this figure, and there were cases when we reverse it completely.”

Asked what would happen if, for example, the parents pass away but family members still live in a social housing unit, he said “If people pass away the keys are meant to be returned, but there is an allocation board who can review the applications of the children should they want to remain. We are not obliged to pass on the unit to the children.”

It was said that government will be drawing a white paper to address certain legislation.

Parliamentary Secretary for Social Housing Roderick Galdes said that government already spoke about these issues in Malta. He said that since the economy is doing well, there was an influx of foreigners, which resulted in an increase in rents. This, he said, could leave an impact on social housing as the demand would go up.

He noted that a study over nine months was conducted, which included around 50 entities as well as many individuals. He said that government is currently discussing a number of possibilities which will be made public through a white paper at a later date.

The white paper won’t solve all issues, he said. He said that they are also discussing how the state could help those who cannot meet rising rent prices, while at the same time ensuring that those who invest in the rent market still have incentive to invest.

He spoke about looking at whether current subsidies are operating properly, at how contracts are drawn up, if there should be different registration etc. He said there will be a public consultation.

He said that the white paper will not go into the properties regarding pre 1995 agreements.

He mentioned that work is already ongoing for the creation of more social housing units. In all there would be around 1,200 apartments, he said.

Galdes brought up the issues of abuses. He spoke of the need to have compulsory registration of all rent agreements. He said subsidies should be based on the income of the person.

Another MP asked about enforcement in terms of tax payments. Galdes said that he is not responsible for the Department of tax, but did say there is enforcement. He could not indicate when the white paper would be published, but stressed there is continuous discussion with stakeholders.

Turning to the right to purchase the property which was rented through social housing, Galdes indicated that this won’t change for the old housing stock, but will for the new apartments being built.

PN MP Maria Deguara highlighted a potential issue where people would buy the property from government and then sell it at a much higher price. Galdes tried to make the issue political by mentioning the PN, but Deguara stressed she was not being political and never is, mentioning that if there is something that needs to be arranged then it should. Galdes said that there are conditions with regards to selling it to third parties, adding that a substantial amount of time had to pass.

Sandro Chetcuti, President of the Malta Developers Association said that it is hard for landlords to find good tenants. He spoke of the need to differentiate between the free market and social housing.

He said government should only regulate to the extent where there would not be a jungle and not directly interfere in the market. He said the MDA does not defend anyone who is abusing. He said that contracts must be respected by both parties and doesn’t agree that someone be kicked out if there was an agreement made with a landlord, where the person in question had agreed to rent for another year, for example, yet the landlord would want to kick him out.

More social housing units than were pledged can be built with the amount government has earmarked

General Secretary at Federation of Estate Agents Simon DeBono said that contrary to government's statement that it will spend just over 110 million euros to build 1,200 social housing units, he could build over 4,500 units.

He noted that it would cost him 24,000 euros per unit if the land is already owned, to construct a 50 sqm flat. He stressed that there is a crisis where hundreds are living in garages, some of whom don't even have running water.

He said it would take him one month to build every floor. He spoke of importing material from China and India in order to do so.

He was asked whether he was suggesting that government circumvent procurement regulations to which he said yes, given the crisis, and mentioned the commissions such contractors would ask for through such a procedure. He also said that ODZ does not exist when there is such a crisis, with so many living in garages who are living in inhumane and degrading conditions. He said that government has land next to major employment centres.  

Roderick Galdes noted that government does not have the ability to build as many apartments as it wants as it also has a duty to the communities as a whole, also noting that apartments aren't rented in shell form, but are rented when they are completely finished. He noted that the "moneys worth" through the investment in social housing is there, adding that there could also be open spaces or sports facilities etc. 


 

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