Malta Developers Association President Sandro Chetcuti has told The Malta Independent on Sunday that the price for 1,200 social housing units would not cost the €110 million being quoted by the government, but, according to his calculations, the private sector could build the same units for approximately €72 million – €38 million less than the figure being cited by the government.

Chetcuti calculated that it would cost around €60,000 to construct a single fully finished apartment of between 90 and 100 square metres, far less than the recent announcement by Prime Minister Joseph Muscat that the government will be building around 1,200 social housing units for €110 million.

On 1 May, Prime Minister Joseph Muscat had announced a new project that would create 500 social housing units. Muscat had said during the mass meeting, that he had requested the National Social Development Fund, which manages the IIP funds, to provide €50 million for the project.

This project, in addition to others, amounts to 680 social housing units costing around €58 million. Together, Muscat said, the government was creating over 1,000 new social housing units through an investment of €110 million.

Chetcuti had originally raised the issue during a Parliamentary Committee meeting on social housing and the high rents being charged. He had indicated that he does not think 1,200 apartments would cost €110 million to build, and explained that an apartment would not cost more than €60,000 to build and finish if the land is yours.

Asked by this newsroom to elaborate on the statement, Chetcuti explained: “Parliamentary Secretary for Social Accommodation Roderick Galdes is saying he will build 1,200 apartments for €110 million. I told him to discuss with us as we can save them a lot of expenses. You don’t need to spend €110 million to build 1,200 apartments.

“My criticism was constructive criticism, because if you have another €38 million in your pocket, you can create many schemes to help all those who are struggling to pay market prices, without trying to suffocate the market.”

He did, however, stress that he has not seen the plans for the proposed social housing developments. Asked if he is willing to advise the government, Chetcuti said the MDA is always ready to help the government make better use of their investment, but stressed that the MDA has no right to intervene in terms of how social housing is administered.

He mentioned that if the government is looking to create state-of-the-art accommodation, that’s all well and good, but warned against creating incentives.

On the rent market proposals and his concerns about what he has heard so far, Chetcuti said, “What worries me is the possibility of more controls on the private rental market.”

He said the MDA agrees with regulation, and agrees that, for example, whoever rents out property pays the taxes due, and that there should be some form of registration for agreements in order for taxes to be collected property.

He said he also concurs that what is agreed to with a third party should be honoured by both sides: “But I don’t agree with someone telling me how to reach an agreement with a landlord or tenant for example, or dictate the details of said agreement.”

He stressed that the MDA is against every form of abuse.

General Secretary at Federation of Estate Agents Simon DeBono also addressed the parliamentary committee saying that contrary to the government's statement that it would spend just over €110 million to build 1,200 social housing units, he could build 4,695 units for that same amount.

He noted that if the land was already owned it would cost him €24,000 per unit to construct a single 50 square metre flat, which does not include outside space. He stressed that there is currently a crisis where hundreds of people are living in garages, some of whom don't even have running water.

He also spoke of importing material from China and India in order to build less expensive units. He was asked whether he was suggesting that government circumvent procurement regulations to which he said that given the crisis, it should.

He also mentioned the commissions such contractors would request given such a plan and said that Outside Development Zones should not exist when there is such a crisis, with so many living in garages in inhumane and degrading conditions. He said the government has land next to major employment centres.  

During the meeting, Galdes mentioned that the 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 remarked that the "money’s worth" through the investment in social housing is there, adding that there could also be open spaces or sports facilities and so on. He said that when one builds social housing, one has the issues which come with it: “You can’t build a 50 square metre stereotypical apartment saying it would be good for everyone as that would not be true. We are not building palaces, but we are including a concept.

 “We need to look at the surrounding community as well. This is not like a person renting an apartment coming from a family without any issues, and who would integrate quickly. As such we have to ensure that through the building, we also offer support.”

He also stipulated that the properties will remain state-owned.