Alternattiva Demokratika are busy encouraging people to sign up for a referendum which many do not understand. To help them understand, they are making misleading promises. There has been a lot of false hope put forward by AD, which can be divided into three main areas.
First, if the rent laws are reformed there will be more housing available for rent. Second, if the rent laws are reformed there will be more affordable housing for sale. Third, and even worse (in terms of false hopes at least!), once the rent laws are reformed, government will be able to gain a lot more revenue by taxing people’s empty homes – by charging a vacant property tax.
I wonder how many of those who have already signed up for the referendum, or who plan to vote in favour if AD get their way, actually want to have a vacant property tax imposed, but this, in AD’s view, is the next natural step after reforming the rent laws.
To quote Edward Fenech, AD’s finance spokesman, the economy and tourism (and housing too, I now presume): “Another source of income is that from the taxation of vacant property”, which they are actually promoting following changes to the rent laws!
Let us, for the sake of clarity and honesty – which is so missing in this debate about the rent laws – divide Malta and Gozo’s empty homes into three.
First, there are the homes which are owned, mostly outright – as the majority of people in Malta have so far paid off their loans early. Many of these people also actually own more than one home, but that is another story.
Then we have those homes which are rented, either from the government, or from private owners. A large proportion of these are controlled by the old rent laws which means, very wrongly, that they are not really paying anything that we can even call a rent. Paying an average of say Lm20 per year for a property worth at least a miserable Lm25,000 is not rent at all.
And, worse still, these landlords are responsible for repairs, as well as the worry of the children of these tenants continuing to live in the property after the original tenant dies – the so-called “right of inheritance” which does not even exist automatically in respect of government-owned properties.
However, this section also includes the new post-1995 rent law which changes lets, because, contrary to what is being said, new rent laws did come into place in 1995, and Malta’s modern tenants today pay very high rents and have no protection at all.
I know that AD are not in the position of having to take any responsibility for all the things they say, but they should reflect on their callous disregard for tenants, and how out of keeping this is with normal Green principles.
They should remember that while there are many abusers, many of the tenants in the old fixed lets are very simple older people, many of them older women living on their own, who have no money for more rent and no money to even repair their homes. (And one can understand why the landlord feels no obligation to do repairs either.)
Most of the people living in the worst housing in Malta are older people. And most of these are in fixed private lets. Yet, there has been no coverage of this issue by the media at all. All anyone writes about is the few millionaires who are living in private lets, as if that is even most of the picture.
Last, but by no means least, the third group are Malta’s empty homes. These will not be affected in any way by any changes in the rent laws. The rent law changes will only affect the second group. Presumably if the government does, as it is saying it will, reform the rent laws, and once some of those tenants die, more of these properties will be returned to their rightful owners and I suspect the proportion of empty homes will actually not only not decrease but will increase.
So the rent laws, particularly the dreadful right of inheritance, must go. But do not expect to find affordable housing as a result of the change. That can only come about from either a house price crash, planning gain and/or more government investment in housing.
It’s a tough reality but there will be no win-win situation, as AD are claiming, after the government makes the much-needed changes to the rent laws.
There is another important question. Is the general taxpayer willing to put his money where his mouth is and fund more investment in housing? So far there has been an intolerable burden on many landlords. AD, or the proponents of rent law reform, should make it clear that there is no gain without a lot of pain.