Dean of the Faculty for Built Environment at the University of Malta Alex Torpiano stressed the need for “careful consideration” on the social impact of home-rental increases as a result of high-rise projects such as the Mriehel tower and the Sliema Town Square project.
In an opinion piece published by The Malta Independent, Professor Torpiano noted how high-rise buildings of 20 floors or more tend to cost roughly 50-100 per cent more than medium to low rise structures. He argued that should the construction costs double, or inflate significantly, then the return on investment must be greater than the increased cost – otherwise embarking on the project would not be viable or feasible.
Professor Torpiano then goes on to say that in this scenario, the risk would be higher and therefore, profits generated through renting out homes within the towers must be greater than the cost incurred.
“..this implies that the business model (for the high rise projects) assumed a hefty increase in rentals or sale prices.”
Changes in rent prices have significant effects on any economy – just looking at the situation in London, where many locals were driven out of their home town due to a boom of development projects, purchased by the wealthiest individuals and having a profound impact on the day-to-day lives of all Londoners.
Professor Torpiano’s comments come following the Planning Authority (PA) Board’s decision to approve five high-rise towers – four in Mriehel and one in Sliema known as the Town Square project.
In the case of the Mriehel project, eNGOs , civil society and sections of the public expressed their concern at the fact that Mriehel was not included in the list of high-rise areas in the 2014 draft policy. A number of eNGOs have stated that Mriehel was included “by stealth,” upon government’s approval.
In a marathon PA Board hearing, the Mriehel high-rise project was approved by a total of 11 in favour and two against.
The case of the Sliema Town Square project is somewhat more controversial in view of the Environmental and Resource Authority (ERA) Chairman Victor Axiaq’s absence, and the failure of a PA Board member to read out Prof Axiaq’s comments.
It has been said that Professor Axiaq called the environmental impact assessments carried out on the project were are “sham.”
This project was approved by seven Board members in favour and six against. Among those Board members voting against the project are PA Chairman and Deputy Chairman who expressed a number of concerns.
In his closing remarks, Professor Torpiano wrote that if Malta would like to retain its status as a top tourist destination, how could approving projects which would make Malta look like the rest of Europe help retain that position?