The president of the Malta Developers Association, Michael Stivala, disagreed that what Malta is experiencing is over-development, insisting that development must continue in order to stimulate the economy.

In an interview with The Malta Independent on Sunday, Stivala discussed the effects that mass development has had on this country and what needs to be done better in the future.

Stivala’s predecessor, Sandro Chetcuti had famously told developers, “make hay while the sun shines”. When Stivala was asked about this he said that Chetcuti’s message was an important one because it focused on stimulating the economy.

“The message is: development will continue,” he said.

When pressed about whether development has reached its limit in Malta and whether this was resulting in overdevelopment, he disagreed and said it is being done sustainably.

Stivala said that when the Labour government came into power in 2013 it had to deal with an “economic stalemate”.

He said that there was a push from government to reduce useless bureaucracy which motivated developers to invest more. As a result, the country experienced economic success from 2014 onwards.

“As MDA, we lobbied with government to introduce certain incentives like the first-time buyers’ scheme. This stimulated many people to buy their residence and it started the boom that we had in the following years,” he said.

Answering a separate question later on in the interview he identified two ways of generating income, it is either by increasing taxes or through economic growth.

He highlighted the importance of economic growth in Malta and how without this, government would not be able to subsidise the rising costs of food and energy. It would not be able to finance Malta’s institutions.

He was asked whether he agrees with a statement made by a leading developer, Joseph Portelli, where he said that we have “100 more years of development” and whether all this development is resulting in overdevelopment.

“We are not talking about overdevelopment, we're talking about sustainable development,” he said.

He made it clear that development has been going on for thousands of years and it will continue as usual.

“For this budget, we are proposing incentives for purchasers of property and sellers to buy greener buildings,” he said.

He added that the MDA is currently proposing incentives to build greener and more environmentally-friendly buildings.

He took the opportunity to praise the importance of development which supports all types of industries by building.

 

Building more and building higher

During a panel discussion on construction and the environment, as part of the President’s State of the Nation annual conference, Stivala made the argument that there is a need for more incentives to build higher which will make room for more open spaces.

He was asked whether building higher was the best way to go and whether this would damage Malta’s skyline.

He brought up the Floor Area Ratio (FAR) policy which is the only policy which allows developers to build higher if they create more open spaces on private land.

When talking about government land, he said that the MDA is on board with government’s €700m project to create greener urbanised areas. This would include the pedestrianisation of St Anne’s Street, Floriana.

When talking about private land, he said that developers will not buy land for it to remain as an open space; they will buy land under the condition that they can build there. The seller will set the price of the land based on its buildable potential.

“We never buy land for open space,” he said.

The developer will pay for every square metre that is buildable on that land. Therefore, the developer will try to make use of everything that they have paid for.

“With the FAR policy, we use our own private land for open space, but then we substitute that buildable space at a higher area,” he said.

With regards to the skyline, he said that this was a “very subjective matter”. He brought up how there used to be discussions about the effect the London Eye would have on London’s skyline.

In response to his explanation of the FAR policy, he was asked whether building higher causes problems such as parking, sewage and waste problems for the high number of residents who would be concentrated in a small area.

He clarified that with the construction of tall buildings there are very strict policies and regulations, such as a waste management system.

“You have to keep to certain minimum sizes. For example, you cannot build a tower with apartments which are less than 150sq.m.” he said.

“The FAR policy says that the parking required for the project has to be constructed on-site. When you calculate the project you need 500 car spaces and you need to have them physically on-site,” he said.

He said that the normal system for the Commuted Parking Payment Scheme (CPPS) is that you pay the CPPS if there are not enough parking spaces. However, with tall buildings, you cannot even pay as a substitute, but you have to construct the parking spaces on-site.

He said that with the FAR policy, when you calculate how much gross floor area (GFA) you can build on a tall building, it is actually less than a conventional building.

“So if for example, you have a piece of land that is 5,000sq.m. where you can build 3,000sq.m. GFA. When you build a tower in reality you build less, so the disturbance of a tower on the adjacent building is less,” he said.

Despite the policies in place, there are still a lot of complaints about Malta’s development being suffocating which hinders the quality of life. Having spoken about the benefits of these policies, Stivala was asked whether these policies were ultimately working.

“There's always room for improvement. I believe that first and foremost we have to discuss the economic model of Malta,” he said.

The 2011 census recorded that there were over 41,000 vacant properties. Since then, no data has been released revealing the number of vacant properties in Malta.

When asked about this number and whether developers should focus on working with the properties which are already available, he said that this figure was present during a financial crisis.

“Nowadays, that number does not exist anymore. The majority of projects are sold on plan, so we do not have vacant properties. We might have, but the figure will be minimal,” he said.

 

Tourism

Earlier this year, a study, commissioned by the Malta Hotels and Restaurants Association (MHRA), revealed that Malta would need to bring in 4.7 million tourists to cater for all the planned increase of hotels.

When asked whether this is too much he said that he does not believe that government should interfere with the supply of beds; he said that the supply of beds must come from investors.

He also replied by saying that although the study was carried out well, it mentions planned hotels, therefore, a lot of these might not even happen.

He agreed that it would be too much, but did not show any concern.

“If they happen most of the projects are being financed by banks and banks know what they're doing. So the bank will not lend you money to build a hotel unless they are sure that it is a viable business,” he said.

He brought up how in 1990 there was a policy which seized the development of all hotels unless they were five-star.

“Can you imagine Malta without all the hotels? Without all the lovely boutique hotels?” he said.

As a result, in the early 2000s, there was a tourism collapse because government’s policy did not meet the needs of the tourism industry at the time.

“It is easier for me to say 'they should not give permits’ because I will have less competition. But then the competition will put me more on the edge to make sure my product is working properly. We cannot interfere with this competition,” he said.

Furthermore, he said that for tourism there should be a better strategy to attract more tourists in winter, rather than at the peak in summer. He spoke highly about Malta being “greener” in winter and a very attractive place to visit.

What worries me as well is excessive bureaucracy. We need to make sure that we are attractive as a country by reducing bureaucracy.

“Malta, as a product, can be the excellence of Europe, but there needs to be better planning,” he said.

 

Insubordinate developers and the uglification of Malta

When the argument was brought up that developers are getting away with doing whatever they want, he said: “I completely disagree with your statement, developers do not do whatever they want. We build according to permits. We apply for permits according to the current policies and regulations.”

He explained how the PA has a very stringent system to apply for the compliance certificate which will give you access to electricity and water.

“This is a complex exercise, unless all conditions in the permits have been adhered to, you do not get a compliance certificate,” he said.

He stressed that more studies and data are needed to have a better plan moving forward.

“We need proper studies and professional discussions. Not a discussion which insults developers or the industry,” he said.

He spoke about the importance of reducing bureaucracy which will make the authorities more efficient and attractive.

“When you have foreign investors coming to Malta to open a company it can take three months; this is not attractive,” he said.

Lastly, he was asked about the aesthetics of Malta’s buildings and how this is resulting in the uglification of Malta.

He said that most of the photos that are uploaded on social media would be buildings in shell form.

“Of course, buildings which are unfinished do not look nice, but yes we can improve,” he said.

He highlighted one of the main issues as being that today architects do not have much freedom to improve a design because the regulations are so stringent.

“There are many regulations that tie the architect's hands,” he said.

“Let's not blame the developers – we are investors, we buy land, we go to our architects, the architect applies for permits, the permits are approved by authorities and we build according to those plans,” he said.