The Malta Development Association has called on the government to “abandon” its affordable housing project being done in collaboration with the Archdiocese of Malta.

The developers issued a statement on Wednesday calling for the government to “continue strengthening existing schemes” and abandon this recently announced affordable housing initiative, alongside the Church. The MDA said that this project was launched without any prior consultation and that it “will open the floodgates to abuse – both from sellers and buyers”

The MDA said that the government launched an Expression of Interest in the middle of summer, with a few weeks’ notice, in which it proposed for public land to be granted for free towards affordable housing.

Housing Minister Roderick Galdes however hit back saying that the MDA needs to understand that the government is not going to let the market dictate the affordable accommodation sector.

Last month, the Foundation for Affordable Housing (FAH) announced that in a collaboration between the government and the Church, 260 housing units will be developed across four localities at a 30% discount to market price of comparable properties.

Through its 30% discount, this affordable housing scheme targets people who are too financially vulnerable to independently seek a property from the private sector, but still too financially comfortable to qualify for government social housing schemes. The FAH had referred to this category of citizens as “the stretched class.”

The MDA stated that no developers, irrespective of who they are, should be given free public land to profit from building social housing plots.

The MDA threw jabs towards the Minister for Social Accommodation, Roderick Galdes, in this statement, declaring that “Minister Galdes is thinking only in the very short term, without considering the consequences for the industry as a whole or the risks to the banking sector” through all this.

“If Minister Galdes has given up on executing such projects through public contracts awarded in an open and transparent process, then he should reform the system – not open the door to abuse by giving away public land,” the MDA issued.

The developers said that through the free granting of land, Housing Minister Galdes is “destabilising the value of properties already purchased by families who had no option but to choose their price and had to pay the full cost of the land.”

Criticisms were publicized that this call promotes unfair competition and undermines the trust of people looking and willing to invest their money in the property sector. The MDA remarked for this call to offer advantages in negotiating power and in economies of scale, which is “afforded only to a select few.” It observed that in contrast, other European countries use public-private partnerships for buyers and fiscal incentives to bring prices sale and rent prices down below market prices.

The developers noted that “neither the Minister nor the agency has the resources to monitor the quality of the works being carried out.”

The MDA commented that this affordable housing model “incentivises workers not to declare their full income” – which goes against what has been recently instructed by the Finance Ministry and Finance Minister Clyde Caruana.

Affordable housing will only be available to people belonging to the stretched class of society. Who exactly is within this stretched class is established by predetermined criteria that factors in individuals’ or couples’ net worth and maximum gross annual income. Applicants are rendered ineligible if they own any sort of “residential immovable property.”

Single individuals between 25 and 34 years of age are eligible if they have a maximum gross annual income of €29,000 and a maximum net worth of €45,000. Single individuals of 35 years old or older are eligible should they have the same maximum net worth, but a maximum gross annual income of not more than €33,000.

Meanwhile, couples where the oldest partner is between 25-34 years old may be eligible if their combined maximum gross annual income does not exceed €36,000 and if their combined maximum net worth is not more than €75,000. For couples where the older partner is over 35 years old, the maximum gross annual income widens up to a combined €38,000.

In a post on Facebook, Galdes replied saying that the scheme will offer 260 homes with a price which is around 30% cheaper than the market rate, which Maltese and Gozitan families and youths will be able to afford.

The Minister said that this shows how necessary the project is.