Affordable Housing Solutions – Questions & Answers

16th November 2023
We had an overwhelming amount of questions submitted during the second module of the Malta Sustainability Forum 2023, ‘Affordable Housing Solutions’. We didn’t have time to answer all of them during the live transmission, however we have sourced some answers to your questions from our speakers.

1. My question is a general one: How can housing as an investment commodity and housing as a human right be reconciled? Can we start thinking about, and developing, a social market of housing which operates independently of the liberalised market of housing?

Dr Rachael M Scicluna - Currently, in Europe there is a lack of social and affordable housing. Currently, the housing sector is led by the liberal market first because it is the only convincing (postwar) narrative that we have. It is also a moral argument whereby homeownership suggests that you are a good citizen (bil-ghaqal). Second, the lack of social and affordable housing is also impacted by the rising needs of new family patters and domestic rhythms, migration, and an economic boom for the case of Malta. The issue in Malta can be traced to a change in policy in the 1990s, where this policy allows for the social housing stock to be sold to its tenants if they qualify through the eligibility criteria. Undoubtedly, this had a huge impact on our supply.

With a booming market and a lack of regulation, spatial studies/zoning, including a Rental Index the situation in Malta became chaotic and unaffordable. The fact that the HA provides subsidies is significantly important, but it does not solve the problem. Hence, the advice would be to develop a housing vision that moves towards building a healthy affordable (ideally community-led) housing sector which is independent of the government or the private sector. This will offer a healthy competition to the market and will cater to all those who for one reason or another are unable to purchase a home. Having a solid affordable sector will provide stability and security, while also offering a new way of living which meets the needs of modern dwellers. With all this in mind, this shift can offer the financially-stretched middle class and those at-the-risk of poverty to afford an alternative lifestyle choice, if they wish! Choice is always good!

2. There is a difference between a social enterprise functioning in the current liberalised housing market and a social market of housing that functions separately from the liberalised market. How can housing as an investment commodity and housing as a human right be reconciled? Let the liberalised market work as a free market, and create a separate housing market.

Dr Jake Adam Azzopardi - Indeed housing stands as both a human right and an investment. Balancing these roles isn't about dividing markets but integrating them. In a liberalised market, social enterprise models and strategic policies can ensure housing affordability and quality, aligning investment goals with the essential need for shelter. At our Foundation, we strive to merge market efficiency with social objectives, making housing accessible for all.

3. My question is a general one: How can housing as an investment commodity and housing as a human right be reconciled? Can we start thinking about, and developing, a social market of housing which operates independently of the liberalised market of housing? I see no reason why we cannot have two housing markets, one which is profit driven and regulated by the current regime, and another market that is driven by the principles of affordable quality housing and security of tenure and that will be regulated by a completely different regime. With good policies, we can have NGOs develop the notion of housing associations as social landlords. My simple point is that as we have seen in health care, it is extremely difficult for a private market to provide for the health needs of a society. And it is also difficult for the private health care market and a national health care service to be driven by the same set of values and regulatory framework. In some aspects they overlap, but not in most essential attributes.

Housing Authority - At the Housing Authority, we recognise the complexity of this issue and are exploring innovative strategies to address it. We understand the importance of balancing profit-driven markets with the imperative of ensuring access to affordable, quality housing for all. That is why the Foundation for Affordable Housing was established in collaboration with the Archdioceses of Malta, which focus is bridging the gap where citizens do not qualify under the schemes offered by the Housing Authority and the private market.

Your proposal of a dual housing market system, one profit-driven and the other focused on affordable, quality housing with secure tenure, is intriguing. We acknowledge the potential benefits of a separate regulatory framework and the involvement of NGOs in developing housing associations as social landlords.

The Authority is committed to exploring diverse policy approaches that could lead to a more inclusive and sustainable housing system. We believe in leveraging collaborative efforts and innovative solutions to ensure that housing remains a fundamental right while acknowledging the realities of market dynamics.

4. The situation of our service users coming for food and sustenance at our parish in Qawra is that they are being asked for € 700/mth sharing. When those seeking to rent an apartment say that they are applying for rent subsidy, an excuse is found not to rent to them or the landlord increases the rent to cover the 15% tax which s/he should be paying anyway.

Housing Authority - The challenges faced by individuals seeking rental assistance, particularly the reluctance of landlords to accommodate those applying for rent subsidies, is a critical concern. To safeguard the interests of the tenants we have introduced the Private Rent Legislation whereby all contracts are registered and regulated with the Housing Authority. Through this initiative such instances where landlord resort to abuse are mitigated and in extreme circumstances prosecuted.

At the Housing Authority, we are dedicated to addressing such discrepancies. We will investigate these reported instances and work to ensure fair access to housing for all eligible individuals. Our goal is to promote a housing environment that upholds fairness and supports those in need.

5. A tax needs to be imposed on landlords who have vacant apartments. It is very unfair that many people are becoming homeless whilst others have the luxury of building more and more blocks of flats but can afford not to rent them out.

Housing Authority - We understand the urgency in ensuring housing availability for those in need. While the authority does not directly levy taxes, we acknowledge the importance of exploring policies to incentivise landlords to make their properties available for rent. Currently the Authority laid out several initiatives to encourage property owners to contribute to affordable housing, either through renting the property to the Authority, regenerate their property and put it on the market and other tax incentives.

Efforts are underway to assess and potentially implement other measures to thoroughly identify the number of vacant properties in Malta and that encourage the utilisation of vacant properties, thereby contributing to a more equitable housing situation in Malta.

6. Do you not think 175-225k is not an accurate representation of local average property prices in Malta? As first-time buyers these prices seem non-existent on the market.

Housing Authority - The property market in Malta has experienced significant changes, and certain segments might indeed reflect higher prices, making it challenging for new buyers to find properties within the stated range.

At the Housing Authority, we understand the importance of addressing the housing affordability issue. Through the First Time Buyers scheme, the Authority have obtained significant insights on the profiles and the pricing of the properties. With more than 3000 applicants, almost 50% of the properties were valued between €150,000 and €250,000 with more than 50% of the beneficiaries were single occupants. A detailed report will be issued in the coming days with further information about the interesting trends from such incentives.

7. Can you discuss the current government schemes that aim to aid first time buyers? How can these be improved? Many first-time buyers are facing issues with property prices being hiked up way over €200,000 and as a result face issues with paying the stamp duty. The alternative is to purchase a UCA property which are being manipulated by sellers to increase the price because they are UCA NO TAX.

Housing Authority - Various incentives and schemes are specifically tailored for First-Time Buyers which have to factor in considerations that prevent a subsequent price inflation. The Housing Authority itself offers a series of schemes which are available for First Time Buyers including the:
  • First Time Buyer Scheme – A €10,000 grant for first-time property buyers spread over a ten-year period when purchasing a property.
  • 10% Deposit Payment Scheme – For individuals aged 39 or less who are in a position to take a loan for their first property but have not yet saved the 10% value of the property not catered for in the loan. The Housing Authority acts as a guarantor in a personal loan for this amount, thereby enabling beneficiaries to purchase properties worth up to €225,000.
  • Grant on First Residence - Financial assistance to all first-time buyers to support to support finishing works carried out on a new property.
  • Social Loan Scheme – Aimed towards low-income earners who would not be in a position to finance a home loan on their own.
  • These are further joined by various schemes offered by the Maltese Government which include an exemption from Stamp Duty on the Purchase of Property and a Tax exemption on UCA properties and Properties in Gozo.

8. Has a scheme ever been considered by the Housing Authority where, in partnership with an NGO perhaps, young people who are willing to live-in with an elderly person or couple (who own their home) are vetted on some criteria and are then matched with the elderly who are willing to house young people? The young people would pay a very low rent or none at all; but then offer simple care, a sense of security or even just companionship to the elderly homeowners.

Housing Authority - An intergenerational living pilot-project is currently being implemented and monitored consistently by the Housing Authority in Collaboration with the Salesians in Malta. The results of this project could very much be applied on a broad spectrum to include initiatives such as this.

9. If we are saying that the quality of property available is lower than in the past, wouldn’t it be more correct to call it a degradation of the market rather than an “evolution of the market”?

Housing Authority - The Housing Market cannot be viewed in isolation and mirrors the demand and changing societies as well. By further diversifying our Housing Stock, we can ensure higher quality living and better match making between demand and supply.

10. Glad to follow this interesting discussion. What about the upkeep of the old social housing properties that need to be given due consideration. Installation of lifts and making accessibility for elder persons possible, particularly when mobility is difficult. At times this is done but when this is not possible, the family needs to be given priority in being given alternative, suitable accommodation.

Housing Authority - The Housing Authority has proved significant efforts and achievements made through our various initiatives within our social housing inventory, ensuring sustainability, improved quality of life, and respect for surrounding communities which include a Regeneration Programme over the past 2 years, covering 100 blocks, equating to 912 apartments. Regeneration activities encompass diverse aspects such as façade restorations, enhancing communal areas, upgrading electrical, water, and drainage systems, as well as the installation of lifts. These measures aim to modernise and improve the living conditions for our residents.

Accessibility and independent living are core values for the Housing Authority. Simultaneously with housing regenerations, an intensive lift installation program is being undertaken in older social housing blocks. While challenging, this initiative is essential for ensuring accessibility. Due to the considerable number of housing blocks requiring lifts, prioritisation is based on the specific needs of resident families.

The Authority also considers and facilitates the exchange of social housing dwellings for individuals facing accessibility issues. This approach aims to provide suitable housing arrangements that cater to the specific needs of residents.

These concerted efforts are directed towards ensuring that our housing infrastructure aligns with contemporary living standards, focusing on accessibility, sustainability, and improved quality of life for our residents. The commitment to modernise and adapt our housing inventory demonstrates our dedication to creating an inclusive and supportive living environment for all.