Times of Malta, 26 November 2018
In my article last week, I explained that while Malta has a high home-ownership rate, the country is also currently experiencing prohibitive housing prices, resulting in an increasing number of evictions, young people who remain living with their parents and persons living in subhuman situations.
At the same time the wages of many people tend to remain depressed and cannot catch up with the increase in housing prices.
I also commended the government for setting the ball rolling through its White Paper on property rentals, but I emphasised that Malta also needs immediate solutions to assist the growing number of people who are facing immediate hardships in their everyday life.
Indeed, a prevalent class structure in Malta seems to be characterised by one’s home ownership or lack of it.
One can argue that Malta’s current housing disparity is collateral damage from a government that ran too fast with its economic policies without a sustainable plan. Opening the doors to runaway economic growth requires planning, as otherwise it would be akin to driving a car without brakes at top speed.
Even if the government had the best of intentions in its economic policy, it was unwise to disregard the possibility of unintended consequences such as the ones mentioned above.
During the recent commendable White Paper seminar co-organised by the Parliamentary Secretariat for Housing at the University of Malta, several questions were asked from the floor which deserve sober analysis and replies from the government.
For example, can all research which was consulted by the authors of the White Paper be published? This is imperative for evaluation by scholarly peers who were not involved in the drafting of the White Paper.
I have no doubts that the authors of the White Paper are qualified and good intentioned, but the policy sphere requires objective peer review of evidence to make sure that what is being analysed is reliable and valid and to highlight possible gaps.
Another question dealt with Malta’s population numbers. Is the White Paper based on real current numbers? Could it be the case that both population numbers as well as numbers of people undergoing housing hardships are bigger than what is officially published?
Incidentally, the recent statement by the National Statistics Office that it miscounted Malta’s population by 20,000 was quite timely. Again, I do not doubt the rigour of NSO professionals, but I invite the government to also conduct other forms of research – including qualitative - to verify population realities.
Third, the current government mantra is that rent prices have stabilised. Could this be elaborated upon? As this is not what people on the ground tell you.
Fourth, what is the government doing for the increasing number of people who are being evicted and who have no dignified alternative? To these one must add all those who have not yet been evicted but are highly concerned that it will soon be their turn as they simply cannot afford the prohibitive prices they are being told to pay.
Surely, these people are not experiencing the best of times. And from what I am seeing, the Housing Authority does not have enough resources to cope with the influx of such cases, despite the best of intentions of its staff.
Fifth, what is the government doing for the army of young middle-income persons who cannot afford rent and who won’t be given bank loans? Their numbers are hidden in home ownership statistics, but the fact is that they have no option but to keep living with their parents to avoid sub-standard housing such as sharing of rooms.
Another question dealt with price caps on rented property. At face value they might look positive for tenants, but again, they may have unintended consequences.
In such a scenario, property owners may decide to withdraw their property from the rental market, thus reducing supply and consequently increasing prices of properties available on the market, unless new properties enter the market to compensate for such shortages. In this regard, the protection of landlords – not all of whom are rich – is important too.
So, what can be done to assist poor, low- and middle-income earners who do not own property and who are finding it impossible to buy or rent decent housing? I will discuss this in my next article.