A financial surplus, yet an environmental deficit

As was expected, last Monday’s budget speech solemnly announced a budget surplus for the first time in many years. However, the environmental deficit was, as usual, hidden between the lines.

The budget is aptly titled Preparing for the Future (Inlestu għall-Futur). In dealing with environmental issues, the budget speech does not lay down clearly the path the government will be following. At times, it postpones matters – proposing studies and consultations on subjects that have been in the public domain for ages.

On the subject of vacant properties, the government prefers the carrot to the stick. In order to get dilapidated and empty properties in village centres back on the rental market, it is offering a €25,000 grant to renovate such properties, but then rightly insists that, once renovated these should be made available for social housing for a minimum of 10 years. In previous budgets, various other fiscal incentives have been offered to encourage such properties being placed back on the market.

After offering so many carrots, it would also make sense to use the stick by way of taxing vacant properties in situations where the owner is continuously ignoring the signals sent regarding the social, economic and environmental impacts of empty properties.

The budget speech announced improvements to rental subsidies. However, it then opted to postpone the regulation of the rental market. It announced a White Paper on the subject which, when published, will propose ways of regulating the market without in any way regulating the subject of rents. In view of the currently abnormal situation of sky-high rents, this is sheer madness.

It is fine to ensure that the duties and responsibilities of landlords and tenants are clearly spelt out. Does anyone argue with that in 2017? It should have been done years ago. Instead of a White Paper a Legal Notice defining clear-cut duties and responsibilities would suffice: there is no need to wait.

It is, however, too much to bear when a “social democrat” Finance Minister declares  that he will not even consider rent control. There are ways and means of ensuring that the market acts fairly. Other countries have done it and are still doing it, as rental greed has no preferred nationality. Ignoring this possibility is not a good omen. The market should not be glorified by the Finance Minister; it should be tamed rather than further encouraged to keep running wild with the resulting social havoc it has created.

This brings us to transport and roads. The Finance Minister sends a clear message when he stated (on page 44 of the budget speech) that no one should be under the illusion that upgrading the road infrastructure will, on its own, resolve the traffic (congestion) problem. Edward Scicluna hints on the following page of his speech that he is not too happy with the current situation. He laments that the more developed countries encourage active mobility through walking, cycling and the use of motorbikes, as well as various means of public transport, simultaneously discouraging the use of the private car. However, he does not then proceed to the logical conclusion of his statement: scrapping large-scale road infrastructural projects such as the proposed Marsa flyover or the proposed tunnels below the Santa Luċija roundabout announced recently by Minister Ian Borg.

These projects, like the Kappara flyover currently in its final stages, will only serve to increase the capacity of our roads. And this means only one thing: more cars on our roads. It is certified madness.

While the Government’s policy of increasing the capacity of existing roads through the construction of flyovers and tunnels will address congestion in the short term, it will lead to increased traffic on our roads. This moves the problem to the future, when it will be worse and more difficult to tackle. The government is acting like an overweight individual who ‘solves’ the problem of his expanding wasteline by changing his wardrobe instead of going on a painful but necessary diet.

This cancels out the positive impact of other policies announced in the budget speech such as free public transport to young people aged between 16 and 20, free (collective) transport to all schools, incentives for car-pooling, grants encouraging the purchase of bicycles, pedelec bicycles and scooters, reduction in the VAT charged when hiring bicycles as well as the introduction of bicycle lanes, as well as encouraging the purchase of electric or hybrid vehicles.

All this contributes to the current environmental deficit. And I have not even mentioned issues of land use planning once.

Published in The Malta Independent on Sunday – 15 October 2017

The rental markets

The liberalisation of the rental market over the years has not served its objective. Those who own property are still reluctant to rent out to Maltese tenants and the rental market is, albeit slowly, developing in such a manner as to mostly serve non-Maltese residents and ignore the locals.

I have no quarrel with non-Maltese residents renting residential property in whatever form or shape. The problem is, however, that as a result the high rents demanded have squeezed out of the market the small numbers of Maltese residents who, not having the means to purchase, must perforce rent out.

The rental market was dormant for over 60 years and was resurrected primarily as a result of the 2008 overhaul of rent legislation. It was a process that started with earlier amendments to the law in 1995. Unfortunately, there was no real preparation for the impact of its resurrection in the residential sector.  The end result was that the residential rental market is functioning in a warped manner, catering for the high (foreign) earners and ignoring those at the lower end of the scale: the low wage earner who lives from hand to mouth.

Malta and Gozo are being incessantly raped to produce more residential units, primarily for renting out to non-Maltese employees in the financial services and betting sectors that are mushrooming to benefit from favourable taxation rates. Yet the properties that can be rented out to the locals are being left vacant, as can be ascertained by an examination of the information published as a result of the last census.

Subsidies dished out by the Housing Authority may be of some help in reducing the resulting social pain. However, what is required is a radical overhaul that would place all vacant properties on the market. Ideally, this should be done through fiscal incentives that would encourage owners to shoulder their social obligations. A number of incentives have been or will be rolled out to encourage the rehabilitation of dilapidated property. The carrot will certainly function in a number of instances and a number of vacant properties will, as a result, return to the marketplace.

However, after the carrot has carried out its duty, it should be the turn of the stick. Properties vacant for a long time, say for more than 5 years (or some other reasonable length of time), should be taxed until they are put back to use. In such a small country we cannot afford to waste any of our scarce resources. Ensuring that this waste is avoided is everybody’s business.

published in The Malta Independent on Sunday : 22 January 2017

Local plans, and not regional

MEPA has embarked on a process which will lead to a revision of the seven existing  Local Plans. Five were approved in 2006. Two of them were approved earlier: the Marsaxlokk Bay Local Plan (1995) and the Grand Harbour Local Plan (2002).

With the exception of the Marsaxlokk Bay Local Plan (which regulates  Birżebbuġa, Marsaxlokk and their surrounding areas) all the Local Plans cover extensive areas. The Structure Plan, approved in 1990 and currently subject to revision, had identified the need for 24 Local Plans addressing urban areas, as well as other unspecified plans for Rural Conservation Areas. Initially when MEPA approved the Marsaxlokk Bay Local Plan it started along this path but then it opted for plans which are more regional than local in nature.

Local Plans are necessary in order that planning policy is appropriately applied at a local level where one can focus on practical considerations. Though there may be overlaps between Local Plans covering similar areas there will also be variations resulting from the specific nature of the different localities. There will be inevitable similarities between, for example, a Local Plan addressing Valletta and Floriana on one hand and another one addressing the Three Cities due to the fact that both contain vast stretches of fortifications.  However the planning issues arising may also lead to different considerations both in respect of what is to be prohibited as well as in what ought to be encouraged.

Local Plans are not neutral policy instruments. Departing from the common need to ensure a continuous maintenance programme for the fortifications (which programme is currently in hand)  Local Plans may explore different potential uses to which the fortifications in two completely different areas may be put. This would be dependent on the infrastructural services in the area  and on the impacts generated by the potential use  on the surrounding amenities and localities. It would be much easier to ensure that this is done through two separate local plans, one specifically addressing Valletta and Floriana and the other addressing just the Three Cities.

It is not just an issue of fortifications. The large number of vacant properties, currently totalling  over 72,000 cannot be addressed adequately at a regional level. Different policies and different targets have to be identified at a local level as both the causes as well as the extent of the problem vary from one locality to another.

Boundaries of a number of Urban Conservation Areas (UCAs) were substantially revised in 2006 on the understanding that it is better to limit the extent of a UCA to that which is necessary and essential. Consequently it should stand to reason that a smaller UCA is much better to regulate and monitor.

A number of vacant properties lie within UCAs as it costs much more to bring such properties to an adequate state compatible to modern standards of living. This is an area which has already been explored in the last years with various fiscal incentives being offered to encourage rehabilitaton and the reuse of such properties. Much more needs to be done. The revision of the Local Plans is another opportunity to re-examine the way forward in tackling the ever increasing number of vacant properties. The proposed policies must however be focused and local in nature as otherwise they will fail to have any impact at all.

As emphasised by eNGOs  the Local Plans should also be an opportunity to consider the integration of environmental policy and its applicability at a local level. Whilst all environmental policy is of relevance to our localities two particular areas easily spring to mind: air quality and noise pollution.

Both air quality and noise control standards can be undoubtedly upgraded if action is taken at a local level. Traffic generated is a major contributor to both. Heavy traffic through residential areas has to be reduced. If the Local Plans address this issue they will be simultaneously contributing to a better air quality and less acoustic pollution in urban areas.

From declarations made in the past weeks it is obvious that one of the controversial issues to be tackled, (most probably in a plan addressing rural areas) would be agro-tourism.  This is a very sensitive matter . If the point of departure is to seek to establish new development zones on the pretext of tourism than such proposals would be unacceptable. If on the other hand such a Rural Plan addresses the use of existing  agricultural holdings aiming to maximise the use of their existing footprint, provide a different touristic experience as well as  provide alternative or additional employment opportunities to our agricultural communities then there is room for considerable discussion.

The Local Plans to be produced will have an impact on our quality of life for the next ten years. It is hence imperative to not only ensure a high level of participation in the consultation process but that the resulting proposals are given due consideration.

This article was published in The Times of Malta, Saturday August 10, 2013