Nimmansaw is-suq tal-kera

Il-ġimgħa l-oħra 17-il għaqda, prinċipalment attivi fil-qasam soċjali, ippubblikaw dokument importanti intitolat “A Proposal for Rent Regulation in Malta” dwar dak li għandu jsir biex is-suq tal-kera jkun immansat. Dan id-dokument jipproponi li s-suq tal-kera jkun regulat u dan f’kuntest fejn dak kollu li għandu x’jaqsam mal-propjetá f’Malta tħalla jimxi għal riħu għal ħafna snin. Bosta approfittaw ruħhom minn dan u stagħnew inġustament, xi drabi minn fuq il-miżerja ta’ ħaddieħor.

Wasal iż-żmien għal ftit sens ta’ ġustizzja fis-suq tal-kera. Dawk vulnerabbli, bla ebda dubju l-iktar li ntlaqtu mir-rebus li ilu jiżviluppa prinċipalment mill-2008, ilhom jistennew li l-kuxjenza soċjali tal-pajjiż tagħti ftit kaz tas-suq tal-kera.

Il-ħolqien ta’ xibka soċjali, anke fil-qasam tal-kera, huwa prinċipalment responsabbilitá tal-Gvern. Il-Gvern jagħmel dan mhux biss billi jipprovdi oqsma residenzjali affordabbli għal dawk l-iktar vulnerabbli imma fuq kollox billi jiffaċilita l-aċċess għal suq tal-kera mmansat, jiġifieri suq relattivament ħieles imma suq li fl-istess ħin jkun wieħed ġust. Suq immansat hu wieħed li jopera f’parametri ġusti stabiliti mill-liġi: suq raġjonevoli għas-sidien imma ġust ma kull xorta ta’ inkwilin.

Il-mudell propost mill-koalizzjoni ta’ 17-il għaqda huwa bbażat fuq numru ta’ konsiderazzjonijiet bażiċi: id-dritt fundamentali għal post fejn toqgħod, id-distinzjoni ċara bejn id-drittijiet u d-doveri ta’ sid il-kera u l-inkwilin li t-tnejn għandhom dritt għal serħan il-moħħ, li jkun iffaċilitat is-suq tal-kera għall-kirjiet fit-tul, id-dritt tas-sidien li jistabilixxu l-kera inizzjali u l-mod kif din tkun varjata imma dejjem fil-qafas tal-parametri regolatorji intiżi biex jistabilixxu qafas ġust, kif ukoll li jkun iffaċilitat id-dħul fis-suq tal-kera ta’ propjetá presentement vojta għal diversi raġunijiet.

Id-dokument hu qasir ħafna, kull ma fih hu 12-il paġna. Imma hu mimli bi proposti li huma kemm validi kif ukoll li jħarsu fit-tul.

Hu pożittiv li s-Segretarju Parlamentari għad-Djar Roderick Galdes, li presentment qed jagħti l-aħħar irtokki għall- White Paper dwar is-suq tal-kera, meta kien qiegħed jiltaqa’ ma rapprezentanti ta’ dawn is-sbatax-il għaqda indika li, b’mod ġenerali, hu kien f’sintonija mal-għaqdiet fil-ħsieb tagħhom li jinbena mill-ġdid suq tal-kera li jkun jista’ jopera f’limiti ġusti u raġjonevoli.

Roderick Galdes, professjonist dwar l-ippjanar tal-użu tal-art, qiegħed f’posizzjoni unika bħala riżultat tal-esperjenzi inter-dixxiplinari tiegħu, li jassigura li l-politika dwar id-djar tidħol gradwalment fis-seklu wieħed u għoxrin wara li għal madwar tmenin sena kienet miżmuma milli tiżviluppa. Id-dikjarazzjoni tiegħu hi sors ta’ tama għal bosta li wara kollox hu possibli li suq tal-kera immansat jista’ jipprovdi kera ġusta.

Il-proposta fil-qalba tad-dokument tas-sbatax-il għaqda hi dwar il-ħtieġa li l-kirjiet ikunu kollha regolati minn ftehim li jsir bil-miktub. Dan il-ħsieb hu motivat mill-ħtieġa li d-drittijiet u l-obbligi kollha jkunu mfissra b’mod ċar u b’hekk jassigura l-kontroll tal-abbużi kontinwi, kemm mis-sidien kif ukoll mill-inkwilini. Fit-tfassil tal-proposti tagħhom il-koalizzjoni tal-għaqdiet għarblet l-esperjenzi ta’ diversi pajjiżi Ewropej, fejn (ġeneralment) jeżisti suq tal-kera b’saħħtu li hu ukoll wieħed ġust.

Alternattiva Demokratika ilha s-snin tħeġġeg dwar il-ħtieġa ta’ suq tal-kera b’saħħtu għax dan hu kemm ħtieġa soċjali kif ukoll ħtieġa ambjentali. Il-ħtieġijiet soċjali jkunu ndirizzati meta naqbdu t-triq li trid twassalna biex nassiguraw li d-dritt bażiku għal residenza diċenti jkun imnaqqax fil-liġijiet tagħna, kif ukoll applikata fil-prattika. Imma dan iwassal ukoll għal tnaqqis tal-impatti ambjentali tal-industrija tal-kostruzzjoni billi kemm-il darba jkun possibli li l-kera tkun waħda ġusta tonqos konsiderevolment il-pressjoni biex tkun żviluppata iktar art verġni, kif ukoll il-pressjoni fuq iż-żona ta’ konservazzjoni urbana u l-bini protett.

Alternattiva Demokratika taqbel b’mod ġenerali mal-proposta tal-għaqdiet. Sadanittant nistennew il-pubblikazzjoni tal-White Paper dwar ir-riforma tas-suq tal-kera u bla ebda dubju ser nieħdu sehem fid-dibattitu nazzjonali dwar is-suġġett. Għax wasal iż-żmien li s-suq tal-kera jkun immansat.

 

Ippubblikat fuq Illum : 4 ta’ Marzu 2018

 

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Taming the Rental Market

The policy document entitled “A Proposal for Rent Regulation in Malta” published last week, has been endorsed by 17 NGOs that are mostly involved in the field of social action.

It is a proposal for rent regulation in a situation where everything concerned with property in Malta is spiralling out of control and has been in this state for a number of years. In the process, many have made lots of hay while the sun shone, frequently at the expense of vulnerable people.

It is about time that a sense of justice is restored in the rental market, and the sooner the better. The vulnerable – undoubtedly the hardest hit in the post 2008 free-for-all – have been patiently waiting for the country to listen to its social conscience regarding the rental market.

The creation of a social safety-net, even in rental matters, is primarily government’s responsibility. The government fulfils this not only through the direct provision of affordable housing to the most vulnerable, but also by facilitating access to a tamed rental market to the rest – a market which ought to be relatively free but fair at all times. A tamed market operates within reasonable and just limits: reasonable for landlords but also for a wide range of tenants.

The model proposed by the 17 NGO coalition is founded on a number of basic considerations: the fundamental right to a home, a clear demarcation of the rights and duties of landlords and tenants – both of which have the right to peace of mind, enhancing the long-let rental market, recognising the landlord’s right to establish the initial rent and its variation within a fair regulatory framework and incentivising entry into the rental market of property that is currently vacant for a variety of reasons.

The document is short and very brief, being just 12 pages long, yet it is brimming with far-reaching proposals.

It is encouraging that, when meeting representatives of the 17 NGOs, Parliamentary Secretary for Housing, Roderick Galdes – who is currently applying the finishing touches to a long-awaited White Paper on the Rental Market – indicated that he was generally on the same wavelength in seeking to reconstruct a rental market which operates within acceptable and socially fair limits.

Thanks to his inter-disciplinary experiences Galdes, a land-use planner by profession, is in a unique position to ensure that housing policy moves gradually into the 21st century after having been restrained for the past 80 years or so. His declaration is a source of hope to many that affordable housing can co-exist with a tamed rental market.

The central proposal of the NGO’s document is the need to ensure that all leases are drawn up in writing. This proposal is motivated by the need to clearly spell out rights and duties of both landlords and tenants, thereby ensuring that any abuse (by either) is, if possible, nipped in the bud. In their proposals, the coalition of NGOs drew on the experience of a multitude of other European countries where a healthy and (generally) fair rental market has been in existence for years.

For years, the Greens in Malta have been advocating the need of a healthy rental market, as this is both a social and an environmental necessity. Addressing the social necessity will ensure that we embark on the road which will lead to ensuring that the basic human right to having a decent home is entrenched in our laws and, hopefully, meticulously applied. This will also lead to a reduced environmental impact of the part of the construction industry, as the adequate development of a fair rental market will eventually decrease development pressures on virgin land as well as on urban conservation areas and protected buildings.

Alternattiva Demokratika – The Green Party is generally in agreement with the NGO Coalition’s proposal. We look forward to the publication of the White Paper on the reform of the rental market and will definitely be actively participating in the ensuing national debate.

Taming the rental market is a long overdue objective that should be relentlessly pursued.

published in The Malta Independent on Sunday – 4th March 2018

Greening Housing Policy

 

published on Sunday, September 21, 2008

by Carmel Cacopardo

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The social objectives of housing policy can and should be attained without causing further damage to our urban fabric and natural environment.  Housing like all other areas of policy should be compatible with the environment, otherwise it should be seriously re-examined.

 

Over the years, in the absence of a rental market (for most) home ownership became the only manner in which they could acquire a home. As a result today around 70% of Maltese families reside in owner occupied residences. The reform of rent legislation currently in the pipeline will introduce an alternative through the reassembly of a rental market. Over time this should ensure that it is once more possible to live in a reasonable and decent home without being its owner. A forty year mortgage could be history for the upcoming generations.

 

Ensuring that each and every one of us has decent accommodation  housing his family is a social need, but the decision as to whether to own a residence is not. It is an investment decision which in a great number of cases is today subsidised through the taxpayer’s pocket under the guise of social policy. This distinction has not been made easy by a sixty year inertia in reforming rent legislation. 

 

With at least 60,000 vacant properties at hand there is surely no social need to build more dwellings except maybe to justify the existence of the construction industry which currently employs some 11,500.

 

The rent reform White Paper rightly points out that whether one rents or purchases a residence is an economic choice. Although such a statement is theoretically possible, at this point in time no choice is available.

 

In the absence of a rental market, home ownership has for years been the focal point of housing policy. Public monies have been used to construct housing estates containing hundreds of dwelling units whilst at the same time at least 60,000 vacant dwellings have been allowed to accumulate. In the long term this is the situation which the rent reform exercise will have to address.

 

The process will be slow and painful. It will reverse past injustices. It will however inevitably create new pains as well as new gains.

 

The community will be a net beneficiary as in the long term there will be less building construction going on while it is hoped that no more agricultural land will be taken up. The pressure for demolition of old properties should dwindle. Vacant properties may at last generate a decent income for their owners.

 

In order to survive the construction industry will have to commence a restructuring exercise. A larger part of it will have to shift from construction works to the rehabilitation of dilapidated properties as well as participating in a much needed urban regeneration. There will be a demand for skills which are not sufficiently available today. The traditional building trades will be highly in demand, slowly at first but at an increasing rate subsequently. Sufficient time is available for retraining in order that the shift causes the least pain possible in the employment sector.

 

The rent reform currently in the pipeline is the first step in the inevitable greening of housing policy. It will tackle the most obvious environmental deficiency of social policy in Malta and it will in the long term prove that it is possible to attain the highest level of social standards in housing policy and at the same time observe all environmental norms of modern society.

 

Other steps will necessarily follow.  If one pays rent at commercial rates it will be logical to seek smaller residences thereby reducing the rental bill by doing away with unnecessarily large homes. Coupled with the diminishing size of the typical Maltese family this will lead to an increased mobility of the family unit, moving from a small dwelling on its formation, to a larger one when additional space is needed and possibly back again to a small residence in old age.

 

These practical consequences in addition to an effective moratorium on large scale building construction would result in a reduction of the expense required in running a decent home. This saving would be primarily in the energy costs which could be reduced substantially through the use of smaller residential units.

 

In an article published by Joseph Darmanin in the BOV Review entitled The Computation of a Housing Affordability Index for Malta  in the Spring 2008 issue  it is concluded that first time buyers are gradually being pushed out of the housing market. Housing affordability is presently linked to purchasing of property, as a rental market is practically inexistent at the lower end of the scale. Housing affordability is gauged by comparing the Housing Price Index with the disposable income. It resulted to Joseph Darmanin that in 2007 the median house prices were 8 times the average per capita income whilst in 2000 they were just 6 times the average per capita income. This leads to the conclusion that over the past eight years it has become less affordable to purchase a property. At the lower ends of the scale the pinch is felt sufficiently to be able to pose the question as to whether the whole “home ownership policy” at the forefront of housing policies for the past 25 years is sane.

 

There are no easy answers to obvious questions which everybody has been evading for so long.

 

The are obviously two options.

 

The first is more of the same insane home ownership politics as a result of which we may end up with banks dishing out home loans repayable over 60 years or more such that it will be possible for our children to inherit a mortgage in addition to a home!   With the spiralling cost of property and more of the same this will be the inevitable result.

 

The alternative is to abandon home ownership as a social policy tool and substitute it with a policy of assisted rent. Those who cannot afford to buy their home should not be forced to. They have the right to an alternative.

 

Rent reform if adequately tackled can provide the solution. Those who cannot afford to own their own home can be assisted to rent a suitable residence: suitable for their needs. There is no need for a large three-bedroomed flat at the taxpayers expense for a newly wedded couple: a one-bedroomed one would be sufficient initially.  Subsequently they can move on depending on their real needs.

 

I am aware that this runs contrary to the manner in which housing politics has developed over the past 60 years. The state has always been expected to provide for all. In reality it cannot, never has and should not be expected to. Rent reform paves the way for a role of the private sector to place on the market properties which can be rented out. The properties required are available. The only heavy investment required is in goodwill! Financial outlays required will in the long term be significantly lower than those made available to date, and most probably with better results.

 

This will lay the foundation for housing policy to commence on the path of sustainable development. Social needs will in this manner be satisfied through a respect for environmental norms.

Interweaving Social and Environmental Policy

published on Sunday July 13, 2008

by Carmel Cacopardo

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Rent reform brings to the fore two very important issues: social policy and sustainability. On the one hand is the delicate balance between property rights and social justice, on the other is the need to use land resources sustainably in the interests of present and future generations.

AD has been campaigning for rent reform for years. In 2006, as part of its Rent Reform Campaign, AD published a document entitled Rent Reform: A Declaration of Principles in which it emphasised that rent reform should be all-embracing and not limited to legislative proposals. Rent reform requires buttressing by adequate housing policies in order to ensure that government creates the required environment that is so necessary for the development of a healthy rental market. A healthy rental market that matches the supply of residential property with demand will reduce the urge to take up more virgin land for so-called development, as existing demand can be successfully met from the stock of vacant property.

Through the removal of unnecessary shackles, rent reform aims to use the market to provide a decent home for everyone in the full knowledge and respect of mutual rights and obligations. It should be clear to one and all by now that while everyone has the right to a decent dwelling, this does not equate to home ownership. Unfortunately, this is what has happened in the past quarter century.

As the recently published White Paper rightfully emphasises, whether one purchases or rents a property is an economic choice determined by what is currently available on the market. In the past 60 years the rental market has been distorted and not permitted to develop. Instead, the state, through its organs, assumed the functions of a property developer. While the state built housing estates, gobbling up virgin land, it established a pattern of behaviour to be followed by so-called developers. The end result is 53,000 vacant properties as in November 2005. Some would say it is closer to 70,000 now. It is difficult to obtain a worse certificate than this to attest to the mis-management of our built up property!

The White Paper, entitled The Need for Reform. Sustainability, Justice and Protection, is not the end of the story. It is just the end of the beginning, hopefully marking the political decision to act! It seeks to redefine the legal framework within which the rental market will be permitted to develop in the immediate future. Through a set of transition periods it will slowly dismantle the barriers set up over the years that limit the access of owners to their properties. The pace of the transition is undoubtedly not acceptable to all. Some wish to see it move faster; others consider it as already being too fast.

The manner whereby leases are only inherited in specific and predetermined circumstances is the central proposal of the White Paper in relation to residential leases. The White Paper limits the inheritance of leases to three instances. The first instance is the case of the surviving spouse, the second is that of the tenant’s offspring and the third instance is that of parents aged over 60. In the first instance, no changes are being proposed to current legislation. In the latter two instances, the White Paper limits this right as a one off occurrence in respect of those who, on 1 June 2008, had been residing with the tenant for five years or more. All other cases not falling within these parameters will, in terms of the White Paper, be entitled to a transitional five-year lease on the basis of paying the market rent. Subsidies by the state to assist those who cannot afford this will be available through reinforcing existing rental aid schemes administered by the Housing Authority.

The White Paper rightly introduces into the equation the economic worth of those who would inherit the lease. Those who are entitled to inherit a lease but earn in excess of €25,000 per annum, or have an economic worth in excess of €125,000, will have to shoulder the expenses of their own accommodation. Subject to a temporary and transitional lease of three years’ duration at a rental value determined at three per cent of the value of the property, the White Paper reasonably recommends that in such cases the right to inherit a lease will not be operative.

The point of contention with all this is that government is limiting itself to the civil rights of the traditional family, ignoring the fact that society in Malta is not static and has developed alternative families. At the time of writing, a news item is emphasising that one out of every five births in Malta in 2007 took place outside wedlock. That is 20 per cent. It implies alternative families, in particular single-parent families as well as unmarried couples who are cohabiting.

The White Paper thus limits itself to traditional definitions of the family, ignoring in the process alternative family units made up of unmarried couples, single parents or same sex couples. Pointing this out and taking a definite stand in favour of the civil rights of alternative families does not mean taking a contradictory stance on the proposed rent reform: insisting on the removal of restrictions on the one hand and promoting further restrictions on the other. It means that rent reform also has to take note of the social realities of this country and should ensure that, in its determination of the civil rights of tenants, no section of the Maltese population should be discriminated against. In this particular aspect, the White Paper proposes an ostrich-like social policy. It seems that, just like the ostrich, the authors of the White Paper believe that if they ignore the emerging social realities they will disappear. In fact they are continually on the increase. These are not new rights but existing rights that are as yet unrecognised by the Maltese state. In this respect, the White Paper needs to tune in to the realities of Maltese society in the 21st century.

In dealing with commercial leases, the White Paper is very generous with the current pre-1995 tenants. It proposes a maximum 20-year transition period, which I think is excessively long. Such a long transition period gives elbow room to those who would undoubtedly be urged at some point in time to turn the clock back 60 years. The shorter the period, the better: 10 years as a maximum transition period would, in my opinion, be more than enough.

Those who own properties let to band clubs will undoubtedly not consider the White Paper acceptable, as it does not address their problem. In fact, the White Paper places the issue of property let to political parties, band clubs, sports clubs and other organisations considered of a social nature outside its parameters. Minister John Dalli has publicly clarified that government intends to address these issues, hopefully through the same initiative as the rest of the rent reform process. This is another headache yet to come. But it is no use discussing these issues in a vacuum. It would be best to postpone comments until such time as specific proposals dealing with them are presented for public consultation.

On the whole, the proposals put forward by the White Paper on Rent Reform should result in the interweaving of social and environmental policy. Through ensuring that the market works without undue interference, with government functioning as a regulator instead of assuming the role of a market basher, a developed rental market can in time mop up vacant properties, thereby reducing the need for the large scale “development” that has turned the Maltese Islands into one large building site.

When considering the above, AD is of the opinion that, overall, the White Paper is a positive exercise that aims to reach a reasonable balance between different interests in civil society. If government takes serious note of all the alternative proposals that will be announced in the public debate, its proposals may be substantially improved. AD is willing to act as a social and political partner in order to ensure a reform that is sustainable in social, economic and ecological respects.

Carmel Cacopardo is an architect and civil engineer and spokesman for Alternattiva Demokratika on sustainable development and local government.

 

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You may also view the following posts in this blog. They discuss the Rent Reform White Paper  :

https://carmelcacopardo.wordpress.com/2008/07/01/riforma-fil-ligi-tal-kera-l-ewwel-reazzjoni-ta-ad/

https://carmelcacopardo.wordpress.com/2008/07/01/the-rent-reform-white-paper/

https://carmelcacopardo.wordpress.com/2008/07/08/cleaning-up-the-mess/

Cleaning up the mess

 

published Tuesday July 8, 2008

by Carmel Cacopardo

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Over the years governments could not be bothered with rent reform. The resulting mess is such that the purposes of rent reform at this stage is primarily one of restoring sanity in the use of built-up resources. The White Paper aims at removing the accumulated injustices faced by generations of landlords, without creating new ones, and paves the way to reduce the perceived need to embark on more so-called development.

As aptly pointed out by the White Paper, the decision whether to buy or to rent is an economic choice depending on whether the annual rental value of a property is more attractive than the cost of purchasing property. This is an issue for the market to resolve over a period of time. To date the state has repeatedly intervened, strangling the rental market, encouraging home ownership and thereby putting on high gear the rape of our countryside and village cores. Rent reform is thus not just concerned with the rights of landlords and tenants but with housing policy, sustainable development and social and environmental justice.

A useful point of departure in this discussion is that throughout the years, primarily as a result of the maze of rental legislation, it has been next to impossible to distinguish between the right to accommodation and the right to own a home.

The concept of home ownership as successfully marketed by different governments and skilfully manipulated by the construction industry is considered a right.

The result is that our families are burdened with mortgages spanning a lifetime for properties which rather than providing them with a home are providing them with an investment which most can ill-afford but yet are forced to have.

The net beneficiary is the building industry, which as a result of this artificial demand keeps on churning out residential units at increasing prices and reducing sizes, at the end pleasing no one but themselves and the banks!

The state through the Housing Authority (and its predecessors) is the major culprit in this respect. Throughout the years political parties viewed the concept of home ownership as the means through which to make good the vacuum created by rent legislation, which was patched up in time of emergencies and has thereafter been retained as a permanent relic of these emergencies.

The White Paper entitled The Need For Reform. Sustainability, Justice And Protection, seeks to reverse all this. It attempts a solution through 33 recommendations most of which are valid and should be supported.

They are, however, underpinned by three issues which merit some discussion.

Firstly, there are too many perceived exemptions.

The separate consideration of agricultural leases may be valid. But this has to be considered within the context of a detailed examination of the agricultural sector, including measures required to halt the further sub-division of agricultural holdings. The party in government had tackled this issue in an electoral manifesto presented for the 1981 general elections. It needs to be revisited urgently and simultaneously with an examination of agricultural leases.

The White Paper is also not applicable to political parties, band clubs, sports clubs and other organisations of a social nature. Social Policy Minister John Dalli has clarified that this area of the rental market will be liberalised too, although they are not covered by the White Paper recommendations.

As long as the issue of rent reform applicable to agricultural property, political parties and other organisations is also tackled in the same spirit found in the White Paper there should not be any difficulty with its acceptability.

The second issue is an anachronism in that the White Paper selects the traditional family as worthy of social protection and dumps emerging relationships. This ostrich-like social policy ignores cohabiting couples and same sex couples. I have no difficulty in subscribing to a policy of reinforcing and defending the traditional family but I find it reprehensible that those who select an alternative lifestyle are dumped as not being worthy of the same civil rights as the rest of us.

Thirdly, the White Paper creates transitional protective periods which are too long. The 20-year transition period for commercial leases, in particular, could easily be halved. This would reduce the urge of those who could be tempted to lobby for a reversal of the proposed reforms.

Barring the above, the White Paper is positive and presents a reasonable proposal on the basis of which a reform of rent legislation can be carried out. If the government takes serious note of all the alternative proposals that will be announced in the coming weeks, the White Paper recommendations may be substantially improved.