The objective of a census is to collect data to accurately inform decision-makers. The 2005 census identified 53,136 vacant properties in the Maltese islands; 24,295 units (45.7 per cent) of these were flats and penthouses, 13,872 were terraced houses and 9,857 were maisonettes. Most were identified as being in either a good state of repair or else as requiring only minimum repairs in order to be habitable.
Comparing the 2005 census with that taken in 1995, one notes that the number of vacant dwellings in the 10-year period increased from 35,723 to 53,136, up 48.74 per cent. Faced with such an increase in vacant dwellings a responsible government would have applied the brakes to the construction of residential units. In particular, it would have either reduced the land available for development or, as a minimum, it would have retained the status quo.
Faced with this information the Nationalist government, a few months after the 2005 census, ignored the results and instead increased the land available for development. It did this through three specific measures.
Firstly, through the rationalisation exercise it extended the limits of development in most localities. Secondly, it increased the permissible heights for development in a number of localities. Thirdly, it changed the rules for the development of penthouses. Instead of being constructed over a four-storey high building they could now be constructed over a three-storey building.
This has resulted in a further increase in the number of vacant dwellings, which have now been estimated as being in excess of 70,000. The results of the latest census are awaited with trepidation.
The 2005 census had identified that there were a total of 192,314 residential units on the Maltese islands. This means that the 53,136 vacant dwellings then identified amounted to 27.63 per cent of the housing stock.
The number of vacant residential properties in Malta and Gozo in 2005 was equivalent to seven times the size of Birkirkara, which, then, had 7,613 residential units. The number of vacant residential properties in 2011 is estimated to be even larger: nine times the size of 2005 Birkirkara.
This means that today approximately one third of the existing dwellings in Malta are vacant. Additionally, it signifies that expenditure for the development and maintenance of part of the islands’ infrastructure (currently servicing vacant properties) could have been avoided and instead channelled to maintain the infrastructure that services utilised properties. This applies to roads, public sewers and the networks distributing/servicing electricity, water, street lighting and telecommunications.
Millions of euros have been thrown down the drain to keep the construction industry happy.
In view of the above, when the construction industry boasts of its contribution to the gross national product one is justified in being sceptical. When a contribution to the economic development of the country is manifested in such negative results (thousands of vacant dwellings) one starts to question whether the GNP is in reality an adequate means of measurement.
The present crisis facing the construction industry is a unique opportunity for the government to embark on its inevitable and long overdue restructuring. The large number of vacant dwellings is the proverbial writing on the wall that does not require any special deciphering skills. The construction industry should be cut down to size in order to avoid further environmental damage and to channel part of its labour force towards activity of tangible benefit to the economy.
Restructuring will lead to a migration of jobs, especially those that do not require any particular skill. Offering retraining now to the unskilled segment would be an appropriate policy initiative. This would ease the social impacts of restructuring and facilitate the migration from one sector o another.
Now is the time to halt the development of uncommitted land. In particular, the rationalisation exercise of 2006, the relaxation of permissible building heights and penthouse regulations require immediate reversal.
A positive signal was forthcoming from the 2012 Budget through the introduction of incentives for the rehabilitation of village cores and protected buildings.
These incentives were first mentioned when the Rent Reform White Paper was launched in the summer of 2008. Unfortunately, the gestation period of this initiative was of elephantine proportions.
The availability of incentives to encourage the rehabilitation of the historic heritage in towns and villages is not enough. It must be coupled with an increased commitment to train on a continuous basis the required tradesmen and women who need to be at the forefront of this effort. The industrialisation of the construction industry over the years has been the cause of the loss of much skilled labour. It is time to halt the process.
This is the way forward. The economy has been toxically dependent on the construction industry for far too long. I look forward to the time when all this would be history.
A Happy New Year to all.
originally published in The Times of Malta – December 31, 2011