Editorial: Home-anchored opportunities

A study published by tenants’ union Solidarjetà on the rental market revealed worrying trends of a crisis looming, not only on a human scale but also a macroeconomic one.

The human aspect was staggering in its conclusions: assuming that rental costs should not take up more than 25 per cent of income, the study found that “alarmingly, even individuals earning €35,000 or €40,000 frequently cannot afford the medium rent, even in the cheapest localities”.

The 88-page report went through 38 different scenarios covering incomes and dependencies and, in far too many cases, prospective tenants were forced to share a property and even a room. Only in three scenarios could tenants afford the median property.

The report described the criterion for eligibility of the housing subsidy as being seemingly “out of touch with the reality on the ground”.

In some cases, tenants do not even qualify for the scheme – and the study does not only look at people earning a minimum wage but even households earning €40,000. Having said this, even with the subsidy, many tenants cannot pay the rents in many of the localities.

The report delves into the Housing Authority’s threshold of 25 per cent: Eurostat defines those who spend more than 40 per cent of their disposable income on rent as being ‘overburdened’. The implications – the sacrifices and compromises involved – should make us blush.

The union made eight recommendations to solve this issue – all of which merit discussion at the very least.

These include the introduction of rent controls such as temporary rent freezes and limits on the frequency of rent increases. They also push for incentivising long-term contracts – less than seven per cent of contracts were renewed past a year.

But it is not only about the number of people who are left with no options but to share, or even whether the housing subsidy is high enough.

There is the unescapable argument about the long-term impact of high rents, as these trap tenants who would otherwise save up to buy their own properties, with all this means for the property market.

There is also a bigger picture: most of those who come to Malta from overseas – around 170,000 at the end of 2024, according to the National Statistics Office – come here to improve their standard of living.

Many come to earn more than they would at home so they can send money to their family. Even a cursory look at statistics shows in no uncertain terms that the economy depends on them, from the services they offer –caring to hospitality to cleaning – to their value added in financial services, gaming, IT and so on.

If fewer came to Malta, would the economic boom slow down – and with the next general election looming, how would this impact voters and the money in their pockets?

Last November, a Central Bank of Malta discussion paper warned that nearly a third of foreign workers leave Malta within a year, and that half leave within three. 

It warned that “long-term success will depend… on embedding them into a more stable and productive labour force” – and housing affordability was one of the metrics identified.

This report highlights the difference between inconveniences like construction and traffic and issues that influence life decisions.

The Nationalist Party called for stakeholders to “seriously examine solutions so that everyone can once again live with dignity”.

This is not just about slogans but an existential decision.

Solidarjetà representative Johanna Axisa MacRae said it clearly: “a roof over your head is an essential, not a luxury”.