Greens urge government to ‘stick to its guns’ on affordable housing project

Updated 3.45pm

ADPD has urged the government to “stick to its guns” on a state-church initiative to build 260 affordable homes in the face of criticism from developers and the Opposition.

Last month, the Foundation for Affordable Housing (FAH), a joint government and Archdiocese venture, announced plans to build 260 new housing units that will be sold to qualifying members of the public at 30 per cent below the market price.

The proposal drew criticism from the Malta Development Association (MDA), which said the project risks destabilising the property market and called for the plans to be abandoned.

The MDA said that the cost of land usually accounted for around 60% of the property’s final value, arguing the affordable housing developers would earn roughly 30% more from the project than on typical developments.

In a statement Friday welcoming the initiative, however, ADPD chairperson Sandra Gauci called the initiative “an innovative first attempt as a result of which housing subsidies do not end up in the pockets of the developer”.

She said the party was therefore “not surprised at MDA’s reaction nor are we surprised that the Nationalist Party came out supporting the pro-speculation position adopted by the MDA”, in seeming reference to a Facebook post by PN MP Albert Buttigieg.

On Wednesday, Buttigieg said he agreed with the MDA’s criticism of public land being given to project developers for free, calling the provision a “neat move because everyone knows that the land is worth much more than 30% of the total cost/subsidy”.

The PN told Times of Malta that Buttigieg’s statement reflected the MP’s private opinion and not the position of the party.

“It would have been much better if the Government had built these apartments itself and given the subsidy on them as was done in the past”, said Buttigieg.

Gauci said the PN's position showed it had “either not gone into the details of the initiative or are just trying to ride the MDA’s bandwagon”.

ADPD secretary general Ralph Cassar said the MDA wanted “more speculation and huge profits at the expense of public coffers. It seems that even the Nationalist Party wants this”.

"Contrary to the MDA and the Nationalist Party, we hope that this initiative continues to grow to such an extent that it stabilises the property market and actually discourages speculation”, he said.

He said the party supported the Foundation for Affordable Housing, the government and church and “urge them to stick to their guns”.

“It should by now be obvious to everyone that the usual initiatives such as subsidising first time buyers by successive governments have not worked out as they have only fuelled speculation, with prices shooting up to match government subsidies.”

The party called for the creation of housing associations and cooperatives, “which can further reinforce this FAH model”.

“The more initiatives there are to counteract the savage property market the better. Whatever the MDA and their consultants say.”

The MDA’s Estate Agents Section on Friday insisted the government “should develop the land itself and sell the units directly”.

In a statement, the EAS said government-owned land “should be managed transparently, and in a manner that safeguards public trust” ensuring the best outcome for the market and tax-payers.

They added that if private developers were involved, the process should be managed through a public tender, “giving all interested parties, including those who have already expressed their interest, such as the MDA, an equal opportunity to participate.”

They cautioned that any housing scheme “must avoid creating distortions in the market or unintended incentives that could undermine fairness and transparency”.