The rapid growth experienced in the past decade has seen the state guarantee improved access to goods and higher quality services, as well as raising the general standard of living.
Such growth, combined with the increase in net population and economic activity has, as expected, put strains on the physical and social infrastructure of the country.
The question of access to affordable, adequate housing is the subject of perennial discussion which has intensified in the past years. This is largely due to a more accentuated decoupling between the rates of growth of property prices and median income.
This phenomenon widens the gap between those individuals who have the financial capacity to penetrate the property market without the need
of any (state) assistance, be it by buying or leasing, and those who are not financially deprived enough to be eligible for social housing but still lack the capacity to tap into the open market unaided.
After reanimating the social housing building programme which provides for the largely deprived, the state, through the Housing Authority, intervened to fill select market gaps.
This was first done by the introduction of a housing benefit for those who rent in the private residential market and then by home-ownership assistance schemes.
In trying to achieve different aims, such interventions have one thing in common: they are all demand-focused, in that they all aim to bridge the gap between the buyer or tenant’s financial capacity and the market price.
In a world dictated by the rules of demand and supply, the current development trends prompt the public to question the claim that it is a lack of supply which results in unaffordability among certain segments in the property market. However, in the face of increasing demand, with its diversity of needs, the local market is inflexibly producing the same kind of supply. This leads to a mismatch between the actual demand and the supply, to the detriment of a certain category of households.
We know that the category who are financially stretched – those roughly within the income brackets of €12,000 to €24,000 per annum – is broad and expanding. However, although there are indications of the different profiles that constitute this category, there is still a need for accurate data on its extent.
The Affordable Housing Foundation is a newcomer in the local property market, prepared to supply adequate solutions for this expanding category of people. Doing so would raise the standard of living of many, empowering them to move forward while narrowing the social and material divides common to urban cores experiencing rapid growth.
The distinctive approach of the foundation lies in its disposition to intervene on the supply side of the property market. It intends to be a catalyst by engaging in widespread open dialogue and reaching out to collaborate, so as to create the right environment for an affordable market to become both feasible and appealing.
The Affordable Housing Foundation will set a mark of sustainability – both environmental and financial. Built on two pillars – supply and policy influence – it will thrive on information and innovation.
Affordable housing is part of the vision of quality sustainable growth- Jake Azzopardi
It will pursue its own projects while also engaging with stakeholders and driving the policy changes necessary to spawn new affordable-housing solutions. It shall seek new financing methods, both local and international, to fund programmes and projects and to promote new housing models.
Creating affordable housing does not mean stifling investment in the property market but it allows room for different players to participate.
Indeed, the long-term vision is to democratise the local real estate market by setting up opportunities for smaller investors through affordable-housing programmes.
In getting there, there are significant opportunities lying in vacant or underused properties across the country which can fit the residential needs of many living in less-than-optimal circumstances.
The foundation aims to build a coalition for affordable housing composed of an array of public and private actors to activate dormant opportunities and trigger change.
The Affordable Housing Foundation was born of the acknowledgment of the needs, goals and dreams of contemporary Maltese society; from the realisation that to move forward everyone needs to be living in adequate conditions with a dream they can hold onto.
The provision of affordable housing is not a charity programme but a decisive step towards managing a growing country with changing social and economic needs.
Affordable housing is part of the vision of quality sustainable growth, a staple in a country that aims to provide for everyone and key for one that would like to see its youth fulfil their ambitions.
Dr Jake Azzopardi is the new CEO of the Affordable Housing Foundation.