Rent referendum phase I - we're off

Yesterday was the baptism by fire of the rent referendum campaign. The people who attended the public information meeting organised by Alternattiva Demokratika probably had no inkling that they were making history. This is the first time that the Referenda Act is being employed on a citizens' initiative. It is the first time in Maltese history that the people attempt to change the law.

It is an extreme measure never attempted before by a population that is more accustomed to grinning and bearing it than reacting to insults. Perhaps the people in effect expropriated of properties conservatively underestimated at over Lm500 million (17,000 controlled properties by Lm30,000) are now ready to take action. After 60 years, our iniquitous rent laws are now recognised to be unbearable. The post-World War II housing scenario has changed altogether.

Today Malta boasts one of the highest rates of home ownership in Europe. Instead of a physical shortage of housing caused by Nazi bombs we have an artificial shortage caused by the rent laws.

In spite of amendments which liberalised the rental market in 1995, owners remain reluctant to let properties because they continue to hear horror stories about landlords forced to repair rented properties at a cost very many times the rent recoverable. As long as the insanity of our rent laws prevails, over 17,000 controlled property owners will remain reluctant to let their properties.

The virtual eradication of the rental market leaves homemakers no choice but to buy a property. This in turn creates an apparently infinite demand for property, pushing prices upwards ever faster, even though 25 per cent of properties lie vacant. The speculative element has taken over from reason and prudence.

One prominent real estate agent openly declared on television that he estimates that between 80 and 90 per cent of the properties on his books are overpriced at the insistence of their owners. They are not really on the market. The scarcity is not a physical reality; it is wholly artificial.

It is the artifical scarcity created by the persistence of the rent laws far past their use-by date which perpetuates the myth that property prices will continue to climb ever faster for ever. Many otherwise intelligent people continue to believe this disregarding the danger. Property prices have not gone up constantly and evenly; the curve has turned vertical - the cost of a modest dwelling in the 1970s estimated at seven years' average wages today demands 27 years' average wages.

More and more people are falling out from the happy cohort that can afford to buy a property. It is no longer the poor alone who will be looking for social assistance but the new poor middle class that will need help, who already needs help. With Government deeply in debt and unable to commit further follies, the extension of the social housing system is out of the question. Ironically, the government that originally came to power by pointing to the iniquity of requisitioning, is now driving us back to just such a scenario simply by doing nothing.

Reforming the rent laws is mandatory. They have produced the scarcity they were supposed to address. Creating a reformed rental market and using all of our resources is the only rational choice. We have not already taken it up because no Maltese government dares cause discomfort to anyone.

The calculation is electoral. Asking people who can afford to pay a proper rent to do so would mean that the government making the change would be exposed to exploitation of the discomfort by the opposition. With 17,000 properties so affected, it could mean more than the difference between our rivals at election time. Both our adversaries are permanently paralysed on this issue.

The injustice suffered by the owners of controlled properties is simply discounted. They have to grin and bear it. This is what the safety of the big parties' electoral prospects demands. It has produced an insane situation.

Owners tell me tales of offering properties to their tenants gratis and being refused until they pay their tenants to take the property! I have witnessed the fury of owners who have been obliged to surrender a huge part of their assets to speculator tenants to recover the freehold of their properties to develop them. The bitterness of owners whose parents had been obliged to sell off properties for a song to their tenants to avoid repair bills carries on through the generations.

For many politicians these are statistics; for the people affected it is their life story, the difference between a life of ease and one of toil, the difference between being able to invest one's assets in one's business or even in the children's eduction and being prevented from doing so. For many Maltese people from every walk of life the rent laws have meant disaster, prolonged disaster, a deep and abiding resentment at being abandoned by the state.

Political opportunists will point at the possible hardship to which some of the poorer tenants may be exposed if the rental market is liberalised. There is no reason why the state should not take the burden off the owners' shoulders.

A liberalised and functioning rental market will generate income and tax revenue which the government can dedicate to rent subsidies for the deserving few. As things stand, many owners are subsidising the homes and business premises of millionaires. It is unbearable. It is irrational.

Doomsayers prophesy that there are too few owners to make a difference, that they do not have the political weight it takes to swing a referendum. They are wrong. Delay and procrastination through generations has increased the number of owners and part-owners in relation to the number of tenants. Many properties are owned in common by generations of owners.

Add to these the former owners who still feel that they had been cheated when they sold off their properties for nothing. Add to these the second and third generation which feel the same way.

The country has changed. Home owners are a majority, a very large majority. Most of us can sympathise with owners who are deprived of their property. We do not want the situation to deteriorate to the point when our own properties will be exposed to such dangers because of the artificial scarcity which is allowed to grow unimpeded. By the time we come to a vote on the referendum nobody in Malta will feel that the matter does not concern him or her.

We are all affected, the economy is affected, our architectural heritage, our countryside, our tourism product potential, our hope that our children will be able to afford a home, the quality of life of many families obliged to take on multiple jobs to pay a mortgage burden that could become impossible once interest rates climb higher than their present rockbottom.

By the time we are ready to vote, we will all want to vote in this referendum. We will all be incensed that it had to come to this; that our governments ignored such a situation for so long. Meanwhile in Phase I of the campaign we propose to collect the 30,000 signatures it takes to force a referendum.

We started yesterday at our public information meeting. We will continue until we succeed and then we will succeed in the referendum proper. Maltese citizens will succeed where their governments have failed for 60 years.

Dr Vassallo is chairman of Alternattiva Demokratika - The Green Party, 10, Triq Manwel Dimech, Sliema

hcvassallo@kemmunet.net.mt
www.alternattiva.org.mt