Rising prices set to pile pressure on Housing Authority

Opposition housing spokesman Karl Chircop warned yesterday that pressures on the Housing Authority would rise unless the government acted to ease property prices and encourage owners to put vacant properties on the market.

Speaking during the debate in parliament on the estimates of the Housing Authority, Dr Chircop said that whereas a three bedroomed apartment now cost Lm40,000 shell, when the average salary was Lm5,000, 10 years ago the same property cost Lm10,000 when the average salary was Lm3,500. And the situation was getting worse, with the savings ratio in steep decline. It was no wonder that young couples were finding it even more difficult to marry. Those who did marry ended up with house payment commitments all their life, circumstances which led to financial problems and, often, marital break-ups.

Under the PN the gulf between the well off and those with a low income had widened. The Housing Authority should seek to influence government policies as well as property prices. For, instead of improving the situation, the government was making it worse because of the reintroduction of succession duties and other taxes. The scheme to encourage the Maltese to repatriate funds held abroad had seen a rise in property purchases for investment, further raising prices.

At the same time, 19 per cent of properties remained vacant. New policies were needed to encourage those property owners to put those properties on the market, for sale or rent.

Turning to the Housing Authority's annual report Dr Chircop said he felt that the subsidies given to help people purchase their residence should be improved on the basis of the applicants' income, rather than the value of the properties.

He also felt the authority should conduct follow-ups to see what beneficiaries did after being given assistance. The authority's customer care section also needed to be improved.

Focusing on social spending by the authority, Dr Chircop said spending was decreasing next year by four per cent, or Lm140,000.

It was good, however, that capital spending next year would be in excess of Lm5 million, with funds unspent this year being carried over. He also welcomed the assistance being given by the authority to young people who left institutions.

Concluding, Dr Chircop said the authority could be more effective if the government had a comprehensive housing policy which eased the burden of buying property on young people.

Stefan Buontempo (MLP) said it was absurd that an authority whose primary aim was social housing had not allocated even one apartment this year for allocation by the Department of Social Housing.

Just as absurd was the fact that the authority had increased its workforce when the public service claimed it had excess workers and the authority was planning to merge with the Department of Social Housing.

Dr Buontempo said it was disgraceful that the PN government, in office since 1987 except for a 22-month break, had done nothing to reduce the number of vacant dwellings.

It had also failed to effectively get the rental market going.

The Department of Social Accommodation had 3,000 applicants waiting for accommodation. What was the authority doing for these people?

Dr Buontempo said the authority deserved to be praised for the energy saving apartments it was building and for helping non-governmental organisations.

He complained, however that the authority's expenditure for next year would be Lm8.7 million, a 13 per cent drop over the current year. Compared to last year, the authority was to spend 13 per cent less and 17 per cent less than before the last election.

Dr Buontempo said that despite the cash squeeze, the authority was still spending Lm15,000 on a new car for its chairman and Lm130,000 to decorate its new offices.

The authority would be building fewer apartments next year, with Lm1.8 million less allocated for new projects, even as funding for its assistance schemes would also decrease.

The government's funding for the authority next year would drop by 24 per cent to Lm2.4 million. At this rate, the authority would soon find itself privatised.

Referring to comments by Parliamentary Secretary Tony Abela that properties allocated by the authorities should not be sold to third parties, Dr Buontempo said that making a profit off the authority was wrong, but what about spending which a tenant would have made on the property acquired from the authority?

Dr Buontempo said that while funding for the authority's subsidies would decline next year, the costs for people to acquire properties from the authority were rising. This did not reflect a social policy and many applicants were now even finding the acquisition or rent of Housing Authority properties out of reach.

How could a separated woman be offered property in shell form at Lm20,000? Was it not obvious that such rates were not affordable for these people?

Dr Buontempo said that the authority was not really renewing old neighbourhoods. What it was doing was to demolish old buildings and replace them with new blocks.

Why had the installation of lifts in government blocks been halted? Indeed, why was the cost of the installation of lifts rising so far?

Labour MP Silvio Parnis said demand for social housing remained strong, and the government should again consider adding further storeys to its apartment blocks. He also complained about high prices being charged for rents.

Marie Louise Coleiro (MLP) said it was wrong to generalise in the sense that all or most people applying for social housing were abusers: the opposite was the case.

What was happening was that people of limited financial means were finding it all but impossible to avail themselves of badly needed housing. Transparency in the system was also lacking.

She said the authority should consider improving the rent subsidy scheme, because rents were simply too high and many could not afford them.

Furthermore, there were cases where subsidies were ending up in the pockets of the private owners, who did not even issue receipts or sign contracts. This was something the authority needed to take measures to stamp out.

In the name of social justice a review was also needed of the various schemes so that no potential beneficiaries would be left out. There were cases where people who had received a social benefit several years ago was precluded from applying for another social benefit now when they clearly deserved it.

Ms Coleiro said that although it was good that several families had purchased their homes from the government, when it came to installing a lift in a block of flats some found themselves in difficulty because their financial circumstances would have changed. The plight of such families should be looked into again.

It was important that families with problems of domestic violence should not be concentrated in particular housing estates, giving rise to ghetto-like situations. The authority needed to install a fast-track system to help coordinate such problems of domestic violence vis-a-vis social housing, she concluded.