Social Housing: Room for improvement?

Social housing has always been a contested issue in Malta. However, one cannot say that this issue has ever developed into a crisis. This can be evidenced by the average number on the waiting list being around the 2,800 in these last 12 years. Nonetheless, the aim will always be to reduce this number to under 500 so that one can proudly say that the issue of social housing is being appropriately addressed. Given the resources that Government is putting in this sector, this target should not be impossible.

Building New Apartments!

This has positive and negative aspects. Government has invested approximately 110M in building new apartments and although this is a massive investment, it will not distort the property market. The reason being that this stock will only be available to those who do not have enough income to buy an apartment which means that these households, in fact, do not form part of the market demand. Furthermore, this supply is only available to the vulnerable within our society and so again, this stock does not form part of the market supply.

Unprecedented investment in Social Housing

The Government made the unprecedented bold move in investing heavily to increase the number of social apartments. There has never been a 110M investment in this sector. This could materialise because of the assistance of the much-debated IIP programme which has contributed to half of this major investment. One must also take note that the decision of investing 110M was taken when there was a booming economy and a huge stress on the supply of low-cost apartments. Fortunately (referring to the stock of property), that scenario is now changing although we still have other challenges such as the impact of the COVID-19 pandemic.

Supply creates its own demand

One can observe that in other European countries the increase in the supply resulted in greater demand which brought a further increase in the waiting list. So, although many speak about constructing more units as a solution, this by itself will not be a sustainable solution. Just to translate this in simple numbers, if one had to build all the110M projected 1,200 units in three years, this would still leave the waiting list as it is today because in 3 years’ time there will be approximately a 1050 increase in new applicants since evidence is showing that there is an increase of approximately 350 net pending applications each year. This amount will be even higher since the building of new apartments would tend to generate an increase in the applications for social housing. This is just to gain an idea about the nature of the problem and that by just constructing more units will not be a long-term solution. Rather, this measure is a small part of the solution and would need to be complemented with a wider set of initiatives. The lack of supply is only a minor factor because the major factor is the lack of ability to pay for the current market rent.

Opportunity cost and transparency

Imagine how many families one could assist and sustain by providing rent subsidies and other similar schemes with 110M. One needs to ask whether the waiting list would decrease if the 110M were used in subsidies and in assisting those on the waiting list to be able to find and manage rent instead of spending this amount to construct new apartments. This question highlights even further the bold investment of Government to really target those in need for social housing and this brings us directly to very pertinent questions

  • Are we making sure that these apartments will be allocated to those who are truly in need and not to those who pretend to be in need. 
  • How are we making sure that these apartments are only used as a temporary accommodation until one moves up the ladder to be able to live independently? Or are applicants expecting to be getting a new apartment for life and to be passed on from one generation to the other thereby perpetuating the status quo?
  • Do we have a transparent classification (point/criteria) system for the selection of families in need?

Today, when we are all practicing transparency and segregation of duties it is about time to create a fair and transparent point system even in the allocation of social housing. In this sense, the Housing Authority should be the entity providing the stock, but the allocation of apartments should be managed by another separate entity such as for example FSWS. Some years ago, the Government already made a move in the right direction by engaging with the Housing Authority a few social workers to perform a social assessment for social housing applicants, but this is not enough. There must be an entity focused on social issues but more importantly with the right manpower to make a social assessment in an organised and professional manner and on a wider number of applicants rather than on the limited amount that is being done today.

One must keep in mind that the economic and social circumstances of families are constantly changing so one needs a robust organisation with a good number of social workers to do the ongoing evaluation of families in need of social housing and to be able to properly classify them according to their true needs. Besides, you cannot have an entity which provides supply of apartments which is also allocating the said apartments and the idea of creating a Board to act as a smokescreen is no longer acceptable.

One must admit that there has never been a social commitment in the past 30 years than what has been invested in social housing in the past 8 years. It is evident that Government has social housing at its heart, and this may be evidenced by the huge financial investment not only in the building of new apartments but also through the numerous schemes such as social loans and equity sharing and through the huge increase of the rent subsidy which has saved thousands of families from becoming homeless. Not to mention the pre-1995 rent agreements whereby the Government literally had to make good for the increase in the annual rent of such families. There is no doubt that the Government made sure that the boom positive effect has also been used to stand up for those in need of social accommodation.

These efforts are excellent but now it is high time to be dauntless and make a further next step. Government should aim specifically on making an impact on those who are truly in need of social housing. This can only be achieved by making sure that assistance is prioritised on the basis of transparent, accountable, and socially fair measures within a long-term sustainable strategy.

The end objective should be to reduce the waiting list to not more than 500 and it is only then, that one can really say that a marked positive impact on social housing has been achieved.

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