House building

Stairways to heaven?

The recently released Mepa statistics on residential dwelling units' approvals deserve some comment, as they are a fair indication of trends in the construction industry.

The figures indicate that while the amount of development taking place in areas that had previously already been developed has increased very satisfactorily, there has been a 35 per cent rise over 2004 figures in terms of total permissions approved for dwelling units.

These new results indicate that 60 per cent of all new house building is taking place on land that had previously been developed, for example through the redevelopment of terraced houses into apartment blocks. This suggests that the planning system has been much more successful at encouraging development on already built-up land than was envisaged by the 1990 Structure Plan, when it estimated that only 13 per cent of development would take place in such areas. This has obvious results in significantly reducing take-up of virgin land.

This shift towards redevelopment is evident also in the high proportion of permissions granted for apartments (83 per cent) and maisonettes (11 per cent) rather than terraced houses (three per cent) or other forms of development (one per cent) in 2005 (see graph). This shift has the positive result that housing provision has focused on more land-efficient forms of development, contributing significantly towards the restraint of urban development within the country's development boundary.

There has been a steady growth in the number of dwelling units' approvals granted by Mepa since 2000. In this period, 35,547 dwelling units were approved, averaging just fewer than 6,000 permissions a year. This high level of provision has positive economic impacts for the construction sector, and indicates that it is (or should be) in a healthy position. It should also have positive social impacts in that the need for shelter is being addressed, with a wider choice for consumers in terms of dwelling type and location. However, in the light of estimates that under 2,000 new households are formed annually, it is clear that house building has outstripped demographic need by a long shot.

It does not necessarily follow that all approved dwellings are built, however the majority are actually developed. So while there are positive impacts resulting from the supply side of new dwellings there is also the downside to this rate of construction activity.

The high rate of redevelopment is increasing urban densities: in 2000 3.5 units were proposed to be built for every unit demolished, whereas last year the ratio was twice that at over seven units for every unit demolished. This has impacts in terms of congestion and parking problems, noise, and overlooking of properties. With this in view, the issues of building design and density are to be addressed in the upcoming Replacement Structure Plan.

When the overall mismatch of supply and demand (also possibly in terms of preferred housing types) is viewed within the context of continued high house prices, this raises questions about the efficiency of land use. It also suggests that increasing dwelling supply has not had a damping effect on house prices, as might be expected, and therefore also raises the issue of affordability. The time may be right to incentivise the better use of vacant dwellings, which in the 1995 census rose to 23 per cent. This should be accompanied by more intensive programmes of action to significantly improve conditions for residents of urban historic centres such as Valletta and the Three Cities.

These trends are also likely to signify increasing inconvenience to neighbours, as more residents are subjected to more development projects in urban areas in their vicinity. In view of this high rate of activity in the construction sector, the industry should begin to consider shouldering more of the burdens associated with development by taking action to reduce the inconveniences and the safety and damage risks that neighbours undergo. More effective site management and practices should be introduced, and some of the environmental costs associated with building development could be borne by the developer. These could include those related to waste prevention, minimisation, separation and recycling, as well as dust abatement.

Dr Cassar is director general, Mepa.