Housing Authority to offer 2,000 units for rent

Social Policy Minister John Dalli told Parliament yesterday that the Housing Authority would offer some 2,000 units for rent and warned that whoever was allocated social housing should not take it to mean it was for life, but only while one really needed help, because the property had been paid from public funds.

Introducing the motion for the House to approve the authority's financial estimates, Mr Dalli said that after having pushed for ownership of homes, the authority now needed to provide more dwellings for rent, because this helped those in greater need better. There were two ways of doing this, he said: either by subsidising those who were renting privately, and who would need more resources from next year due to changes in the rent laws; or by reinforcing the social housing element for those renting from the Housing Authority.

Mr Dalli said that even in this area, the authority needed to follow different guidelines than to date. The community, as against the spectre called government, could not give everything to everybody, but only to those in real need.

Such rents would also be based on a sense of value. The true value of the residence would be clearly stated, even though, in practice, it would be rented out for a lower price in practice. Subsidies should not continue to be given to anybody who received a windfall, for example. This was the true social justice in which people must continue to be educated with facts and the truth.

Housing stock should be revolving. Some social housing was still being occupied several years later by well-to-do people, while others could not afford decent housing.

Mr Dalli said the authority was currently working on different schemes, even in view of current problems in the construction industry. One of the considerations was to develop public-private partnerships with people who already had property, with a view to establishing a fast track for getting that property on stream. The authority's leasing system would provide a mechanism for a family to be allowed to adapt the residence to its circumstances, including size and locality.

The means would be provided to change property as a family became smaller and the parents grew older. All government apartments would feature full accessibility to all.

Earlier, Minister Dalli said social initiatives should not be allowed to develop into schemes that lost their original focus and became systems of taking from everybody to give to a few. This invariably sowed doubts into people with real social conscience. There should be no fast track to cheap housing.

The Housing Authority's focus was on helping those in need, but it could not construct dwellings and sell them at prices that did not make sense. It had several schemes to help people to become owners of their homes, but it was now looking hard at them, keeping in mind the impending movements in the market due to changes in the rent laws.

Going over a number of housing schemes, Mr Dalli said the equity sharing scheme had originally been launched to help the first 250 people who applied for funds to deposit in a bank and use them as collateral, repaying the loan within 10 years to the authority. The need had been seen to change the scheme in a way that no large loans were made at the start, enticing people to buy properties they could not really afford, but to let everybody make their own bank arrangements according to their own financial possibilities, with the government then giving a grant of a subsidy of 30 per cent of bank dues for ten years.

Mr Dalli said the Housing Authority had issued 152 units at subsidised prices, but only 100 had been bought. It was keeping the remaining 52 as leasing stock.

Another scheme had been Sir Sid ta' Darek (Own your Home), but results had shown that 52 per cent of those buying their homes were senior citizens with a view to bequeathing the home to their children so that they could then sell it at commercial prices. It was not right to buy a residence built with public funds at 20 per cent of its worth and exploit it for personal gain after 40 years of renting. These were abuses that should not continue to be institutionalised, said Mr Dalli.

On the subject of requisitions, he said that by December 2008 the government had repealed 3,253 of them, down to just under 500 from thousands that had existed over the years. It was hoped that the system would end once and for all by the end of this year.

The government was also working to persuade Mepa not to stick to its templates of insisting on garages under all dwellings.

Another scheme mentioned by Minister Dalli was to upgrade, within limits, places that were already occupied, irrespective of whether the residence was owned by the Housing Authority, privately owned or rented from the private sector. Help would be given even in view of new obligations of maintenance through the updated rent laws, with improvements leading to higher rents unless the tenant made them himself. It could yet be that the authority might demand some payback for the help offered.

All schemes would be concentrated on means testing. The ministry had decided to set up a group of professional people to devise a standard means test, with every department then adapting benchmarks on that real, transparent, professional means testing to determine the level of help, Mr Dalli concluded.

Parliamentary Secretary Joe Cassar said that 19,000 clients, most of them people in need, had sought Housing Authority assistance between October 2007 and December 2008.

He said the home ownership scheme had proved very successful: 152 units had been offered for sale, benefiting the same number of families, while €6 million had been allocated for the equity sharing scheme to help clients to buy their first property from the private market. This scheme had closed soon after it was launched, with the government launching another scheme providing grants up to a maximum of 30 per cent on home loans.

Other assistance was given on interest on loans.

Dr Cassar said that the most popular scheme related to the refurbishment and completion of the first household, wherein 483 applications had been accepted at a cost of more than €1 million.

On rented government property Dr Cassar said that the Housing Authority had to ensure that this was rented to recognised tenants. Technical officers had carried out more than 3,000 inspections and 98 illegal tenants evicted. The government was showing that it was socially conscious but would not accept illegalities.

Another scheme which had been oversubscribed was the repair scheme, with €1.5 million given in assistance to 447 householders. Another 136 people had benefited from grants to persons with special needs, so that they could make necessary changes in their households.

Assistance to NGOs over the past 15 months had amounted to €300,000.

Dr Cassar said that one of the authority's most ambitious projects was the upgrading of government housing estates, with €600,000 being spent on the installation of lifts and the upgrading of common areas. Tenants had to feel themselves responsible for doing the maintenance work in these areas.

Ċensu Galea (PN) said that if optimum use was made of the housing stock, the problem would no longer exist, as there were more buildings than there were families. The principal social aim was that the houses were of adequate quality to meet the needs of the family unit.

In view of how the population had exploded over the years, and indications that it would continue to do so, one had to take this into consideration to properly meet the needs of the people.

Requisitions as a temporary tool to simply put roofs over Maltese people's heads had been abused through the years. Something he had never understood, he said, was requisition orders issued on property given out by the government itself in the first place.

In some cases requisitioned property went back to the owner, but more often than not it would end up with third parties who often did not have a good relationship with the owner.

This had had serious impacts on the rent market in Malta, but the laws had thankfully been amended today. There were problems with rent when the situation did not fit in with guidelines outlined by the authority, he said.

Although he understood the financial limitations, he felt there should be a concerted effort to better understand the market situation and analyse whether it could lead to more subsidies. Perhaps the relationship between the leaseholder and the owner could improve, as both could benefit from government help through the authority.

Problems would continue to crop up, he said, because there was no such thing as a simple solution. Solutions had to come from both parties, no matter which one was in government. The around 2,000 applications for aid from the government were a good sign. Evaluations through the years had revealed that there were times when people tried to apply in the hope of perhaps one day getting a home from the government, who were not really entitled to this help because their problem was not tied to housing but the desire to live elsewhere.

Frederick Azzopardi (PN) said the Housing Authority had undergone a number of changes since October 2007, both in its board and administration structure. The new chief executive, Dr Paul Debattista, appointed last November, had a good reputation and ample experience.

The authority was also in the process of revising its procedures to reflect changes in administration and the adoption of technology in their operations, so they may overcome the challenges of today.

One of their aims was to put financially sustainable aims into action. The authority had participated in the 2008 period of consultation on the rent law reforms, and now had an important role in their implementation. It had to be in a position to help those who might be hit hardest by the reforms.

The past months had seen the amalgamation of three departments which offered housing services, for increased horizontal organisation, better use of resources and increased efficiency.

Mr Azzopardi said the authority was focusing on improving existing buildings, and helped up to 400 houses annually. It also helped tenants renting from the private sector, but the income ceiling of applicants had to be revised.

The Housing Authority was also doing its utmost to promote urban regeneration.

There had been schemes in the past which tried to make better use of existing property, but had failed due to circumstances. However, today's circumstances made it viable to reconsider.

The authority continued to give priority to persons with special needs, through generous means testing. In fact they had decided that expenses for special apparatus or treatment fees would be deducted from the person's assets when it came to calculating the aid given. There was another scheme which offered financial aid to make houses more disabled-friendly.

The equity sharing scheme aimed to provide help for those buying their first home from the private sector but who could not do it without help. The allocation for this scheme had been €5.8 million, and it had closed on April 23, 2008, when the funds were used up. 203 applications had been approved, making applicants partial owners of their homes.

Mr Azzopardi said there had also been progress in the identification of persons occupying government property without being entitled to do so, which had led to a number of evictions. Requests for maintenance in common areas between October 2007 and December 2008 had reached 2,800, and 10 tenders had been issued for ceiling works in 88 apartments.

The Housing Authority also helped voluntary organisations which provided housing, such as Suret il-Bniedem and YMCA, as it believed these played an important role in society.

The aim of the authority remained to help those in need of decent housing, and Mr Azzopardi augured that they might continue to offer an improved service to vulnerable sectors of society and the public in general.

Winding up the debate, Mr Dalli referred to Dr Mangion' criticism on the report of the authority's accountants and said that the €64 million mentioned related to valuation of all the authority's assets. The new auditor engaged by the authority wanted the information to be set in a new format. He also said the development zones belonging to the authority would not be developed in the near future.

The Housing Authority was finalising plans to embark on a refurbishment of housing estates. Tenants were obliged to look after the rented property and the common areas in a block of flats. Certain tenants needed to be disciplined in this regard. The authority was trying to introduce the concept of residents' associations for the housing estates.

Minister Dalli referred to certain housing schemes which were suspended and were being reviewed in the context of the new Rent Act which, he said, would radically change the landscape and bring a different scenario which had to be specifically addressed.

The equity sharing scheme had been substituted with a grant amounting to a maximum of 30 per cent of monthly loans paid to the bank. He said this was a step in the right direction because it made everyone aware of the loan one could get from banks. Other schemes were being fine-tuned. In the repair and maintenance scheme the authority was using the public works department as its service provider.

Mr Dalli also spoke about the revision of rents, saying that out of 1,234 rent reviews made last year, only 25 had been adjusted while 1,600 rent revisions had been carried out this year with only 60 rents adjusted upwards and 50 others adjusted downwards. The amount of rent did not amount to more than four per cent of annual income of the household.

At the end of the debate, when the question was put, the opposition called for a division.

This will be taken next Wednesday morning, in line with the procedural motion which the House approved last February and which proposed, among other things, that Wednesday sittings would henceforth be held in the mornings, not the evenings, and voting when divisions were called would be taken only at the end of the Wednesday sittings, independently of the day when they were called.