The Times of Malta’s boxed summary (October 16) of the recently issued Rental White Paper (WP) is a good place from where to start an analysis of the document. Every person with a social conscience has a duty to study the WP carefully, and for politicians too of course, inevitably because the WP’s consequences and aftermaths will determine very much to what extent ours will continue to be an honest, caring and Christian society.

Pending my much lengthier direct submissions as part of the formal requested public consultation, I point out hereunder some brief observations using precisely The Sunday Times of Malta’s ‘At a glance’ synthesis.

“Encouraging long-term contracts either through mandatory minimum periods or financial incentives.” Long-term contracts should, in theory, help stabilise what is presently a jungle market, heavily and obscenely skewed in the owners’ favour. Let us not, however, run away with the idea that fiscal incentives will be any panacea which owners will not try to (with their accountants’ aid) manipulate in their favour at the expense of either the renting occupants or the nation’s fisco itself.

“Requirement to register rental contracts, property inventory and security deposit.” Here is a golden opportunity for the Income Tax Department to jump in to plug out a big tax evasion tool. It should insist that all rental agreements be produced in multiple official copies, with one of them going to the department for proper tax assessing of owners’ incomes from property.

I have for long written about and advocated the need that the State in Malta absolutely needs to become aware of who is/are the owners of every single inch of these islands: the famous cadastre which factually exists in other countries. Now let us all see whether the newly established Lands Authority, and the fiscal departments, get their act together on this aspect.

“No limitations on initial rent prices.” Oh my God, why? Isn’t rent, whether at start-up of an occupancy relationship, or whenever later, always a cost to whoever is working hard to pay it? And so common sense suggests the occupant must be really able to afford it. Why shouldn’t it therefore be controlled in the sense of establishing some sort of fair relationship to the occupant’s income (earned income only, or earned plus guaranteed assured regular unearned)?

There is so much more that can be said about the problems and realities of the whole of the property sector in Malta

The government allowing owners to freely get their toe in here in such uncontrolled manner will continue to ensure that rents will – at both start of the rental and later – continue to be high, and obscenely inflationary. This is the WP’s weakest part. If this is being proposed purely as a sop to owners then, indeed, one is showing official bias towards owners at the expense of renting persons.

“Set notice periods for tenants and landlords to end the lease.” Such notice periods must not be set up only in terms of a time element, but also in terms of: the economic situation (i.e. ability to find and being able to pay for alternative housing) of the tenant; and their both being fully and freely agreed upon by both owners and tenants. If either of the parties engages in dithering or any forms of tergiversare (stalling), there should be within the Housing Authority a body for bringing either of the parties, or both, to rule and to an effective solution.

“Regulated rent price increases to be in line with property price index (PPI).” Why with the PPI?  Weren’t the WP drafters aware of the fact that property cannot, and should not, be allowed to develop a separate market dynamic of its own.

Estate agents and contractors have worked overtime to do this in Malta over recent months. Allowing this is very dangerously allowing the sector to move out of synchro with the rest of the economy’s or society’s realities. E.g. rents continuing to be out of any reasoned relationship to the RPI, or the HICP. What do we want: trade unions every year badgering the finance minister and the government for big increases simply because of the rental factor?

“Greater powers for the Housing Authority.” We should indeed all be saying hooray to this. But this body is factually understaffed and under resourced. Regrettably it comes over as concerned only with “social” housing (what abominable terminology) when in reality it should be exerting effective influence on what the Planning Authority does, on the MCESD, the Income Tax Department, etc.    

“Ensuring a supply of affordable property with private sector involvement.” Nobody will blame people when they hold that in Malta there is only one PPP that has really benefitted the citizens: the ELC! The worst thing that can be done is to get contractors or developers involved collectively in any sort of formal PPP on this issue.

They simply cannot not seek to skew any project to the real benefit of only their own pockets. The government should only hold discussions with individual contractors. But, regrettably, this objective, i.e. that of always having an adequate supply of decent affordable rental property present in the country, will always remain a pipe dream unless the Planning Authority is ordered to rigidly discriminate in some way or other against the current buy-bring-down-build apartments practices.

Reversing the PA’s current favoritism for luxurious ghettoisation, in favour of active policies of houses for the people, will need massive annual budget inputs to shift the present tide away from property owners and in favour of renting workers’ families or newlyweds.

A lot of hard work has gone into the compilation of the White Paper. Of course, there is so much more that can be said about the problems and realities of the whole of the property sector in Malta. The WP must only be seen as a necessary first step, and one notes that, unlike several other white papers that I have seen in my time, it has not included even skeleton drafting of intended legislation for comment.

That certainly suggests that the real debating fun is still some distance away in terms of time. The stage for submissions by the public on it, up to the end of November, then the time gap for evaluating such submissions, and then the whole of the eventual parliamentary iter, all these will stretch out in such manner as suggesting that the real fun is yet to come.

John Consiglio lectures in the Department of Banking & Finance at the University of Malta.

This is a Times of Malta print opinion piece