Malta’s rapid economic growth comes at a high cost even if the government communications machine keeps churning out impressive GDP and debt reduction statistics. However, it ignores the flip side that comes in the form of an increasingly severe housing crisis.

Many of those suffering from the skyrocketing rents are beginning to react. Gaming industry representative Enrico Bradamante, in a meeting with the government, said that many people with entry-level positions were suffering.

He argues that rent was the most crucial factor when it came to the cost of living in the industry.

Mr Bradamante implied that the measures in the recently published White Paper on rental market reform might not go far enough to mitigate the effects of the housing market on the gaming industry. He insists that more controls are required so that rent prices should be index-linked to salaries rather than property prices.

Landlords who attended a meeting organised by the Malta Developers’ Association take a very different view. Landlords fear the rent reform White Paper will stifle their freedom to set contractual terms. They threatened to pull their properties out of the market if no changes are made to the proposals listed in the White Paper.

The effects of scarce social housing, as well as affordable housing unavailability, is also felt by locals who are either unable to pay any rent at all or cannot afford to rent property at today’s high rates. Much talk has been made over the past few years about the setting up of housing associations and shared ownership of properties to enable more people to afford to buy or rent the houses at reasonable prices. However, these are projects that take a long time to show results that are meaningful to those in need of housing rather than to politicians whose priorities are determined by short-term objectives that coincide with the electoral cycle.

The parliamentary secretary responsible for housing, Roderick Galdes, says the government aims to regulate increases once the rent had been agreed. He repeated the mantra often heard in the last few years that the government “believes in price stability rather than price controls”.

There are many elements in the housing crisis the government fails to acknowledge openly. One element is that the building of social housing over the past two decades has been insignificant, leaving vulnerable people living on the fringes of society deprived of their right for decent shelter. These victims of the crisis include children living in disadvantaged families caught in the poverty trap.

Another reality is that the working poor may have enough money to put food on the table but cannot afford the high rents demanded by landlords who are cashing on demand for property by foreign workers who are almost exclusively supporting the economic boom. Local low-paid workers are being crowded out of the rental market while better paid foreign workers are increasingly unable to rent property at reasonable prices. Social and economic risks are growing with every day that passes.

The government has shown it has little appetite to intervene in the market by investing directly in social housing projects and implementing the development of affordable housing plans. This strategy needs to change to avoid more severe consequences of the housing crisis.

This is a Times of Malta print editorial