This reported that, for a family of four living in social housing, at a cost of about 200 euro per year, the minimum income required to live a basic life was 953 euro per month. At social housing costs of 17 euro per month, the income after housing costs is therefore 936 euro per month for this group of people. Any family of four in this situation is paying 1.8% of their income on housing costs.
Contrast that with my family's situation of 2010 and the situation of many living in Malta. Pensioners on 420 euro or so a month, minimum wage earners on about 720 euro per month, average wage earners on about 1 000 euro per month, the unemployed, the unable to work… If any of the people in these income groups are tenants in the private rental sector, then their income after housing costs is pitiful. Currently, rents begin at 500 euro per month. So, as you can see, a sizeable number of tenants - remember that the average wage is about 18 000 euro per year before tax and NI (about 1000 euro per month after tax and NI) – are paying impossible proportions of > 70% of their income on housing costs. They are living on their savings, on loans, on charity...
In Malta we largely don’t have a problem of homeless people on the streets. But please don’t kid yourself that we don’t have a serious problem of homelessness. This is how Shelter Scotland defines homelessness:
“The definition of homelessness means not having a home. You don't have to be living on the street to be homeless - even if you have a roof over your head you can still be without a home. This may be because you don't have any rights to stay where you live or your home is unsuitable for you.”
It doesn’t take much imagination to understand that, right at this very moment, we have single parents living in 1 bedroom with their children in their parents’ family home. Or people having to put up with an abusive home situation because they have no option – they cannot set up home on their own because they cannot afford the impossible rents. Or pensioners having to do without essentials or cooling or heating so that they can pay the rent.
Contrast the situation of tenants in the post 1995 private rental market with tenants in the pre 1995 private rental market and it is clear that of all three sectors, it is the tenants who signed contracts post 1995 that have it extremely bad.
Dr Kurt Xerri wrote about this in his article ‘Rentals not fit for purpose’ (TOM, February 2015). He describes how
“nine per cent of the total occupied housing stock (almost 14, 000 households) is composed of protected tenants whose legal entitlement to remain in occupation of their dwellings at disproportionately low rents is becoming increasingly questionable in each European Court of Human Rights judgement delivered against Malta.”
Pre 1995 protected tenants and social housing tenants pay in a year less than what post 1995 tenants pay in a month. This is just not tenable.
This is a politically sensitive issue. Some pre 1995 landlords are living in poverty themselves whilst their tenants pay them 200 euro per year in rent. Or they would like to help their children get on the first rung of the property ladder and are not able to. Not all people currently living in social housing need to have their housing costs subsidized by the state. What happens to this group’s entitlement to social housing once they have got back on their feet? Does an entitlement to social housing decades ago mean an entitlement to social housing for life?
These are important questions that the state needs to look at with regard to solving the housing crisis.
And please, I don’t want to be misunderstood. I am not advocating increasing the pre 1995 rents to market rents overnight. I am also not advocating evicting social housing tenants if it is deemed that they are able to afford market rents.
Instead I’m advocating looking at housing holistically. We need to be coherent, considered and most of all courageous in our vision for Maltese housing policy.
It is a huge pity that this foreseeable housing crisis was not tackled years ago. The problem has compounded and become more complex, thus making the range of solutions more problematic.
The Parliamentary Secretary for social accommodation, Roderick Galdes has a huge challenge on his hands. Speaking for myself, I think the White Paper proposals are a good beginning. But more will have to be done. Most importantly, all three sectors have to be looked at.