MDA starts legal action over government’s dubious ‘affordable housing’ scheme

The Malta Development Association has initiated legal action aimed at compelling the government to overturn its so-called “affordable housing” scheme. The association claimed that the scheme is anti-social, lacks transparency, may involve illegal state aid, anti-competition, and appears to be influenced by a predetermined arrangement with certain contractors.

In a rare judicial protest, the normally pro-government association criticised Housing Minister Roderick Galdes and the Foundation for Affordable Housing—formed by the Church and the Government—for insisting on the current operation of the scheme. They argued that this approach is likely to discriminate against those who genuinely need assistance, benefiting “only a select group “of contractors.

In its protest, the first step before a fully fledged lawsuit, the MDA said that while the intention of the scheme – to have a housing stock for those who cannot afford – might be good, the way the scheme has been designed is going to have the opposite effect.

The MDA stated that it does not make sense for four large portions of developable public land, intended for social housing, to be given to certain developers for free, allowing them to convert them into flats and sell them at a reduced price, but at a high profit for them.

Insisting that the workings of this scheme might institute state aid – illegal in the EU – the MDA said that it would have made much more sense if the Government or the Foundation issued tenders to build the apartments and sell them to those who are really in need at affordable prices.

The MDA also noted that the short time -frame given in the expression of interest for offers, combined with its timing during the summer holidays, suggests a predetermined outcome regarding certain businessmen who will eventually secure these lucrative contracts.

The MDA called on the government to immediately reverse the scheme if it wants to avoid further legal action.

The Shift has already reported how this scheme, piloted by Minister Roderick Galdes has raised eyebrows among developers, businessmen and professionals, mostly architects, as conditions inserted in the issued tenders point towards a predetermined outcome and possible collusion.

The project, announced last July jointly by Prime Minister Robert Abela and Archbishop Charles Scicluna, will see four massive plots, formerly owned by the Curia, converted into tens of flats to be made available to middle-income earners who do not qualify for Housing Authority schemes but are still struggling to buy their first property.

Experts in the field told The Shift that the way the scheme is being executed is dubious and may be open to blatant abuse, particularly by certain developers.

According to the tenders issued in the form of an Expression of Interest, which are not publicly available but were seen by The Shift, the Foundation for Affordable Housing will not be responsible for developing the plots or constructing the units. Instead, the land parcels will be awarded to developers through a complex and unusual tender document.

Strangely, the tender documents lack critical information, such as the full cost and value of the land, the nature of the subsoil (which significantly impacts project costs), and the final number of units to be built.

The Foundation is managed by CEO Jake Azzopardi from Qormi and the son of former Labour Party CEO and Robert Abela’s canvasser, George Azzopardi.