"Malta's rate of construction is still sustainable" - PA Chairman

18th November 2017

“As long as foreign investment keeps coming into the country, yes, it is sustainable,” Johann Buttigieg said.

Malta’s current rate of development and construction remains sustainable, as long as Malta keeps attracting foreign investment, according to Planning Authority Executive Chairman Johann Buttigieg. “As long as foreign investment keeps coming into the country, yes, it is sustainable,” Mr Buttigieg said. “The minute there is a slowdown or decline in this regard, then that’s when we would need to stop issuing the current number of permits. But as long as that foreign investment is sustained, then we have to sustain permits. If we do not sustain that amount, we would see rental rates and prices go higher due to foreigners competing with the locals.”

Mr Buttigieg argued that the large influx of people coming to live and work in Malta, and the number of tourist arrivals, do not threaten Malta’s product value. “On the contrary, we need to reach a certain amount of mass to even begin solving certain problems, including traffic. If we don’t have a critical mass of people, then traffic solutions – such as a metro or others – would not be economically viable.” In his view, the figure that would make it viable is anything between three quarters of a million and a million people. “We’re not far from that,” he asserted, “if you consider the locals and the foreigners coming here for work or as tourists, we’re almost at 650,000 people in any one month.”

The main push towards development, argued Mr Buttigieg, is due to the large influx of foreigners. “Very few people know that in the last three years Malta has received more than 80,000 people in influx migration. In actual terms, you need an area the size of Sliema to provide all of these people with accommodation, restaurants, commercial centres and so on. Our natural growth is normally 3,000 to 3,500 residential units per year, but with such an influx we obviously need more housing units. Had we not supplied a larger number of housing units, we would have higher rental rates due to the effects of supply and demand. I don’t think we’re reinventing the wheel here, but one thing we have to make sure is that we are not increasing the development potential already envisaged in the local plans of 2006. We do need to protect open spaces. But if there is the demand for development, then we should sustain that demand.”

Commenting on the issue of high-rise buildings, Mr Buttigieg said that 18 applications to build high-rises have been approved since 1994, but not all of them had been constructed. “I would say that in certain areas, if we want to create open spaces, high-rises are the only solution we have. In my opinion, a high-rise shouldn’t be constructed in towns or villages like Birkirkara, or Naxxar. But we need to create them in designated areas. The Floor Area Ratio (FAR) Policy which was revised in 2014 identified six locations. Previously it could be applied anywhere, even in Gozo.” The six locations are the Marsa Park, Gzira and Mriehel for office use, and the Qawra peninsula, Paceville and the Tigné peninsula, predominantly for tourism and leisure uses.

Mr Buttigieg argued that high-rise buildings do not ‘increase the density of the area’. “Many people don’t understand this concept. According to the FAR regime, the number of units that are being built is far less than should one build in a conventional manner. The conventional manner follows the development control guidelines, which stipulate the minimum of 55sqm for a one-bedroom unit, and 76sqm and 98sqm for two- and three-bedroom units respectively. According to the FAR policy, the minimum size is 150sqm, and furthermore you need to have 50 per cent open space, the volume of which is transferred vertically, and to be surrounded by four streets. So, in fact, we are reducing the amount of development with the FAR policy, not increasing it. The only difference is that the development is being made vertically.”

Mr Buttigieg added that there are areas of Malta that need to be regenerated and others that need to be preserved. “People are not against development itself, people are against the way in which development is carried out. A person who has a development going on next door to them would normally complain, but they would also realise that the value of their own property has gone up. So the issue we need to address is how construction affects third parties, by looking at construction site regulations.”

“Many people unfortunately do not know that this falls within the remit of the Building Regulations Office, and often assume that this is the role of the Planning Authority, when it is not. Why create so many inconveniences to third parties when there are often other solutions? As people in construction often say, we’re not in a surgical theatre. But I think respect towards third parties should be a top priority.”

When asked to share his views on how the MEPA demerger into the Planning Authority and Environment and Resources Authority affected the PA, he said “it was a positive move. Today we can realise that the environmental voice is much stronger than it was before. Previously we had one authority which may have overpowered the environmental arm, whilst today there are two independent authorities and two executive chairmen who might not agree on a project or policy. This stimulates discussion from which one must come to some modus vivendi. This aspect previously did not exist. Nowadays there is an equity of powers.”

This interview originally appeared in The Business Observer

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"Malta's rate of construction is still sustainable" - PA Chairman