MDA files judicial protests against affordable housing scheme

The Malta Development Association (MDA) has moved from words to legal action, filing judicial protests against the Affordable Housing Scheme just weeks after publicly denouncing it.

In its protest the MDA argued that, despite being promoted as a “social initiative,” the scheme would divert public land away from families most in need, allow select developers to exploit it at the expense of others, create discriminatory conditions and ultimately harm the property market.

“This also raises serious concerns about potential breaches of state aid rules,” the MDA stressed.

The association also alleged the scheme was launched “in the middle of the summer recess” to avoid scrutiny and appears to “bypass or sidestep established public procurement procedures.”

Another key point of criticism was the scheme’s potential to “undermine” existing property values, potentially leading rising property prices to cool off.

The Foundation for Affordable Housing’s plan – which will offer apartments 30 per cent below market value on public land provided for free – will see developers earn margins of 33 per cent instead of the typical 15 per cent, MDA had said.

The MDA’s analysis claims that giving developers Joint Office-owned land for free will push profit margins from the usual 15 per cent to 33 per cent – even after a 30 per cent discount to buyers. It said the discount should be closer to 48 per cent if the full value of the free land were passed on.

The MDA previously warned against developers being given public land for free to build social accommodation and make a profit, saying it will undermine the confidence of those who are ready to invest in the property sector, who would face unfair competition.

MDA urged the Ministry and the Foundation for Affordable Housing to “immediately suspend” the scheme, insisting that affordable housing goals must be achieved without discrimination, lack of transparency, or any illegality.