Planning Authority welcomes Court decision on controversial Santa Luċija ‘pencil’ development

The Planning Authority (PA) has welcomed a Court of Appeal judgement that confirms the Authority was correct in refusing a controversial planning application in Santa Luċija, one of the cases at the centre of Malta’s long-running debate over so-called “pencil developments.”

The judgment brings to a close a years-long saga involving the proposed demolition of a terraced house on a uniform row bordering the Outside Development Zone (ODZ), and its replacement with a five-storey block. The development, which would have towered above neighbouring two-storey homes, became emblematic of the tensions between policy interpretation, contextual design, and developer expectations under Malta’s planning framework.

The latest ruling follows an appeal filed by the Santa Luċija Local Council against an earlier decision by the Environment and Planning Review Tribunal (EPRT), which had overturned the PA’s original refusal.

Crucially, the Court clarified that an application cannot be substantially redesigned at appeal stage. The proposal presented during the appeal process was materially different from the original submission, something the Court said undermines transparency, prevents proper consultation, and bypasses standard procedure.

The judgement confirms that any significant alterations must be re-evaluated through a fresh or amended application, ensuring all stakeholders – including councils, residents, and technical consultees – have a fair opportunity to participate. The PA said the clarification “strengthens predictability” in the system and reinforces policy-based decision-making.

A turning point in the broader debate on height policy and DC15?

The Santa Luċija case unfolded against a backdrop of two decades of contentious “pencil developments”: tall, narrow blocks rising above consistent streetscapes, justified by translating local plan height limitations into metres and squeezing in additional floors.

The turning point came in March 2023 when the Court of Appeal, presided by Chief Justice Mark Chetcuti, revoked a similar permit in the same locality, ruling that height allowances in the Development Control Design Policy (DC15) cannot be treated as absolute entitlements. Instead, they must be balanced with other “material considerations,” including skyline impact, streetscape coherence, SPED policies, and social or environmental factors.

This reasoning directly influenced the present ruling.

The original application had been recommended for approval by the PA case officer on the basis of DC15 height parameters. Although the local plan limits the area to three storeys and a basement, the DC15 annex translated this into a maximum 16.3-metre height – enough to accommodate five levels.

However, the Planning Commission rejected the recommendation, citing:

• the obligation to consider wider “material considerations” under the Planning Act
• breaches of urban townscape protection policies in SPED
• DC15 policies requiring respect for skyline, streetscape rhythm and contextual design
• the character of the 1980s Home Ownership Scheme, built to a uniform height

The EPRT overturned the Commission’s refusal, arguing that if the intention was to limit the area to two storeys, the local plan would have explicitly stated so – and that the developer held an actionable right to build to the maximum height.

Objectors appealed to the Court of Appeal, which has now reaffirmed the limits of the EPRT’s interpretation and outlined a more holistic reading of DC15.

The Malta Developers Association (MDA) has insisted the ruling should not be portrayed as a departure from established practice, emphasising that DC15 is both a policy and guidance document, structured into:

• red: policies that cannot be breached
• orange: good practice guidance
• yellow: technical standards.

The MDA argued the PA has previously relied on the same provisions to both approve and refuse applications, depending on site context. It also warned against treating all components of DC15 as equal in weight.

That being said, the Santa Luċija judgement appears to reinforce a shift toward greater emphasis on context, design quality, and urban form, potentially signalling a broader recalibration of how height policies are interpreted.

The Kamra tal-Periti (KTP) had described the ruling as “a landmark court decision that virtually wipes out the speculative approach to development adopted by the Planning Authority over the past 17 years.”

KTP President André Pizzuto said the judgment vindicates the Chamber’s long-standing position that local plan height limits are not automatic rights and must be reconciled with contextual design obligations. While welcoming the decision, Mr Pizzuto warned it may produce “aftershocks” across the real estate sector, potentially affecting valuations and lending exposure.

He advised homeowners and investors concerned about financial impacts to seek valuations specifically from qualified periti, adding that the Chamber will soon hold seminars to unpack the ruling’s implications.

Although focused on a single development in Santa Luċija, the decision’s effect is yet to be felt across Malta. The Court’s decision in favour of procedural integrity, contextual design, and the non-automatic nature of height entitlements could, but not necessarily, reshape expectations for similar applications.