Editorial | Wednesday, 08 July 2009

Mepa reform: great expectations

Tomorrow’s publication of the proposed reform of Mepa concerns everybody. We are all speculators in one way or another having bought our homes at extortionate prices in the hope of making capital gains at least in the long term. The publication of the 2005 Census of Population and Housing (in 2007) gave us all a shock when we learned that over 50,000 housing units lie vacant all around us. One of every four properties was unoccupied and since then we have built thousands more.
Will the reform encourage further construction or rein it in? Or will it simply ignore the awesome challenge and present us with some cosmetic redefinition of roles to make the planning process seem more transparent while leaving the equation unchanged? Will this be a political reform to shrive the Government of its past sins or will it acknowledge the magnitude of the challenge before us and address it?
Construction and its attendant speculation have become such staples of the Maltese economy that few of us can imagine what it would be like without them. Many businesses large and small either engage in development/speculation as a sideline or depend on book capital gains on property to show a decent profit. In many cases the strategy is to obtain a development or operating permit, to run a business at break even for a few years and then sell it on at a large profit.
It is all founded on the premise that land in Malta is scarce and that prices will always rise, at least in the long term. For the past 70 years or so it has held good. Since 2007 the scarcity of land/property has been overturned but the belief that prices will always rise is still holding the market together. Can any reform of Mepa address such issues? Is addressing them more or less dangerous than pretending that they do not exist?
What is to be salvaged first, the government’s dented reputation in the planning field, the construction industry’s prospects with all its attendant interests, or the economy as a whole which needs to avoid a blowout in the property market as much as it needs to invent a focus for investment which provides a real prospect of reward and profit?
Reforming MEPA allowing it to work more efficiently while providing more certainty and transparency would be a great gain for the country, however every Maltese government will face a serious conflict of interest in any such enterprise: keeping the construction/speculation show on the road secures a steady revenue stream for the State while construction magnates remain major financiers of political parties. Perhaps what should have been reformed first is the financing of political parties, a sore issue in a country which begrudges its parliament a suitable edifice.


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08 July 2009


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