Issue link: https://maltatoday.uberflip.com/i/702141
14 HE may not immediately look the type, but Sandro Chetcuti certainly has a way with words. Fond of ex- pressing himself through popular idioms, he provides the media with exactly the sort of one-liners any copy-editor would immediately seize on for a headline. Two examples immediately spring to mind. Addressing a meet- ing of the Malta Developers' As- sociation, Chetcuti (MDA's chair- man) urged members to 'make hay while the sun shines'. In the con- text of recent changes to the 2006 local plans to permit ODZ develop- ment under certain circumstances, this was interpreted by some as a rallying call to avail of the resulting construction overdrive. Separately, he famously likened Malta's two main political parties to 'supermarkets', where one picks and chooses the most desirable 'products'. Later I will ask Chetcuti to expand on at least one of those famous quips; but when I meet him in his Marsaskala home, it is against a backdrop of a nationwide debate about 'high-rise'. In truth, we have been discuss- ing the issue for years now; but a sudden spate of applications for skyscrapers – mainly concentrated around the Swieqi-St Julians- Slie- ma-Gzira area – has brought to the surface a number of deep-seated doubts regarding the sustainability of the entire construction sector. Property agents such as Chris Grech of Dhalia were among many who sounded the alarm that the 'property bubble' might be about to burst, as a result of a glaring mismatch between demand and supply of residential units. There are logistical questions, too; can these areas sustain the volume of traffic, sewage and other impacts such huge development projects are likely to entail? "I would depart from the concept that, first we must look at what is permissible to build. But instead of building that horizontally, there is room to open up spaces and re- duce the size of the footprint by going up vertically instead. That way, the chances are that – in- stead of a building/street/building/ street townscape, where there is no breathing space between buildings – you could have a proper urban regeneration…." Here he breaks off to point out that it is a little late in the day to be considering restrictions on height, given that such restrictions were relaxed in the past. "At the end of the day, we are still going up vertically, even if to four, five or six storeys. Before the height restrictions were relaxed in 2006, and the zoning was two storeys everywhere… if things remained that way, there wouldn't be such demand for high-rise. But once we've already allowed buildings to go higher, and seeing how certain areas have evolved as a result – already reaching eight storeys, in some cases – the fact is we've gone up already..." At the same time, Chetcuti's argument hinges on a best-case scenario: that is to say, if high-rise comes about at the expense of horizontal development. Recent experience doesn't point in that direction, however. Urban sprawl has certainly not stopped because of the height restriction relaxation. And individual projects seem to bear this out. The Metropolis pro- ject in Gzira, for instance, involves significant high-rise but no public space… certainly not as envisaged in the floor-to-area ratio policy… "Metropolis is a case in point. It was approved at a time when there wasn't even a policy for high-rise, let alone a masterplan. To this day, I am still dumbfounded that it was approved. By what right, and un- der what policy, was that permit granted? That sort of planning is wrong. I am not saying I'm against the project itself; let me make this clear. And to be fair, there was no policy at the time. Neither the 'tall building policy' nor the 'floor-to- area ratio', had been approved. So that project surely isn't the best ex- ample of good planning…" Perhaps, but it gives us an indi- cation that MEPA takes (or took) such decisions without considering the wider implications. Why should we be confident that it won't do the same thing again, now that there are six or seven mega high-rise pro- jects at application stage? Chetcuti however warns against confusing 'applications' with ac- tual permits. "As far as I am aware, MEPA has not approved any big project application since the tall building policy. I don't look at ap- plications myself… I look at deci- sions. This is crucial, to me. There is a policy which was approved… and I don't think we should judge that policy before the authority it- self has taken a decision based on it. We cannot jump the gun. Any- one can apply for a development permit, any way he likes. But there is a difference between what is ap- plied for, and what is actually ap- proved…" Is he satisfied with the planning policies, though? On paper, they do allow the sort of density of develop- ment we are looking at. And this is what worries many people, not the individual projects themselves. "What we need is good planning, definitely. And I'll emphasise this: Maltese planners need to be intelli- gent enough; consultations need to be wide enough to include the pub- lic, the government, the authorities, civil society and entrepreneurs… all considerations have to be taken on board; and planning must be car- ried out rationally. Not piecemeal. Any developer who wants to em- bark on a project must make that project fit into the full picture. That way, it will not be discordant with the surroundings. That's the direc- tion we should be heading… and we have to work hard to get there. But we can't be afraid, because fear hinders progress. We have to be conscious and aware of the envi- ronment, the infrastructure, etc. That's important. But we have to also be allowed to work. And our projects have to be doable. There has to be a demand for what entre- preneurs are offering…" This brings us to the other side of the equation. How 'doable' is Mal- ta's current building boom? I've al- ready mentioned fears of the prop- erty bubble bursting. How long can Malta carry on increasing the vol- ume of residential units, when the number of people who can actually live in those apartments is not in- creasing in step? "The way I see it is this. If prop- erty depreciates in value, no one would buy it. Property is only bought – especially as an invest- ment, and especially by first-time buyers – because it appreciates. When there is an economic down- turn, or a recession, nobody buys property. The only ones who do are those who can afford to hold onto that property, which they bought at a bargain price, until a sunny day…." Yes, but isn't an economic down- turn what could easily happen if we carry on oversupplying a dwindling demand? Couldn't the property boom itself bring about a recession for that very reason? "What I'm saying is that, ac- cording to the planning policies approved in 2006, it is possible to apply to build X square metres any- where within the building scheme. That is already possible. So are we saying that, because people do what the policies permit them to do, the bubble will burst?' Some people are saying that, yes... "Are they?" He seems genuinely surprised. "Are they saying there shouldn't be urban regeneration? That, in places like Qawra and Bu- gibba, we shouldn't be replacing the ugly buildings there are with new development? Are we saying we don't have a problem with old buildings, but we have a problem with modern ones…? I suppose it depends on what you replace them with. If you drop an old town house and build a sky- scraper instead, the residential units on the same footprint would go up from a single family to sev- eral hundred people. And if you do it a thousand times… Chetcuti shakes his head. "No, it can't work that way. I am con- vinced that if Malta's developers built up, in six months, everything that can be built in 50 years… then yes, the bubble would burst. But that's not what is happening. As things stand, developers look at things from a long-term perspec- tive… they see what can be built, what can be sold. And projects happen gradually, from year to year. It would be a problem only if they abandoned that long-term view, and built a large number of projects that don't sell… or end up permanently on the backburner. "But luckily – luckily, I stress – Maltese banks are cautious; Mal- tese entrepreneurs (many of whom are members of the Malta Devel- opers' Association) understand the market, and have a good feeling for what sells and what doesn't. And they have to market the project at application stage, before actually committing themselves to it. No- body can afford to build a project out of his own money – because the banks are careful not to invest in unsellable projects – without a clear plan to sell it. Nobody has money to invest in loss-making projects. The projects that are go- ing up today, are selling. I would worry about the bubble only if they weren't." The real danger, he adds, is the unlikely scenario of mass default on development loans. "If banks behaved differently, and lent money imprudently, and then the projects they financed failed… the banks and financial institutions themselves would be exposed. That's when the bubble will burst, but it's not the case. We must be careful to make that distinction…" This is another reason, he adds, not to pay attention to the number of applications. "It's what goes up that counts. I can easily foresee a time – in 30, 40, 50 years – when, yes, Malta will have maybe 15 or so skyscrapers. Those 15 skyscrap- ers will not have been built in six months; they will have been devel- oped over a much longer period of time. It's like car importers. When you want to buy a car, you some- times have to wait six months or so after ordering it. No car importer will import 1,000 cars, keep them in the garage, and sell them slowly over time. They might end up sell- ing 1,000 cars anyway… but only Interview By Raphael Vassallo maltatoday, SUNDAY, 10 JULY 2016 The projects that are going up today, are selling. I would worry about the bubble only if they weren't PROPERTY BUBBLE PHOTOGRAPHY BY RAY ATTARD The bubble is not bursting MEGA-PROJECTS To tell you the truth, all these mega-projects worry me... It would be a lot healthier for all concerned if the wealth was distributed more evenly, and if new projects were based on a small-to- medium scale