Builders seek changes in Socialized Housing

Builders are pushing for the easing of rules that require subdivision developers to apportion part of their development to socialized housing.


Republic Act 7279 or the Urban Development and Housing Act (UDHA) requires all subdivision developers to build socialized housing equivalent to either 20 percent of the total project area or cost of their main projects. 


Several  bills pending in Congress propose to extend the requirement to developers of condominiums but with more compliance options.


But according to Charlie A. V. Gorayeb, national chairman of the Chamber of Real Estate and Builders’ Associations, Inc. (CREBA), this amendment will be workable if compliance projects for condominiums will be pegged to a more reasonable quota of 5 percent.


Gorayeb said  for subdivisions, it is time to consider a lower quota of 15 percent to make it more realistic and feasible for developers to comply with.


Gorayeb said the group had put this forward in an official position paper sent to members of Congress and the Senate.


“We would like however, that all modes of compliance redound to production of more housing units instead of its former cash and other equivalents,” Gorayeb said.


CREBA said that as an alternative mode of compliance to the balanced housing requirement of UDHA, compliance projects should be allowed to be located anywhere in the Philippines, including urban centers like Metro Manila.


For the past 40 years, CREBA has  proposed legislative and administrative approaches to housing production, finance or regulation.


CREBA  cited government records showing that actual production in terms of housing units since 1992 when UDHA was passed into law has been meager and way below the targets to meet the increasing demand for housing.


The group has also been pushing for the creation of a  new socialized housing package for low-rise condominiums located in urban areas to maximize the use of scarce lands and address homelessness in key cities all over the Philippines.


While the rules have been relaxed to allow for additional modes by which developers of subdivisions can comply with the law, actual production in terms of housing units has been meager and way below the targets to meet the annual compounding housing demand.


Based on the number of licenses to sell issued by the Housing  and Land Use Regulatory Board,  195,807 housing units were supposed to be sold in 2010 and 170,379 units in 2011.


The license to sell refers to developments allowed to be sold for a given  year, but there could be disparity in actual production because not all programmed developments are completed as scheduled. This adds up to the backlog as  actual production cannot  cope up with the demand which also increases every year.


Government hopes  to augment the housing stock and address the almost 4 million units housing shortfall.


CREBA believes that by reducing the requirement to a more reasonable number and at the same time focusing on modes of compliance that redound to additional housing units instead of its cash and other alternatives, developers – big or small – will find it a lot easier, realistic, financially-feasible and effective to comply and new units will actually be added to the housing stock to address the existing gap between housing supply and demand.



Malaya Business Insight, 22 May 2014