New law hoped to curb housing backlog


A new law has redefined socialized housing to include residential condominium units and has amended provisions for balanced housing development.

Republic Act. No. 10884, otherwise known as An Act Strengthening the Balanced Housing Development Program, amends Republic Act No. 7279 (The Urban Development and Housing Act of 1992).

This act was not signed by former President Aquino but it had lapsed into law on July 17, 2016. It became effective in August last year but its implementing rules and regulations are yet to be approved, according to the Housing and Land Use Regulatory Board (HLURB).

Salient points

As amended, Section 3 (r) of RA 7279 now defined socialized housing to refer to housing programs and projects covering houses and lots or homelots only or residential condominium units undertaken by the government or the private sector for poor and homeless Filipinos.

Amendments on Section 18 of RA 7279 on balanced housing also mandated not only property firms with subdivision projects to develop an area for socialized housing.

This time, the owners and/or developers of the condominium projects are also covered by RA No. 10884.

The area to be developed for socialized housing for subdivision projects was reduced from at least 20 percent to at least 15 percent of the total subdivision area or total subdivision project cost, while for condominium projects, the socialized housing compliance is at least 5 percent of the condominium area or project cost.

Reducing backlog

“The law not only encourages us to develop new communities but also prompts us to also put up medium-rise socialized condominiums in urban areas nationwide that may help in lessening daily suburban commute and traffic congestion,” said PA Properties president and CEO Romarico Alvarez in an interview with the Inquirer last year.

Vice President Leni Robredo had said before her resignation as the chairperson of the Housing and Urban Development Coordinating Council (HUDCC) that the total housing backlog could reach 5.7 million units.

This translates to a need to build 2,602 homes a day during the six-year term of President Duterte.

The Chamber of Real Estate and Builders’ Associations Inc. said in a statement that it was optimistic the newly passed law would help lessen the country’s housing backlog as the law removes “stumbling blocks to socialized housing production.”

Creba national president Charlie Gorayeb added the 20 percent quota was “unrealistic” to effectively elicit compliance.


How should owners and/or developers comply? There are three main ways, according to the law:

Development of socialized housing in a new settlement;

Joint venture projects for socialized housing with either the local government units, with any of the housing agencies, with another private developer or with a nongovernmental organization engaged in the provision of socialized housing and duly accredited by the HLURB; and

Participation in a new project under the community mortgage program.

Compliance to the law will allow developers to avail of incentives for their projects including exemption from the payment of project related income taxes; capital gains tax on raw lands for the project; value-added tax for the project contractor; transfer tax for raw completed projects; and donor’s tax for lands donated for socialized housing.

A socialized housing certification issued by the HLURB is enough requirement to avail of the exemptions.

If an owner or developer fails to comply, the penalty is a fine of not less than P500,000 on the first offense, and the cancellation of license to do business on the third offense.

On the second offense, the penalties include suspension of license to do business for a period of three to six months and a fine of not less than P500,000.

By: Minerva Generalao – Research Department Head / @Inq_Researchers
Philippine Daily Inquirer / 01:11 AM March 25, 2017