Last July 18, the Housing and Land Use Regulatory Board (HLURB) issued Memorandum Circular No. 07-A which amends, among others particular sections of Memorandum Circular No. 06 released earlier this year.
The memo sets the requirement for developers of socialized housing projects who wish to be accredited so that they can enter into joint ventures (JV) with developers of main subdivision projects. This is for the purpose of building new projects that are compliant with Sec. 18 or the balanced housing provision of the Urban Development and Housing Act (UDHA) was adjusted.
Before, only developers who have built no less than 2,000 socialized housing units can apply. Now, the cap is down to 500 units and coverage was further expanded to include both horizontal and vertical developments with prices covered by BP 220 and PD 957.
The Chamber of Real Estate & Builders’ Associations, Inc. (CREBA) however, still contends that the requirement, even at its adjusted state, will deny many small, medium and new developers of the privilege to avail of this particular mode of compliance to the balanced housing program, not to mention that feeling of being discriminated upon.
Among the available modes of compliance in the present implementing rules, the development of new settlements through joint venture partnerships between two private developers is one of the most attractive as it offers cost recovery, albeit minimal, for developers who are putting in substantial efforts and investments in a project.
In order to ascertain the track record and trust-worthiness of the applicant-developer, it should suffice that the key company officers have established themselves as a socialized or non-socialized housing developer by having been able to develop at least one project.
The project must have no pending case and/or derogatory record in the national and any regional field office of the HLURB; and no record of suspended or revoked accreditation unless otherwise cleared or reinstated by the HLURB CEO.
This will allow newly-formed companies to participate in the program, provided that the personalities managing its affairs have the right amount of experience and expertise in their respective fields garnered in their capacity as executives of pre-existing real estate development companies.
If the HLURB is concerned on how to cloth the guidelines with enough safeguard measures, Rule IV, Sec. 13 of MC No. 6 already states that an accredited developer may be meted with suspension and revocation of accreditation at any point in the project on the following grounds:
- Issuance of a CDO against the developer for any of its projects;
- Suspension or revocation of the LS of any of the developer’s projects;
- Failure of the accredited developer to complete development of compliance project within one year from issuance of its LS or within such period of time fixed by HLURB.
As more units are produced, the benefits to the local and national economies that emanate from increased construction activities transcend at least 68 peripheral industries.
Likewise, more projects help increase the socialized housing stock which can then be made available to the homeless poor, thereby reducing the housing shortfall.
Finally, we reiterate that since the developer of the main subdivision project shall be solidarily liable with the developer of the socialized housing for the complete development of the compliance project irrespective of the provisions of their JV agreement (Sec. 4.1.1 of Board Resolution 890), the above qualifications and disqualifications are sufficient to ensure that the compliance project resulting from the partnership will be delivered.
Published in the Manila Bulletin September 2013