Modes of compliance to address 3.6M housing backlog

We are commending Vice President Jejomar C. Binay for his calculated mandate as chairman of the Housing and Urban Development Coordinating Council (HUDCC), to implement effective measures that will address the 3.6-million housing backlog. Among his latest directives is for the key shelter agencies of government to move in the direction of building 250,000 units annually to alleviate the housing shortage.

Vice President Binay has instructed HLURB Chief Executive Officer and Commissioner Atty. Antonio M. Bernardo to conduct a public hearing among developers where they can give their comments and recommendations on the proposed modes of compliance of Republic Act7279, specifically Section 18 (Balanced Housing Development) of its implementing rules and regulations.

As the country’s largest umbrella organization of stakeholders from the allied industries of housing, construction, and real estate development, the Chamber of Real Estate & Builders’ Associations, Inc. (CREBA) has submitted the following recommendations, among them several alternative modes of compliance:

1. Inasmuch as socialized housing developers are mandated to observe a maximum selling price for socialized housing projects, we propose a cap of Php250 per square meter on the acquisition cost of rawland to be developed into socialized housing;
2. We propose likewise the inclusion of joint venture projects between two developers, one being actually engaged in socialized housing development, to take full advantage of his experience and expertise in such particular segment. To ensure compliance, the joint venture project shall be required to apply for its own license-to-sell, and its records shall be kept apart from the other records of their respective existing projects.
3. Purchase of Housing Bonds issued by government housing agencies which shall earn an interest of 4 percent per annum. The amount of housing bonds to be purchased shall be equivalent to 20% of the total project cost of the main subdivision project to be developed. Purchase of these bonds shall correspond to the phasing of development of the project under the monitoring and control of HLURB. However, the proceeds from these bonds shall be used solely to provide loans for socialized housing developers and to finance the purchase of units by socialized housing beneficiaries;
4. Development of socialized residential condominiums with a maximum selling price of P1,OOO,OOO per unit and a minimum floor area of 20 square meters provided that the project is located in urbanized areas.

We in CREBA adhere to our position that any form of alternative compliance to the balanced housing requirement should serve to make it easier for developers to comply with the requirement, while still being able to attain the social objective of the law.

At the same time, we would like to remind the government of its corresponding obligation: To ensure a continuous funding support for the developers for their socialized housing projects. Our developers maintain that compliance to RA 2729 through the production and delivery of socialized housing units will primarily depend on the existence of a responsive government playing its role as catalyst and enabler under a conducive environment.

We also recommend that the government start developing more aggressively the secondary mortgage market, which can be a very huge source of funding requirements for housing. Further measures can be installed to reduce the prevailing interest rates and make socialized housing even more viable and affordable for the market. Ergo, this can be one of the cost-effective solutions to targeting that 3.6-million housing backlog.

Although this may appear as a tall order, we believe that the Vice President will no doubt support the HLURB’s mission, considering his peerless record in public office. The former mayor of the country’s biggest business financial district has proven his mettle as a public official who believes in strict enforcement of the law, and addressing the needs of his constituents. We believe that given his current role as Vice President, he would be just as effective and committed to delivering results that can be enjoyed by the majority.