Chamber of Real Estate & Builders' Associations, Inc.

A Home for Every Filipino

From the Chairman

Picture of Charlie A.V. Gorayeb

Charlie A.V. Gorayeb

Chairman of the Board, CREBA Chairman, CREBA Advocacy & Legislative Affairs Committee Honorary Consul General, Republic of Djibouti

Redefining Socialized Housing Ceilings

Republic Act 7279 or the Urban Development and Housing Act (UDHA) defines socialized housing as “housing programs and projects undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberalized terms on interest payments, and such other benefits”.

On December 11, 2008, the Housing and Urban Development Coordinating Council (HUDCC) issued Resolution No. 1 which adjusted the socialized housing ceiling from P300,000.00 to P400,000.00 per unit. This was based on a joint review and assessment by HUDCC and the National Economic Development Authority (NEDA) which concluded a 31.1% growth in housing construction and repairs on the Consumer Price Index (CPI) from December 2005 to July 2008.

Recent studies show that there is disparity in the value of socialized housing being implemented by the key shelter agencies. 

While the Pag-IBIG Fund is using the P400,000.00 socialized housing loan ceiling for its loan borrowers, the National Housing Authority (NHA) is using a P240,000.00 resettlement package for the informal sector families (ISFs). The same amount is also being implemented by the NHA for the housing programs for uniformed personnel enlisted with the AFP and PNP.  On the other hand, the Community Mortgage Program (CMP) of the Social Housing Finance Corporation (SHFC) provides a maximum of P165,000.00 financial assistance to its beneficiaries.

With the recent pronouncement by President Benigno S. Aquino III to prioritize the provision of in-city relocation for the ISFs living in danger areas in Metro Manila, this may be the best time for the government to revisit the current socialized housing ceiling and take into consideration the cost of constructing socialized medium-rise buildings (MRB’s). The resettlement package of the NHA and the CMP cap of the SHFC are no longer feasible for in-city relocation as these programs do not sufficiently offset the high value of land, construction materials and labor.

Recent trend of development on housing tends to gravitate towards vertical housing. If we can jointly advocate encouraging more developers to build socialized residential condominiums in urban and urbanizing communities, this will greatly increase the housing stock that will be made available for the homeless poor.

In this regard, the Chamber of Real Estate & Builders’ Associations, Inc. (CREBA) proposes to redefine socialized housing and align this with the ISF Housing Program which is vigorously being pushed by the President. 

A multi-tiered socialized housing price ceiling must be adopted to accommodate the existing government housing programs for the informal sector with a price cap of not more than Php240,000 per unit, while the P400,000.00 ceiling for the formal sector can be retained.

At the same time, socialized housing condominiums with a maximum ceiling price of P750,000.00 per unit must be considered as an alternative form of compliance to the 20% balanced housing required under Section 18 of UDHA, provided that developers of such projects are granted all the applicable incentives provided by law, such as income tax holidays, exemption from VAT and other taxes, and other entitlements for BOI-registered projects.

Now is the time to promote the massive construction of socialized walk-up condominium projects if we are to seriously and effectively address the need for decent and affordable homes in economic centers where employment and other opportunities are situated. 

And while there is no existing law requiring condominium developers to deliver mass housing equivalent to 20% of every project that they build, any new socialized housing unit contributes to the reduction of the housing shortage and provides opportunities for the private sector to perform their corporate social responsibilities.

This segment of the market is so huge and so will be its economic multiplier contributions to the national economy in terms of job creation and fiscal revenues.

Published in the Manila Bulletin August 2012

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