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From the Chairman

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

Socialized Condos in Urban Areas

The Housing and Land Use Regulatory Board (HLURB) is one of several agencies of government undertaking a revisiting of its policy through the reform of the implementing guidelines governing the modes of compliance to Section 18 of R.A. 7279 or the Urban Development Housing Act (UDHA).

We, in the Chamber of Real Estate & Builders’ Associations, Inc. (CREBA), adhere to our position that any form of alternative compliance should serve to make it easier and attractive for the private sector to comply, and still be able to attain its social objectives. CREBA commends the HLURB for providing developers more avenues to comply with the law, and at the same time effectively uphold its core and crucial mandate to deliver housing units for the marginalized beneficiaries.

Homelessness points to several major factors: urbanization caused by massive migration from rural to urban areas due largely to extreme rural poverty, lack of opportunity, peace and order issues, unemployment, forced evictions and distant relocation, unaffordable housing or the lack of capacity to acquire decent shelter, clamour for basic social services, and list goes on.

Sources from the World Bank report that with an annual growth in urban population of 5.1 percent in the last four decades, the Philippines had one of the highest rates of urban growth in the developing world. Data from the United Nations confirm that about 60 percent of the country’s population is currently urban.

The Greater Metro Manila area has over 12 million people. This accounts for 36 percent of the total urban population. An additional 10 percent of the urban population are situated in the next four largest metropolitan regions as identified by NEDA: Metro Cebu, Metro Davao, Metro Cagayan de Oro and Metro Angeles.

While government and other affected sectors confront the myriad challenges brought about by the concentration of people in the cities in terms of productive employment and production of adequate housing and basic services, it will no longer be enough to merely try to slow the rate of urbanization without improving the system to more productively handle rapid demographic growth.

Among CREBA’s package of proposals for the private sector to efficiently do its share in helping address the staggering housing backlog of over 3.7 million units is to urge government to encourage the construction of socialized and low-cost residential condominiums with a minimum floor area of twenty (20) square meters provided that the project is located in urban or urbanizing areas.

Under this proposal, CREBA invites government to consider this type of development as an alternative mode of compliance to the balanced housing requirement of the UDHA with all the applicable incentives as provided for by existing laws, such as income tax holidays, exemption from VAT, and such other incentives for BOI-registered projects.

Projects may come in either of the following packages: (1) socialized 5-storey walk-up condominiums with a maximum ceiling price of Php750,OOO.00 per unit; or (2) low-cost 6 to 12­storey condominiums with elevator with a maximum ceiling price Php1.2M per unit.

This type of development particularly targets the urban dwellers who will naturally prefer locations near urban development centres, where walking or short travels from place of residence to work, education, and other purposes is vital to the budget. At the same time, this will provide low-income earners access and opportunity to safe and decent shelter in the city that they can eventually own, for a price that they can afford.

Building vertical residential communities is as timely as it is extremely necessary to start creating opportunities out of the growing scarcity and increasing cost of land in the cities -the centre of business activities, employment, livelihood, education and other inevitable services where demand for decent and affordable housing – as well as the issue of traffic – is at its peak.

With a burgeoning population of close to 100 Million Filipinos as of 2010, which is continuously growing at the rate of 1.9% every year, it is easy to infer the enormity of the demand for social and other basic services in the next few decades.

Along with food and clothing, shelter is considered one of mankind’s most basic needs. But the land under our feet cannot be multiplied to match our needs. To optimize the use of land and multiply its benefits, we must plan ahead and begin building vertical communities where families can grow and thrive as a social unit, now before it is too late.

In order to realize the effective increase in annual national housing production target of at least 300,000 new houses in all segments annually, however, government must rationalise the incentives program for housing to ensure that all incentives offered by specific agencies are synchronized and are made as easy and practicable to avail of as possible.

To assist the private sector in fulfilling its role in the production and delivery of socialized housing units, the government must perform its mandate as catalyst for growth and national development. It must therefore eliminate red tape, particularly in the Bureau of Internal Revenue (BIR) where documentary requirements are duplicated and provisions of related laws are ignored. This has been one of the biggest stumbling blocks to socialized and low-cost housing delivery.

What is needed is less bureaucracy, quicker release of the necessary licenses and permits, more loanable funds from government financing institutions, better incentives for real estate developers, and a clear identification of lands that may be set aside for residential, agricultural, commercial, industrial, and other equally vital uses that are already governed by various existing laws.

Published in the Manila Bulletin October 2011

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