Socialized housing challenges continue to hound developers

By Catherine Talavera (The Philippine Star) | Updated September 15, 2017 

[Philstar Global] MANILA, Philippines —  While stakeholders in the country's property sector are committed to do their part in quelling the growing backlog in housing, several hurdles, particularly on the regulation side, continue to pose a challenge to developers.

Subdivision and Housing Developers Association (SHDA) president Christopher Narciso said the country's housing backlog has reached 6.7 million as of 2015, based on their Housing Roadmap to 2030 plan update.

Narciso said the Center of Research and Communication of the University of Asia and the Pacific, SHDA's partner for the study, updated the roadmap last year and based it on the output of all of the developers and all private housing units put up every year, and as well as adjusting all the economic and statistical data.

 “And this includes the 800,000 plus who cannot afford even the cheapest socialized housing unit. The poorest sector of society will need a lot of government and private subsidy and this is acknowledged worldwide,” he said.

But even as private developers want to do their share in addressing the growing backlog for housing, Narciso said they remain challenged by a number of hurdles in the production of socialized housing units.

“There are supposed mechanisms and laws in place to favor the production of socialized, but certain hurdles are preventing that from materializing. Ergo, it's very tedious for private developers to get into socialized,” Narciso said.

He explained private developers would rather cater to other market segments than to pursue socialized housing projects mainly due to economic principles.

“If the effort I put into this is the same as I put into this, but I get lesser returns here, the tendency because of economic principles is, more developers will flock to the economic and mid-cost side of the pie,” he said.

One of the hurdles developers face in putting up socialized housing projects is the conflict between national laws and ordinances given by local government units, he said.

He cited while it is feasible for socialized housing projects to be done in some provinces due to the affordability of land, some provinces have issued ordinances banning the development of socialized housing projects in their area. 

“But the national law states that if it's not feasible, it can be done anywhere. We need to get the cooperation of all parties,” Narciso stressed.

“There are some cities where it is not suitable to have socialized housing given the high assessment value of land already and yet will insist the socialized housing units be done in their cities,” the SHDA official added.

Narciso emphasized that while the housing industry already has a roadmap in place and as well as the presence of regulators such as the Housing and Urban Development Coordinating Council(HUDCC) and the Housing and Land Use Regulatory Board(HLURB), it also needs the support of local government units to strengthen the campaign against the growing housing backlog.

HLURB commissioner and chief executive officer Lloyd Christopher Lao expressed the same sentiments as he mentioned that there is a need to harmonize the permits procedures in the housing industry.

In line with this, Lao said the regulatory board is looking to consult with stakeholders in property industry and as well as government agencies involved in the permits procedures for socialized housing.

“The best way is talk. You don't need a law, but we need consensus between the developers, the local government units and the mayors or governments, as well as HLURB. So our job is more on proactive,” Lao said.

While laws are already in place to help address the growing backlog, particularly the Urban Development Housing Act (UDHA) law, Narciso said developers find it difficult to comply given the lack of cooperation from all parties, including local government units and agencies.

Under the amended UDHA, or the Balanced Housing Development Act or Republic Act 10884, subdivision developers are mandated to allocate 15 percent of their total project area for socialized housing, while condominium developers are required at least a five percent allocation.

According to earlier reports, HUDCC Assistant Secretary Avelino Tolentino III said developers have to go through 27 offices to secure 79 permits and 373 documents that have a total of 146 signatories.

Lao said the permits process should be streamlined because the prolonging the procedure will result to more costs, which may result to higher prices of housing units.

He added that there is a need for government agencies to trust each other in order to harmonize the permits procedures.

“We should start with a position of trust between agencies, not distrust,” Lao said.

Lao emphasized that the problem with government agencies is that everyone is trying to protect their own interest.

“That's not an issue of corruption, it's an issue of policy and agency supremacy. Everybody thinks their agency is supreme,” Lao said.

Moreover, the HLURB official said there is also a need for change within the regulatory board, saying that it should focus on rehabilitation instead of merely penalizing those who committed offenses.