SOCIALIZED HOUSING:

FOCUSING ON THE ISSUES AND

OFFERING SOLUTIONS

A closer look at
R.A. 7279, its
provisions, its
IRRs and the
myriad issues
on Section 18;
CLARIFYING THE DEVELOPER’S ROLE

Acquire
Buyer Bank Land
Takeout

Develop
site
UDHP
Build
Houses

Launch
Sales
Buyer
Equity
 1. CLARIFYING THE ROLE OF THE PRIVATE
SECTOR IN THE URBAN DEVELOPMENT AND THE
HOUSING PROGRAM : PRIVATE
SECTOR’S
 In RA 7279, Sec. 2, the “Declaration of State Policy and ROLE
Program Objectives” – clearly states “It shall be the
policy of the State to undertake, in cooperation with the
It is not the
private sector, a comprehensive Urban Development and private sector that
Housing Program, … XXX is mandated with
the responsibility
to provide
 As far as this Act is concerned, the private sector is the socialized housing;
secondary and subsidiary player in this field. Natural
law and the inherent responsibility of the National We also put
Government dictates that it is the State that must care forward the
position that
for and provide decent housing (and/or the means to “cooperation”
attain it) to the underprivileged masses; should not give
rise to a liability
on the part of the
private sector to
produce socialized
housing;
 The role of the private sector is “cooperation” --- in that
the law simply recognizes that it is the private sector RA 7279 does not
that can deliver a portion of the shelter needs with use the word
better efficiency. “compliance”
anywhere in the
letter of the law.
It stresses
“cooperation”;
 THE HOUSING BACKLOG

 Estimated Housing Needs based on the 2010 Census of

Population and Housing:

 By 2017, the Philippine’s housing

needs will total
6.3 million units

Statistical Report
undertaken by the
Statistical Research &
Training Center
2. HAS GOVERNMENT LOST SIGHT OF THE PRIMARY
OBJECTIVE? WHAT IS
REALLY
NEEDED TO
The ultimate objective that gave impetus to the creation of R.A. 7279 INCREASE
over 20-odd years ago was, and still is, the housing backlog.
HOUSING
DELIVERY?
This mammoth figure, at 3.9 million units, has never decreased.
Every year population growth and home depreciation combine to
1. Liberalize
increase this backlog, which, some sources say, has actually
development
ballooned to over 5 million units.
financing
programs;
2. Interest cost
subsidies for
“Uplift the conditions of the underprivileged both
and the homeless in urban areas, developers
by addressing this lack of housing, and end-users;
providing decent homes at 3. Reduction of
affordable cost, providing taxes and
basic services, and providing tariffs on
employment opportunities. “– basic
-- Sec. 2 (a), RA 7279 materials;
4. Implement/
THIS IS THE OBJECTIVE. provide IRRs
for Sections
20 and 21;
 UNDUE TAXATION?
ONLY FOR SUBDIVISION DEVELOPERS ?

 Sec. 28, (1) of Article VI of the Philippine Constitution:

 “The rule of taxation shall be uniform and equitable.” XXX

Philippine
Economy 20 %
SOCIA
Housing LIZE
HOUSI D
Industry REQUI NG
REMEN
Sector T
Subdivision
Developers -
Subsector
 3. A question of Constitutionality?
WHY IS THIS
 Section 18 of RA 7279 imposes a burden on a sub-sector
LAW NOT
of the housing industry – the “subdivision developers”, MADE
and no other economic sector; APPLICABLE
 Residential condominium developers are not mentioned, TO ALL?
nor are any other sectors;
S o , o u r l a w ma k e r s
 One can surmise that this is, then, undue taxation, and may have
is extremely prejudicial to a small sub-sector of the overlooked the
Philippine economy; applicability
aspect?
 The IRRs and the increasingly punitive stance being
taken by housing regulators are now taking its toll on C a n t h ey n o t , s a y ,
the subdivision developers, resulting in reduced i mp o s e a
production of housing in the higher-priced strata of the percentage of a
housing needs pyramid; canned sardine
manufacturer’s
s a l e s t o b e d ev o t e d
 Limited corporate resources and the difficulty of
to socialized
accessing development funding for socialized housing housing?
projects further constricts the ability of developers to
deliver;
Undue Taxation?
 Theoretically, if all these subdivision developers then
Unconstitutional?
shift to documenting their subdivisions as condominiums Prejudicial?
(i.e., CCT instead of TCT), then there will be no delivery
These questions
of socialized housing;
persist.
 NON-COMPLIANCE OF
SOCIALIZED HOUSING COMPONENT

What will happen? Acquire

1. LGUs STOP PROCESSING DEVELOPMENT
Suspend PERMITS
Land
2. BANKS STOP LENDING License to
License to
3. NEW BUYERS TURN AWAY Sell or CDO
4. PREVIOUS BUYERS STOP EQUITY PAYMENTS
Develop
site

No cash flow,
business
cycle stops

-AND-
C E A S E R DE R
DESIST
O Launch
Sales
(CDO) Build
Houses
C-D-O spells D-I-S-A-S-T-E-R.
4. Is there a rationale for the Mode of Punishment imposed GOVERNMENT
on subdivision developers for NON-COMPLIANCE? MUST BE MADE
AWARE O F THIS
The actual letter of the law says “in cooperation with the private sector”--- LOO MING
and this is not embodied in the IRRs; PROBLEM.

Socialized housing
The punitive measure currently employed by housing regulators is the development is
cancellation of the Licenses to Sell of the main subdivision projects of the fraught with
developer, followed by a Cease-and-Desist Order (CDO) that virtually stops the problems.
developer’s operations. Affordability is a
major issue.
Suburban
properties are
To a developer, this is tantamount to DISASTER. LGUs will then prohibit the going up higher in
Click icon to
developer from filing new Development Permits, and will suspend existing
ones, halting all development and selling efforts, completely disabling the
price as time
passes. Socialized
add picture
ability to generate cash flow from sales. Banks, ever watchful in this regard,
will likewise refrain from further funding the projects. Buyers will turn away,
housing has shown
high rates of
and those that already bought will back out and seek reimbursement. default and
foreclosure.
Direct subsidies
Bankruptcy is the ultimate result.
are needed.

NOT punitive
measures.
 SUBDIVISION DEVELOPERS GENERATE HUGE
ECONOMIC ACTIVITY
 Over 60 downstre am GENERATES REVENUES FOR CEMENT
DOWNSTREAM INDUSTRIES STEEL
industries are
IRONMONGERY
dependent LIGHTING
PLUMBING
on the housing DOORS
sector… WINDOWS
WOOD PRODUCTS
LAMINATES
PAINTS
FURNITURE
SUBDIVISION APPLIANCES
DEVELOPERS ROOFING
DESIGN
PLANNING
ENGINEERING
AND MORE…
INCREASES PROPERTY VALUES
INCREASES PROPERTY TAXES

GENERATES EMPLOYMENT GENERATES LOCAL & NATIONAL TAXES

 5. Killing the Goose that lays the Golden Egg?
GOVERNMENT
MUST REVISIT
A developer provides employment for thousands of THE UDHA
workers, considering that there are over 60 downstream
industries dependent on the housing sector. Lawmakers must
amend RA 7279
to address the
A developer generates a huge amount of economic activity.
issue of its
These activities generate taxes for government.
constitutionality;

A developer improves land utilization and therefore, raises

The Housing
property values by several magnitudes. Higher property
Agencies should
values mean bigger tax collections for government, for
redefine the IRRs
decades to come.
and the Circulars
to stress
“cooperation” and
not “compliance”;

Is it, then, fundamentally right for government to cause the On an immediate

bankruptcy of a subdivision developer using “compliance” basis, housing
as a reason? regulators should
allow for a
moratorium until
these issues are
addressed;
 SEC 20 (D) OF RA 7279

 INCENTIVES
in·cen·tive
inˈsen(t)iv/
noun
a thing that motivates or encourages one to do something.
"there is no incentive for customers to conserve water"
synonyms: inducement, motivation, motive, reason, stimulus, stimulant, spur, impetus,
encouragement, impulse;
antonyms: deterrent
a payment or concession to stimulate greater output or investment.
"tax incentives for investing in depressed areas"

EXEMPTION FROM:
1. PROJECT RELATED INCOME TAXES
2. CAPITAL GAINS TAX
3. VALUE-ADDED TAX
4. TRANSFER TAXES
5. DONOR’S TAXES

Very difficult to get, due to restrictive

policies and procedures, No clear IRR
 AMENDMENT
6. Section 20 : Incentives for Private Sector NEEDED FOR
Participating in Socialized Housing SEC 20 OF
RA 7279
“(d) Exemption from the payment of the following:
1) Project-related income taxes; First, the added
2) Capital gains tax on raw lands used for the project; proviso requiring
3) Value-added tax for the project concerned; that all the
4) Transfer tax for both raw and completed projects; and savings accrue in
5) Donor’s tax for both lands certified by the local government units to favor of the
have been donated for socialized;” XXX beneficiaries must
be struck out;
Next, IRRs on this
There are virtually no incentives being granted. Our housing regulators
Section must be
and concerned government agencies have yet to provide the IRRs that created;
will implement this provision.
The housing
agencies already
In addition, (another oversight, presumably) --- a proviso inserted at the provide a cap on
middle of this Section states, “Provided, finally, That all the savings the loanable
acquired by virtue of this provision shall accrue in favor of the amount. This
beneficiaries subject to the implementing guidelines to be issued by should suffice to
the Housing and Urban Development Coordinating Council.” XXX curtail over-
pricing;
These incentives
will spur
The title to this Section is misleading. There are no incentives. affordable
socialized housing
delivery;
 GOVERNMENT’S ROLE UNDER SEC 21

 PHILIPPINE GOVERNMENT’S ROLE IS TO PROVIDE, VIA THE LGUs

OR THE NATIONAL HOUSING AUTHORITY:
a) Potable water;
b) Power and electricity
and an adequate power
distribution system;
c) Sewerage facilities and
an efficient and adequate
solid waste disposal
system; and
d) Access to primary
roads and transportation
facilities

XXX “…in cooperation with the private developers and

concerned agencies…”XXX
 7. Government’s Role -“Section 21. Basic Services. -
Socialized housing or resettlement areas shall be NEED FOR THE
provided by the local government unit or the National IRR FOR SEC
Housing Authority in cooperation with the private
developers and concerned agencies with the following
21 BE
basic services and facilities : CREATED AND
 a) Potable water; ISSUED
 b) Power and electricity and an adequate power
distribution system; The provision of
these facilities
 c) Sewerage facilities and an efficient and adequate
and the
solid waste disposal system; and
incentives
 d) Access to primary roads and transportation facilities” stated in Sec
XXX 20 comprise a
significant cost
reduction for
Clearly, the law is explicit in the “cooperation” aspect of
t h e d e v el o p e r ,
the above provisions. The LGU or the NHA must provide
which will
w a t e r , p o w e r , s e w e r a g e , w a s t e d i s p o s a l , a n d a c c e s s (r i g h t -
result in either
of-way) to primary roads;
reduced
transfer prices
The developer is expected to build the socialized for the house
subdivision and the houses. But the above-mentioned and lot units, or
facilities and utilities are to be PROVIDED by either the mo r e
LGU or the NHA; acceptable
This is the government’s contribution to the “cooperative” l i v i n g s p a c es
partnership with the private sector; (bigger lot
and/or house
areas);
 THE ISSUE OF “COMPLIANCE” OR THE
LACK OF IT
Definition
Definition of
of COMPLIANCE
COMPLIANCE co·op·er·a·tion
co·op·er·a·tion
kō
kōˌˌäpəˈrāSH(
äpəˈ rāSH(əə)n/
)n/
1
1 noun
noun
a
a :: the
the act
act or
or process
process ofof complying
complying to to a
a desire,
desire, the
the process
process of of working
working together
together to
to the
the same
same end.
end.
demand, proposal, or regimen or to
demand, proposal, or regimen or to coercion coercion "they worked in close cooperation with
"they worked in close cooperation with the AAA"the AAA"
b
b :: conformity
conformity in
in fulfilling
fulfilling official
official requirements
requirements synonyms:
synonyms: collaboration,
collaboration, joint
joint action,
action, combined
combined effort,
effort,
2
2 teamwork,
teamwork, partnership, coordination, liaison, association,
partnership, coordination, liaison, association,
:: a
a disposition
disposition to
to yield
yield toto others
others synergy,
synergy, synergism,
synergism, give
give and
and take,
take, compromise
compromise
"cooperation
"cooperation between
between management
management and and workers"
workers"
assistance,
assistance, especially by ready compliance with
especially by ready compliance with requests.
requests.
"we
"we would like to ask for your cooperation in the survey"
would like to ask for your cooperation in the survey"
synonyms:
synonyms: assistance,
assistance, helpfulness,
helpfulness, help,
help, helping
helping hand,
hand, aid
aid
"thank you for your cooperation"
"thank you for your cooperation"
8. The Issue of “Compliance”
One must not forget that the economy of a democracy is profit-driven, and that the
private sector can only operate as a delivery vehicle to answer shelter needs if it can
recover cost and make a profit. Requiring a developer to “donate” or defray the cost of HOUSING
improvements to slums as a way of compliance, is not realistic, because developers REGULATORS
must recover such costs.
MUST REVIEW
Having these costs subsidized by the developer’s main business operation will impact AND AMEND
on the market competitiveness of the developer’s products. A developer, due to the
effect of market forces, may be able to earn a 30% margin on its operations, and EXISTING IRRS
compliance under this Law charges 20% --- That alone already sums up the problem. Government must
avoid being
punitive and
In addition, the private sector is already fulfilling its role in providing an cannot impose
Section 18 in a
answer to shelter requirements on the higher income levels. This must manner perceived
also be taken into account. as undue
taxation.
So, the only practicable way a developer can comply is to deliver Paralyzing the
socialized housing units. Therefore it is but fair for the government to operations of a
developer is not
provide the incentives (Section 20) and the basic utilities and facilities the answer.
(Section 21) to all ongoing socialized housing projects BEFORE it can have Amendment of
the moral and legal ascendancy to impose PENALTIES for NON- these IRRs to
COMPLIANCE. resolve these
issues must be
done on an urgent
note. Likewise,
RA 7279 in actuality, has a mechanism that will reduce costs and transfer creation of the
prices, which are government subsidies in terms of incentives and IRRs for the other
facilities. The present reality is that the government has not done its Sections must be
done without
share, while the private developers are beset by higher costs, and being further delay.
penalized heavily for lack of compliance.
HLURB HAS TO SCRAP ACCREDITATION FOR
SOCIALIZED HOUSING

RED TAPE, COMPLICATES THE

COMPLIANCE PROCESS

SEVERELY IMPAIRS & LIMITS

CAPACITY TO DELIVER SOCIALIZED
UNITS

UNNECESSARY. HLURB ALREADY

HAS CR & LS TO REGULATE BOTH
PROJECT & DEVELOPER
9. Is ACCREDITATION necessary? THE CR & LS
MC 7-B of the HLURB mandates that a developer aspiring for ALLOWS THE
accreditation as a socialized housing developer should have built HLURB TO
at least 500 units (down from the initial 2,000 unit requirement) TAKE THE
under BP 220 and/or PD 957 in order to qualify.
ROLE OF
Moreover, if you are an open market housing developer and you JV GATE-
with a subsidiary in which you own at least 50% or more of the KEEPER
capital stock, you need to show a track record of having built a
minimum of 5,000 housing units. Otherwise, you and your The proper
safekeeping
subsidiary cannot be accredited.
and
extrapolation of
This runs counter to the primary objective of delivering socialized housing to the records on
the underprivileged in the most effective way, in the soonest possible time. the Cert of
This proviso shuts out the smaller developers. In a scenario where the Registration &
backlog stands at 3.9 million units, shouldn’t the government strive to License to Sell
accommodate as many as possible? will suffice to
enable HLURB’s
regulatory role.
The requirements for registering a project and the application for a License
to Sell already provides the HLURB with the means to adequately regulate
both project and developer. Accreditation in order to be allowed to build It is proposed
that the
and sell socialized housing units, more so for compliance purposes, is a
accreditation
needless requirement and simply serves to complicate the process. Not
process for
only does it prejudice the small- and medium-scale developers, it also
socialized
provides an additional difficulty for developers to achieve compliance,
developers be
resulting in impaired socialized housing delivery. dispensed with.
 WHAT ABOUT POOR, SMALL-FRY,
JUAN DE LA CRUZ?

Sec 3 (e) & (f) of RA 7279, simply put, says

that if poor Juan owns a property in an
urbanized area above 300 square meters,
and he has not introduced improvements
upon it within one year of acquisition, he
stands to lose it to the LGU;

DECLARATION AS “IDLE” LAND

If the property is in an “urbanizable”???
301 square meters
area, anything more than 800 sq. meters
may be expropriated.
10. “Idle” Lands – Sec 3 (e) & (f) of RA 7279
NO IRR AS
What about poor Juan de la Cruz? Little does he realize that he himself is affected by YET?
provisions of RA 7279. Very simply put, if Juan owns a property in a highly urbanized area of
Again, the IRR on this
more than 300 square meters or a property in a less urbanized area of more than 800 square must be clearly defined.
meters, he stands to lose this property to the LGUs. Otherwise the magnitude
of the coverage of this
proviso and its
potentials for graft and
“Article IV, Sec 11 states: Section 11. Expropriation of Idle Lands. - All idle lands in urban and corruption cannot be
urbanizable areas, as defined and identified in accordance with this Act, shall be expropriated ignored.
and shall form part of the public domain. These lands shall be disposed of or utilized by the
Government for such purposes that conform with their land use plans. It used to be that the
only problem facing a
Expropriation proceedings shall be instituted if, after the lapse of one (1) year following receipt property owner came
about as a result of the
of notice of acquisition, the owner fails to introduce improvements as defined in Section 3(f) lack, or non-payment of
hereof, except in the case of force majeure and other fortuitous events. Exempted from this property taxes, which
ownership of which is subject of a pending litigation.” XXX results in an enforced
auction of the property
to satisfy the tax
liability.
Unless poor Juan is able to introduce improvements (equivalent to at least 50% of the assessed
value of Juan’s land) to his property within one year of his acquisition thereof, the LGU can Expropriation as a
identify the property as “Idle Land” and expropriate. recourse of the state
was utilized to further
Even the definitions prevailing of what are urban, highly urbanized or urbanizeable areas government projects for
the common good and
escapes me. Each LGU will have their own version of these definitions, which bodes ill for poor for the improvement of
Juan de la Cruz. communities, that is, for
road widening, and
One can simply postulate that an unscrupulous local government official may utilize this construction of public
infrastructure. Now,
proviso to cow, coerce and extort from its citizenry, and/or further political aims, considering with the advent of RA
anything above 300 square meters in the center of town, and any property above 800 meters 7279, a mere
outside of the center, is fair game. declaration that the
property is “idle”
suffices for it to be
expropriated!
 POTENTIAL FOR GRAFT AND
CORRUPTION

 In the
interpretation of
laws, our
implementing
agencies have
the leeway to
either be
progressive or
restrictive. In
most cases, the
attitude is to be
restrictive, if
only because it is
more prudent to
err on the side of
caution. However, reality and the natural order dictates:
THE MORE RESTRICTIVE AND PUNITIVE A LAW OR
REGULATION IS, THE HIGHER THE POTENTIAL FOR GRAFT AND
CORRUPTION.
 Potentials for graft and corruption

 R.A. 7279 is a laudable piece of legislative work in its

concept and intentions. Uplifting the plight of the LET US ALL
underprivileged is a noble ideal. It is in the GO BACK TO
implementation that it falters.
“COOPERATIO N ”
 Whenever, and wherever, the law becomes punitive, and the
Let government
implementation of a law generates prohibitions and
contribute its
processes that translate into red tape, this scenario then
share in the
becomes a fertile breeding ground for potential graft and cooperative
corruption. effort;
 In such situations, the degree of difficulty also sets the
Let non-
amount of the largesse that may be demanded. In the case compliance or
of RA 7279, the manner of its implementation is proving to lack of
be a bane to most, if not all, subdivision developers.   compliance be
penalized by way
 Here we have a potential tool for the unscrupulous to use to of monetized
coerce, and possibly extort, large sums from private sector penalties rather
developers. All in the name of “compliance”. than punitive
Cease-and-
Desist Orders;
Let lawmakers
ponder and solve
 “Cooperation”, which is actually written into the letter of the question of
the law, is being conveniently forgotten. general
applicability of
the UHDA;
 THE IRRS
890-
BOARD
BOARD RESOLUTION
RESOLUTION No.
No. 890,
890, Series
Series of
of 2012
2012
January
January 1,
1, 2013
2013
Revised
Revised Implementing
Implementing Rules
Rules &
& Regulations
Regulations to
to Govern
Govern Sec
Sec 18
18 of
of UDHA
UDHA GOVERNING
Memo
Memo Circular
Circular Nos.
Implementing
Nos. 01-07,
01-07, Series
Series of
of 2013
2013 SEC 18 OF
Implementing Guidelines
Guidelines and
and Procedures
Procedures for
for Board
Board Reso
Reso No.
No. 890,
890, Series
Series of
of
MCs
2013
2013 RA 7279
January
January 2,
2, 2013
2013

MC No. 01, Series of 2013 – Balanced Housing Development

MC01 Concerns Developers complying with Sec 18 by This will
developing the compliance project by itself
present an
MC No. 02, Series of 2013 –
organized
Development of New Settlements
listing, in
MC02
Developers complying with Section 18 By going into joint-ventures with its
accredited subsidiaries or other accredited developers of socialized housing
projects, or by contributing to accredited NGOs‟ new socialized housing
chronological
projects
order, of the
M.C. No. 03, s. of 2013 various Memo
“Slum Upgrading”
MC03
Developers complying with Section 18 by contributing
to NHA„s programs and projects, or by
Circulars issued
purchasing NHA‟s instruments of participation by the HLURB to
implement Sec
MC No. O4, s. 2013
“Joint-Ventures with LGUs and Housing Agencies 18, “Balanced
MC04
Developers complying with Section 18 By going into joint-ventures with the
LGUs or HAs for the development of socialized housing projects or provision of Housing
facilities, centers or amenities
Development”,
MC No. 05, s. 2013 or socialized
“Participation in

MC05
Community Mortgage Program”
Developers complying with Section 18 through contribution and participation in
compliance.
the CMP, including purchase of asset-backed securities

M.C. No. 06, s. of 2013 There is a need

“Accreditation of Developers
for these to be
MC06
of Socialized Housing Projects
Procedure and qualifications for the accreditation of developers of socialized
housing projects to enter into joint-ventures consolidated
and simplified.
 M.C. No. 07, s. of 2013
“Accreditation of Non-Government Organizations SEC 18
MC07
Procedure and qualifications for the accreditation of NGOs to receive
contributions from developers for the development of new socialized NEEDS TO
housing projects

M.C. No. 07B, s. of 2013

BE
“Amending M.C. No. 06, s. of 2013 REDEFINED
MC7B
Reducing the qualification requirement for accreditation of developers
of socialized housing projects from It is true that
2,000 to only 500 housing units built
enforcement is
at best a very
M.C. No. 07A, s. of 2013
difficult job.
“Amending M.C. No. 06 & 07, s. of 2013
MC7A
Application & doc requirements
Reducing the qualification requirement for However, the
accreditation of developers of socialized HLURB &
Memorandum Circular No. 19, s. of 2013 concerned
housing projects from Utilization of Unconstructed Housing Components
agencies should
MC19
2,000 to only 500 housing unitsSocialized
Of Existing built Housing Projects”
provide for a
December 09, 2013
more practical
Memorandum Circular No. 01, s. of 2014 and effective
MC01
“Incentivized Compliance To Benefit implementation
Calamity-Affected Areas”
2014
February 12, 2014 of RA 7279,
utilizing market
forces,
catalyzing
Board Res. No. 843, s. 2009 demand, and
843
Prescribing a period of utilization of
Existing Inventories of Socialized
providing
mechanisms that
will enhance the
Housing Units as Advance
BR 843 isCredits under
referred to in the requirements and capability of the
Sec 18 RA 7279, and Amending
limitations Sec 3
for Advance Credits in MC 019; beneficiaries to
acquire houses.
(d) of IRR
 EXCERPTS FROM THE POSITION PAPER
PRESENTED BY OSHDP
AS THIS
POSITIO N PAP ER
“For OSHDP, these are the problems: SHOWS, EVEN
1.      Production of socialized housing stock is low because there is no real
THE SECTORAL
incentive for the private sector to participate.
1.      Profit margin is low, GROUP OF
2.      Administrative and operational costs are higher (than low-cost or even DEVELOPERS OF
middle cost housing development), and SOCIALIZED
3.      Incidences of turn-over and back-outs are very likely, among others; HOUSING
4.      Sec. 20, RA 7279 incentives are difficult because of the restrictions in PROJECTS
their granting and availment. (OSHDP)
5.      There is a widening gap between the cost of a minimum-standard housing
EMPHASIZE THE
unit and the affordability of a household. Government needs to help the
intended beneficiaries pay (or buy down) their housing loans. LOW REVENUES,
6.      Colliding policies and regulations of various government instrumentalities THE LACK O F
most evident of them are our experiences with the local government units. AFFORDABILITY,
& THE LACK OF
We do not see how the proposed amendments to Sec. 18, RA 7279 in their GOVERNMENT
present form can solve these problems.” xxx INCENTIVES AND
SUBSIDIES.

--- Article published in the Manila Times, (authored by Atty Ryan Tan of OSHDP)
 A FTER M OR E
FINDING A BETTER POLICY: BALANCED THA N 20 YEA R S
DEVELOPMENT HOUSING REQUIREMENT VS. OF IM PLEMEN TIN G
THE U HDP,
MARKET/ECONOMIC FORCES
THE H OU SIN G
If housing is essentially an economic function where the fundamentals of supply BACKLO G N O W
and demand is to be observed, private developers will be willing to supply STA N DS AT A
socialized housing units if there is an effective demand. As a matter of fact, MA SSIVE N UM BER
there may be no need for balanced housing development requirement if we OF O VER 5. 0
follow this principle. Policy must simply be realigned to let the market forces MI LLIO N UN ITS,
work. A FFECTIN G CLOSE
TO 20 % O F THE
Housing needs do not necessarily translate to effective demand because of the TOTAL
issue of affordability. Government must elevate those “underprivileged and PO PU LA TI ON .
homeless” members of our society to a level where they can actually afford the
minimum design standard housing unit. Then, their housing needs will become
effective demand; and effective demand will drive up housing supply. TO SO LVE TH I S,
This is where subsidy comes in – to influence the behavior of the THE G OVE RN MEN T
“underprivileged and homeless” and give them access to housing stock. MU ST CH A NG E ITS
It is our position that the state must step up its direct subsidy program, because STA N CE FR OM
indirect subsidies are clearly not enough. “PU N ITIVE” TO
“CO OPERA TIVE”.
What is concerning us in the private sector is the seeming governmental
attitude of passing on its obligation to provide housing for the poor by IT M UST R EALI ZE
compelling developers to produce socialized housing, even if it is not in line with THA T TH E PR IVA TE
their business. This is the impetus for Sec. 18, RA 7279. DEVELOPMEN T
SECTO R ’S R O LE IS
--- Article published in the Manila Times, (authored by Atty Ryan Tan of OSHDP)
PI VO TA L.
 Click icon to add picture
RECOMMENDATIONS:

1
An
An in-depth
in-depth review
review of
of HLURB
HLURB
Government
Government has has the
the primary
primary Board
Board Resolution
Resolution No.
No. 890
890 and
and
responsibility
responsibility ofof providing
providing its
its resulting
resulting Memo
Memo Circulars
Circulars
housing
housing toto the
the should
should be undertaken by
be undertaken by the
the
underprivileged.
underprivileged. Committee
Committee on Housing and all
on Housing and all
“Cooperation”
“Cooperation” should
should not
not give
give concerned agencies with the
concerned agencies with the
rise
rise to a liability on the part of
to a liability on the part of objective
objective of
of revising
revising the
the IRRs
IRRs of
of
the
the private
private sector
sector to
to produce
produce RA
RA 7279
7279 to
to properly
properly
socialized
socialized housing;
housing; implement “cooperation”;
implement “cooperation”;

2 Heads
Heads of
of housing
housing agencies
agencies
Solving
Solving the
the housing
housing backlog
backlog of
of must
must again
again be
be reminded
reminded by
by
over
over 5
5 million
million units
units is
is the
the the
the Office
Office of
of the
the President
President and
and
government’s
government’s primary
primary Congress
Congress ofof the
the primary
primary task
task
objective;
objective; of addressing the backlog;
of addressing the backlog;
3 Click icon to add RECOMMENDATIONS:
picture
Justice
Justice delayed
delayed isis justice
justice denied.
denied. The
The Committee
Committee on on Housing
Housing
After
After 21 years, lawmakers must
21 years, lawmakers must bebe should
should hold a series of
hold a series of
given a wake-up call to properly
given a wake-up call to properly public
public hearings
hearings that
that will
will
amend
amend RA RA 7279
7279 & & eliminate
eliminate thethe identify
identify the
the inequities
inequities and
and
inequities
inequities therein,
therein, that
that serve
serve to
to other
other items
items requiring
requiring
prejudice
prejudice and
and penalize
penalize onlyonly a
a amendment
amendment of of RA
RA 7279.
7279.
specific sub-sector of the housing
specific sub-sector of the housing The current bill being
The current bill being
industry;
industry; discussed
discussed must
must take
take all
all the
the
issues
issues into
into account;
account;

4 There Extremely
Extremely punitive
punitive
There is
is a
a need
need to
to urgently
urgently redefine
redefine
the penalties imposed on non- measures
measures such as
such as
the penalties imposed on non-
compliance, withholding
withholding issuances
issuances ofof
compliance, in
in order
order to
to avert
avert a
a
looming financial crisis facing new
new licenses
licenses toto sell
sell and
and
looming financial crisis facing
affected cease-and-desist orders
cease-and-desist orders
affected major
major developers
developers inin the
the
residential should
should be
be eliminated
eliminated inin the
the
residential development
development sector;
sector;
penalties for non-
penalties for non-
compliance
compliance imposed
imposed on on
A
A current
current main
main project
project of
of a
a developers.
developers. Monetized
Monetized
developer
developer should
should not
not be
be stopped
stopped in
in penalties
penalties should instead
should instead be
be
mid-stream due to lack
mid-stream due to lack ofof adopted, bearing in mind
adopted, bearing in mind
compliance,
compliance, immediately
immediately impairing
impairing that
that the
the punitive
punitive measures
measures
his
his main
main business
business operation,
operation, and
and may
may result
result in
in serious
serious
further
further impeding
impeding his
his efforts
efforts to
to fund
fund damage
damage to to the
the developer’s
developer’s
the
the compliance
compliance projects;
projects; business.
business.
 Click icon to add RECOMMENDATIONS:
picture
5
Restrictive
Restrictive and
and punitive
punitive measures
measures The
The fact
fact that
that private
private residential
residential
currently
currently being implemented are
being implemented are developers
developers generate a
generate a huge
huge
taking
taking too large a toll. There is a
too large a toll. There is a amount
amount of economic activity is
of economic activity is
need to assess the overall cost
need to assess the overall cost to to being discounted. Government
being discounted. Government
the
the economy
economy andand to
to government
government has
has to
to compute
compute thethe cost-benefit
cost-benefit
revenues
revenues if
if subdivision
subdivision developers
developers ratio
ratio of
of the
the results
results of
of punitive
punitive
go
go out of business as a result
out of business as a result of
of action
action versus the loss of
versus the loss of tax
tax
these measures;
these measures; revenues from this sector.
revenues from this sector.

6 As
As embodied
embodied in in Sec
Sec 20
20 of
of RA
RA
7279, the Housing Agencies
7279, the Housing Agencies
The
The concerned
concerned agencies
agencies must
must and
and the
the Department
Department of of Finance
Finance
liberalize the access to incentives
liberalize the access to incentives should
should immediately
immediately finalize
finalize the
the
provided
provided for
for in
in Sec
Sec 20,
20, by
by creating
creating IRR
IRR for
for Sec
Sec 20
20 (Incentives),
(Incentives), and
and
and issuing an IRR that simplifies
and issuing an IRR that simplifies provide for penalties
provide for penalties toto
the
the grant
grant process;
process; government
government officials
officials and
and
personnel
personnel who impede or
who impede or
refuse
refuse implementation;
implementation;
 Click icon to add RECOMMENDATIONS:
picture
7 The
The IRR
IRR for
for Sec
Sec 21
21 should
should
Government’s
Government’s “cooperative”
“cooperative” role
role is
is immediately
immediately be created and
be created and
embodied in Sec 21, in which
embodied in Sec 21, in which the the issued,
issued, directing the LGUs or
directing the LGUs or the
the
LGU
LGU or
or the
the NHA
NHA isis tasked
tasked to
to NHA to deliver the facilities
NHA to deliver the facilities and and
provide basic facilities & services.
provide basic facilities & services. utilities
utilities required
required under
under RARA
An
An IRR
IRR is
is needed,
needed, as as well
well as
as 7279.
7279. Non-delivery
Non-delivery by by these
these
provisions
provisions for
for enforcement;
enforcement; agencies
agencies will absolve the private
will absolve the private
developers of “non-compliance”,
developers of “non-compliance”,
and
and provisions
provisions forfor penalties
penalties
should
should be be included
included against
against LGU
LGU
&
& NHA
NHA officials
officials who
who violate
violate this
this
proviso;
proviso;

8
MORATORIUM:
MORATORIUM:
It
It is
is but
but fair
fair for
for the
the Government
Government to to
provide the incentives (Sec
provide the incentives (Sec 20) and20) and Until
Until the
the IRR
IRR for
for Sec
Sec 21
21 is
is
the
the basic
basic utilities/services
utilities/services (Sec
(Sec 21)
21) promulgated, the HLURB
promulgated, the HLURB
to
to all
all ongoing
ongoing socialized
socialized housing
housing should
should allow
allow a
a moratorium
moratorium on on
projects
projects before
before itit can
can have
have the
the the
the issuances
issuances of
of suspension,
suspension,
moral
moral and legal ascendancy to
and legal ascendancy to cancellation,
cancellation, and/or cease-and-
and/or cease-and-
impose penalties for
impose penalties for non- non- desist
desist orders of licenses to
orders of licenses to sell
sell
compliance;
compliance; affecting main development
affecting main development
projects;
projects;
 Click icon to add RECOMMENDATIONS:
picture
9 We
We recommend
recommend the
accreditation
accreditation process
the removal
removal of
process for
of the
the
for socialized
socialized The
The proper
proper safekeeping
safekeeping and and
housing
housing developers.
developers. ThisThis extrapolation
extrapolation of the records on
of the records on
unnecessarily
unnecessarily increases HLURB’s
increases HLURB’s the Cert of Registration
the Cert of Registration & &
workload, and is redundant,
workload, and is redundant, License
License to
to Sell
Sell will
will suffice
suffice to
to
considering
considering that
that the
the Board
Board already
already enable
enable HLURB’s
HLURB’s regulatory
regulatory role.
role.
has
has registration
registration and
and regulatory
regulatory control
control
of
of the
the projects
projects and
and the
the developers,
developers, viavia It
It is
is proposed
proposed that
that the
the
the
the CR and the LS. In addition, this is
CR and the LS. In addition, this is accreditation
accreditation process for
process for
a highly restrictive requirement in
a highly restrictive requirement in that that
socialized developers be
socialized developers be
small
small developers
developers are are denied
denied the
the dispensed
dispensed with.
with.
chance
chance toto participate;
participate;

Eliminate
Eliminate Article
Article IV,
IV, Sec
Sec 11.
11. This
10 proviso will simply result in
This
potentials
proviso will simply result in potentials
for
for abuse
abuse byby those
those inin power.
power. In In the
the
Lawmakers
Lawmakers should
should revisit
revisit and
and case of non-payment of taxes, the
case of non-payment of taxes, the
amend
amend SecSec 33 (e)
(e) && (f),
(f), defining
defining government
government has has both
both moral
moral and
and legal
legal
“Idle
“Idle Lands”
Lands” and
and the
the compliance
compliance basis.
basis. In
In this
this particular
particular case,
case, the
the
mechanism for landowners
mechanism for landowners government’s
government’s right of eminent domain
right of eminent domain
(improvement),
(improvement), andand strike
strike out
out requires
requires a reason for expropriation that
a reason for expropriation that
Article
Article IV, Sec 11, of RA 7279 –
IV, Sec 11, of RA 7279 – shall “benefit the general public”.
shall “benefit the general public”.
Expropriation
Expropriation ofof Idle
Idle Lands,
Lands, asas Simple
Simple expropriation
expropriation due due toto failure
failure to
to
these
these provisions
provisions areare all
all too
too prone
prone do
do improvements
improvements within
within one
one (1)
(1) year
year
to
to abuse
abuse byby persons
persons in in authority;
authority; from acquisition is confiscatory and
from acquisition is confiscatory and
punitive.
punitive. In
In addition,
addition, this
this is
is already
already
redundant
redundant with Sec 19, RA 7160, which
with Sec 19, RA 7160, which
clearly
clearly defines
defines expropriation
expropriation by by LGUs;
LGUs;
 Click icon to add picture
A most compelling reason to URGENTLY amend RA 7279 and
immediately redefine the IRRs (Memo Circulars):
END OF
The potential for GRAFT and CORRUPTION RECAP
Subdivision
Subdivision developers,
developers, faced
faced with
with
R.A.
R.A. 7279
7279 isis a
a laudable
laudable piece
piece of of the
the stoppage
stoppage ofof their
their main
main
legislative work in its concept and subdivision
legislative work in its concept and subdivision projects
projects and
and the
the resulting
resulting P r ep a r ed by :
intentions.
intentions. Uplifting
Uplifting the
the plight
plight ofof the
the loss
underprivileged loss of operational cash flows, will
of operational cash flows, will Fernando
underprivileged is a noble ideal. It is
is a noble ideal. It is easily succumb to demands for
in
in the
the implementation
implementation that that it
it falters.
falters.
easily succumb to demands for Bondoc
largesse,
largesse, in
in exchange
exchange forfor a
a less
less
punitive C a g u i ñ g i n , C PA
EVEN
EVEN THE
THE SECTORAL
SECTORAL GROUP
GROUP OF
OF punitive stance
stance from
from regulators.
regulators.
DEVELOPERS OF SOCIALIZED
F o r m e r D ir e ct o r ,
DEVELOPERS OF SOCIALIZED
HOUSING
HOUSING PROJECTS
PROJECTS (OSHDP) In Ho m e G u ar an t y
(OSHDP) In the
the near
near future,
future, the
the difficulties
difficulties
EMPHASIZE
EMPHASIZE THE
THE LOW
LOW REVENUES,
REVENUES, THE
THE involved C or p or at io n an d
LACK OF AFFORDABILITY, & THE involved with developing socialized
with developing socialized
LACK OF AFFORDABILITY, & THE projects p r a c t ic in g
LACK
LACK OF
OF GOVERNMENT
GOVERNMENT INCENTIVES
INCENTIVES
projects hand-in-hand with the
hand-in-hand with the
“main” projects of a developer, De v el op m e nt
AND SUBSIDIES.
AND SUBSIDIES. “main” projects of a developer,
following C on s ul t a nt
following the
the inequitable
inequitable 20%
20% ratio,
ratio,
“Main will
will result
result in
in shortfalls
shortfalls of
of the
the required
required
“Main Project”
Project” developers,
developers, whowho
answer
answer the need for
the need for housing
housing ofof the
the deliveries.
deliveries. New Licenses to Sell will
New Licenses to Sell will A nd
higher income levels, are penalized,
higher income levels, are penalized, not be processed, existing ones
not be processed, existing ones will will
not
not for
for any
any violations
violations committed
committed with be
with be suspended
suspended or or cancelled,
cancelled, Cease-
Cease- P e d r o C . Ta r i o ,
their
their main projects --- but for lack of
main projects --- but for lack of and-Desist
delivery of socialized units that are, and-Desist Orders
Orders will
will be
be issued.
issued. L ice n se d R E B r o k er
delivery of socialized units that are, Faced
actually,
actually, the
the government’s
government’s sole sole
Faced with
with a a choice
choice between
between a n d C o n su lt a n t ,
responsibility in the first place; BANKRUPTCY and CORRUPTION,
BANKRUPTCY and CORRUPTION,
responsibility in the first place; I m m ed ia t e P a st
even
even YOU
YOU will
will PAY
PAY THE
THE PRICE.
PRICE. C ha ir m an , C RE B A