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Senate housing committee recommends three-year extension of Rent Control Law

Vol. XXII, No. 185 [ BusinessWorld Online ]

Thursday, April 23, 2009 | MANILA, PHILIPPINES


THE SENATE committee on urban planning, housing and resettlement has approved a measure that will protect housing tenants from unscrupulous rent increases for three years, with its principal author seeking plenary approval of the proposed law before sessions adjourn on June 5.

Senate Bill (SB) 3163 or "An Act Establishing Reforms in the Regulation of Rent of Certain Residential Units, Providing Mechanisms Therefore and for Other Purposes" seeks to limit rent increases by not more than 10% for three years or until December 21, 2011.

The measure is a substitute to SB 2884 authored by Senate Majority Leader Juan Miguel F. Zubiri and SB 3030 authored by Senator Ramon "Bong" Revilla, Jr.

Under the bill sponsored by committee chairman Senator Rodolfo G. Biazon, all residential units in Metro Manila and other highly urbanized cities where monthly rental does not exceed P10,000 and P5,000 for other areas are covered by the proposal.

By the time the proposal lapses, the Housing and Urban Development Coordinating Council (HUDCC) will be authorized to study if the industry needs to be regulated or deregulated. The housing regulator will also determine the duration of the regulation or deregulation, residential units covered and rental limits.

The Senate committee had proposed a permanent setup to do away with periodic reviews and extensions, with the Rent Control Law tracing its roots since 1947 and had been perdiodically extended through various fiats.

But the panel has "considered" the position of housing owners that is why a technical working group which crafted a final version of the measure proposed a three-year mechanism, said Mr. Biazon in a telephone interview.

"It [bill] will protect the interest of the tenants who are reeling from the economic crisis. This is another welcome respite for them and at least it will help these tenants from unscrupulous increases by landowners or landlords," said Mr. Zubiri in an interview, adding that about 1.5 million families are renting based on the 2007 statistics.

Republic Act 9341 or the Rent Control Act of 2005, which had set a 10% annual limit to such increase, expired last December 31.

The counterpart bill at the House of Representatives, House Bill 6098,was approved on second reading on April 15. The House version sets the annual cap on rent increases at a lower 4% for units being rented out for not more than P10,000 per month in Metro Manila and other highly urbanized cities, and not more than P5,000 in other parts of the country.

It also sets a one-year moratorium on rent increases upon effectivity of the proposed law.

On the following year, HUDCC will assume the authority to extend this limit on rental increases per year and determine the residential units covered by such limit.


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