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Socialized housing converted to cash

Posted on May 30, 2013 09:43:48 PM [ BusinessWorld Online ]
DAVAO CITY -- The city council has allowed two property developers to convert their socialized housing requirements to cash.
The council, led by Councilor Rachel P. Zozobrado, passed a resolution on Tuesday allowing Kisan Lu Lands and Development, Inc. and Robinsons Land Corp. to set aside P1.965 million and P625,000, respectively, equivalent to the supposed 20% share of socialized housing in their residential projects.
The proceeds, in turn, will go to the city government, funding its public housing program.
"Kisan Lu and Robinsons don’t have the land to give, so they will [provide the city instead with] the monetary equivalent," Ms. Zozobrado said.
Republic Act 7279 requires subdivision developers to allocate "an area for socialized housing equivalent to at least 20% of the total subdivision area or the total subdivision project cost at the option of the developer, within the same city or municipality."
Ms. Zozobrado admitted that many companies do not want to include socialized housing in their plans. They prefer to convert their requirements to cash, allowing them to comply with the provisions of the law.
Davao City has experienced a housing boom lately with big corporations putting up projects both in the city’s northern and southern sections. However, these projects are either expensive mid-rise condominiums or upscale subdivisions.
According to housing developers, upper and mid-level markets requirements are currently being addressed because the demand is high.
The government housing officals of Davao City declined to comment on the impact of the council action.
While the city government has amended the local incentives code to exclude property development as a priority area for investment, it still grants incentives to mass housing projects.
Jason C. Magnaye, acting chief of the Davao City Investment Promotion Center, said earlier that granting incentives to socialized housing developers would attract developers to help the city government address the housing backlog.
The shortage, estimated two years ago, is pegged at about 40,000. The city has an estimated 250,000 families.
Two years ago, Vice-President Jejomar C. Binay, chairman of the Housing and Urban Development Coordinating Council, said he was pushing for the creation of the Department of Housing, aimed at addressing the national housing backlog, estimated at about 3.6 million at that time. -- Carmelito Q. Francisco

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