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Property developers urge Congress to close housing policy gaps

August 6, 2014 9:38 pm [ ]

REAL estate developers on Wednesday urged Congress to address the policy gaps that hinder their production of socialized housing units.

In a press conference, Attorney Christopher Ryan Tan, president of the Organization of Socialized Housing Developers of the Philippines (OSHDP) said “there is a need” to amend some government policies that prevent them from taking part in addressing mass housing backlogs.

Tan said they have already submitted a position paper to the House Committee on Housing and Urban Development.

The organization’s move, he added, is in response to House Bills 89, 1484 and 2576 which seek to amend the socialized housing provisions of Republic Act (RA) 7279 also known as the Urban Development and Housing Act of 1992.

He said that these provisions create policy gaps which have resulted in low production of socialized housing stock.

Tan mainly attributed the low production to the lack of real incentives for the private sector to participate in the government’s mass housing projects.

The government has estimated the housing backlog at between 3.6 to 3.9 million but the private sector only produces 100,000 to 150,000 housing units a year, he explained.

“There is a slow capacity of the private sector, we really need the support of the government,” Tan told reporters.

He explained that profit margins for socialized housing projects are low compared to the administrative and operational costs, which are even higher than those for low-cost and middle-income housing developments.

In the case of production incentives stipulated under the existing section 20 of R.A. 7279, Tan said these are difficult for developers to obtain because of restrictions in their grant and availment.

On the buyers’ end, Tan said there is a widening gap between the cost of minimum-standard housing and households’ financial capacity to afford it.

A solution to the problem would require the provision of direct government subsidies to enable the homeless and underprivileged to acquire housing.

To address the problem, OSHDP proposed that Congress should amend R.A. 7279’s definition of “socialized housing” by including low-rise to medium-rise buildings or “socialized housing condominiums.”

He said “socialized housing condominiums” should be covered by their own set of price ceilings, separate from those presently covering units in low-density, horizontal subdivision projects, in which the ceiling is currently pegged at P450,000 per unit.

The OSHDP has proposed that government housing regulators adopt a second tier of price ceilings for socialized housing condominiums. If located in Metro Manila, Metro Cebu and Metro Davao, the group suggests the price be pegged at P840,000 per unit, with a price ceiling of P750,000 for units located in other highly-urbanized cities.

The OSHDP is the leading private sector organization and advocate for the causes of economic and socialized housing in the country.

The group, with 75 members, seeks to promote the interest and welfare of socialized and economic housing developers through the coordination with all sectors and stakeholders.

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