By Marjune N. Muzones
A joint declaration was recently inked by the Department of Human Settlements and Urban Development (DHSUD) and the National Economic and Development Authority (NEDA) to adjust the price cap of economic housing in the country from P1.7 million to P2.5 million.
DHSUD implemented the Department Order 2022-03 last June 10, 2022, which states that the adjustments will apply to new projects yet to be launched. For projects already having licenses to sell, the new price cap will apply to unsold and unconstructed housing units only.
The move is welcomed by the private sector, pointing out that the new price ceiling adjustments align with the increases in cost for inputs to production, as well as inflations caused by economic and political uncertainties worldwide.
According to Mr. George Siy, Chairman of the Subdivision and Housing Developers Association (SHDA), the largest housing organization in the Philippines, this as an opportunity to pump-up the economy, and the improvements will harbor positive effects for economic housing as it considered the income and affordability of home buyers, and costs of input to production as more homes are being developed.
“Like all the other sectors, the housing industry is likewise affected by the increases in prices of all inputs to production but due to price controls, much of production in socialized level has been unprofitable and production has been discouraged. This is why the price ceiling adjustment, due some years ago, is needed to encourage housing production for our countrymen,” Tiy said.
SHDA projects that the housing backlog of the Philippines could reach 6.5 million by 2030 and would go as high as 22 million by 2040 if neglected. The industry needs to increase production to bridge the gap. The economic incentives and the new price ceiling are expected to attract more developers to build more economic and socialized housing units, address the backlog, and stimulate the economy.
“The demand for housing will always be there. Factors for demand are not just cost – income levels, economic activity, optimism, community planning, interest rates, and other factors come into play… Funding facilities for buyers and development from both the government and private financial institutions are very helpful, available, and accessible. The interest and the participation of the private sector is evident. Moreover, the housing demand is increasing. Again, housing is both a social and economic instrument that the government can utilize for recovery, growth, and development,” Tiy stated.
In terms of socialized housing, talks are already underway to determine new adjustments in its price ceiling.
“SHDA, together with other housing organizations, has been meeting and working with the government, DHSUD and NEDA in the determination of the adjustments in the price ceiling for socialized housing, after the adjustments were made on economic housing. This takes into consideration increases in the last 4 years in costs of inputs, as well as income and affordability of the population, especially those that belong to the lower 30 percent of the strata”, he added.
The SHDA Chairman also pointed out that aside from the price ceiling adjustment, the government also helps developers address crucial issues such as the increasing cost of materials and lessening red tape in transactions.
“The government plays a very important role. Through its instrumentalities, the government can extend direct and indirect interventions through, e.g., facilitating access to land of government, and idle lands; simplification of rules and regulations in permitting and licensing process for housing; tax relief at the affordable end; and monitoring the facilitation of distribution and supply… Red tape and time frames have been reduced with the help of both the Department of Human Settlements and Urban Development (DHSUD) and the Anti Red Tape Authority (ARTA), with consultations with housing organizations like the Subdivision and Housing Developers Association (SHDA),” Tiy said.
Public-Private collaboration in the housing sector at present covers quality regulation, price and production monitoring, resolution processes, and added communications avenues.
“The participation of the private sector, the stakeholders, the local government units, the other government agencies relating to housing and settlements and the communities themselves have created synergy. We participate, initiate, mobilize, and pursue relentless activities all with the objective of facilitating housing activities to deliver innovative, responsive, resilient, sustainable, green, affordable, and decent housing for all our countrymen”, he added.
Displaying a brighter outlook compared to other sectors, housing plans, programs, and policies are already in place and continually improved by the DHSUD, in collaboration with private stakeholders.