Can we ever fill this backlog?

I still think that many of our problems as a nation can be solved if the marginalized population can be provided with decent, adequate housing. This impoverished lot who squat on river banks and sleep under bridges can have a semblance of a unified family and can enjoy the dignity of living like a human being if provided with a decent roof over their heads and the daily challenges are limited to providing for a hot meal and perhaps public education for the children.

Alas, after years of coping with this national problem, and after enacting a supposedly comprehensive housing law, we are still far from reaching a viable solution.  With a housing backlog of 5.5 million, this remains a most serious problem indeed, and CREBA (Chamber of Real Estate and Builders’ Associations Inc.) president Mr. Noel Carino who guested in a recent episode of the TV show Business &Leisure, said that there has been no dent in this figure, despite all government efforts.

The country’s realtors and builders are now bent on confronting the issue with a few proposed amendments to the existing housing law. The old law provided for a twenty per cent allocation for socialized housing for all developers with the hope of providing affordable homes for the marginalized, which should ultimately work towards national development. With the existing housing law, all developers are required to allocate 20 percent of their project cost to socialize housing, and this goes for all developments and new projects.

Admittedly, this is a complex situation, and our realtors are in a quandary as to the modes of compliance acceptable to both sides. According to the CREBA president, the housing law has not addressed the backlog precisely because of this – the modes of compliance are not specific to the construction of houses. The spirit of the law, he says, is for the developerto actually produce socialized housing.  In the past, the government allowed the purchase of bonds issued by the NHA (National Housing Authority) as a mode of compliance and some unscrupulous developers have squeezed this dry for their purpose.  Imagine that for purchasing bonds worth a measlyP5,000, these developers can claim compliance to what is required of them. That actually translates to P5,000 per house, and the developer is off the hook.

Clearly, the idea of using NHA bonds does not fly.   I do not know exactly how much the NHA raised from the sale of these bonds in recent years, but for its worth as compliance valued at P5,000/house, it cannot amount to much. Mr. Carino, and before him long-time CREBA President Mr.Charlie Gorayeb who was passionate about the need to address the national housing backlog through socialized housing, emphasized that the bottom line in all these is to really and actually count the houses that are built to conform to the law.

The ceiling for socialized housing as it stands now is P450,000 with a minimum of twenty four (24) sq. meters. This is simply unreasonable and unrealistic, CREBA says, and they are proposing to raise the value to P840,000 to P850,000. With land values now and given the cost of construction which doesn’t stand still, P450,000 does seem too low.

Another loophole came into light.  The existing housing law focused on the subdivision developers but clearly overlooked the condominium builders. While the subdivision developers have been grappling with the provisions of the housing law and seeking ways to skirt them, the condo developers have been spared of the responsibility to share in the problem. But a 20-percent allocation is clearly too much to ask of these condominium builders.  The cost of building a towering condo is much more than the cost of building a one- or two-story house, and these vertical developments are never low-cost. Their capitalization and project costs are much higher than for subdivision developers, and CREBA recognizes and acknowledges this fact.

With their proposed amendments, CREBA is also of the opinion that the existing provision for a 20-percent allocationf or subdivision developers is also excessive and can be brought to more realistic levels. The realtors are proposing to amend this to 15 percent for subdivision developers and to provide a five-percent allocation to condominium builders.  As it stands right now, the condo builders have zero allocation.

One major amendment that the realtors and builders seek is the ruling from the BIR (Bureau of Internal Revenue), which, as the law stands now, provides for a BIR ruling specific to the project from the BIR national office. “This takes infinitely long,” Mr. Carino says, and the protracted delay costs the developers huge amounts of money lost to bureaucracy. They propose to have the HLURB (Housing and Land Regulatory Board), which issues the development permits and license to sell anyway, to be allowed to certify as to BIR exemptions. This way, another layer of bureaucracy is eliminated.

Yet another mode of compliance that is being bruited about is to allow developers to build schools instead to be donated.  While there is a serious lack of schools in the country, especially in the far flung areas, the CREBA president feels that now is not the time to allow this mode of compliance, precisely because our housing backlog is just too high.  When we have sufficiently addressed this back log, when we have built enough houses, then we can entertain this new mode of compliance.

And when would that be? I don’t know if this is a realistic view, but the present leadership of CREBA thinks that the backlog can be addressed in 10 years. Most housing projects are situated in urban areas where land price is just too steep, so vertical development is the only viable solution, and this Mr. Gorayeb has been harping on for years.  Not high-rise developments, just medium-rise buildings that are not as costly to build and hence can be sold at more affordable prices to conform to the grand scheme of providing socialized housing across the nation. This can effectively address the problem of informal settlers.

And finally, their argument is still for the creation of a “Department of Housing”, which is the central office for all housing concerns.  Most other nations have this, so why not indeed create this all-too-important agency to address the country’s perennial housing problems?

Mabuhay!!! Be proud to be a Filipino.

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