Rental rate hike for poor households capped at 4%

MANILA, Philippines — The National Human Settlements Board (NHSB) has approved a four percent cap on increases in rental rates of P10,000 and below, effective Jan. 1 until the end of the year.

In a statement yesterday, the Department of Human Settlements and Urban Development (DHSUD) said the cap – contained in NHSB Resolution No. 2023-03 finalized on Oct. 13 and published on Dec. 16 – was meant to “avoid unwarranted increase in rental rates among lower income families.”

The previous cap was 11 percent.

Based on the resolution, the implementation of rental regulation under the previous Resolution No. 2022-01 shall continue except for the modification on the rate increase.

The DHSUD said the decision was based on the recommendation of the National Economic and Development Authority “to set a uniform maximum percentage increase at the upper bound of the inflation rate target of the current administration.”

DHSUD Undersecretary Henry Yap said the policy was based on latest empirical studies, such as the Annual Family Income and Expenditure Survey and Census of Population and Housing.

“These data guided the decision-making process of the multi-agency NHSB to come up with the most sound, feasible and fair figure to represent the cap in rental increase,” Yap said.

Republic Act 9653 or the Rent Control Act of 2009 makes it a state policy to encourage the development of affordable housing to protect tenants in the lower-income brackets and other beneficiaries from unreasonable rent increases.

The same law authorized the then Housing and Urban Development Coordinating Council (HUDCC) to regulate rental rates of certain residential units, among other related functions.

When RA 11201 or the law creating DHSUD was enacted in 2019, NHSB assumed the responsibility as the single policymaking body tasked to provide overall directions and program development to attached shelter agencies of DSHUD.

Fines ranging from P25,000 to P50,000 or imprisonment of not less than one month and one day to not more than six months, or both, shall be imposed on anyone found guilty of violating any provision of RA 11201.