After Price Cap Hike in Economic Housing, Industry Appeals for Adjustment on Socialized Units

After the increase in price ceiling for economic housing, the Subdivision and Housing Developers Association (SHDA) hopes that there will be a hike in the price cap of socialized housing, Malaya reported. Currently, the ceiling is at P450,000. 

The group has long been appealing for an increase, saying that it’s important given the rise in the costs of inputs, and the income and affordability of the population, particularly those that are in the lower 30 percent of the strata.

Solution to the Housing Backlog Problem

According to SHDA, the current price ceiling makes the production of socialized housing unprofitable, discouraging developers. According to SHDA, an increase will motivate companies to re-engage in the construction of affordable units, and in the process, help alleviate the growing housing backlog problem in the country.

The number of units needed is expected to increase to 6.5 million by 2030. If left unaddressed, it will balloon to 22 million by 2040. The real estate industry must produce beyond the approximate 250,000 houses a year to solve the housing shortage problem.

In the first four months of the year, shelter financing agency Pag-IBIG loaned about P2.35 billion to finance 5,411 homes for minimum-wage and low-income members. 

This is part of the agency’s Affordable Housing Program, which serves members who earn up to P15,000 a month in the National Capital Region, and up to P12,000 a month outside the capital. The socialized home loans have a subsidized rate of 3% per annum for home loans or up to P580,000 for subdivision projects, and up to P750,000 for condominium developments.

In June, the Department of Human Settlements and Urban Development (DHSUD) introduced a new price ceiling for economic housing, hiking it from P1.7 million to P2.5 million, the Daily Tribune reported. 

The hike was approved by then secretary Eduardo del Rosario, which was lauded by different real estate groups. Prior to the adjustment, the price cap on houses with a minimum floor area of 22 square meters is P1.7 million.

Priority in Government Policy

Back in May, then-President Duterte approved the 2022 strategic investment plan (Memorandum Order No. 61 series of 2022), a directive outlining the activities qualified for tax incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. The plan’s Tier I includes all the activities listed in the 2020 Investment Priorities Plan, which covered the development of mass housing units based on a price ceiling of P2 million. In-city, low-cost dwellings for lease or rent are included.

Housing-related industries are also eligible for incentives, which include “innovation drivers,” such as smart cities and coworking spaces, as well as “innovation support facilities,” namely science and technology parks and tech startups. Similarly, eco-friendly homes are qualified.

SHDA expressed delight in having mass housing in the 2022 strategic investment plan. However, as reported by Malaya, the group appeals for a clear set of criteria for green housing, smart cities, and smart communities. 

As part of solving the housing backlog, the new government’s campaign promise was the acceleration of the housing loan application process. They hope to revive Pag-IBIG’s old program 7-Day Takeout Policy, which cuts down loan application processing time from 20 working days to a week. 

Similarly, they were planning to bring back the Bagong Lipunan Improvement of Sites and Services (BLISS) project, a public housing initiative that offers residential units to low-income families.

Discussion on Affordable Housing

The state of the affordable housing market will be one of the key topics to be discussed in the highly anticipated in-person real estate event on August 31, 2022. Organized by real estate platform Lamudi, The Outlook 2022: Philippine Real Estate Conference will feature a panel track that will talk about the initiatives industry players are doing to provide safe and decent housing for an affordable price. Distinguished personalities from different real estate companies and related industries will lead the discussion.

Lamudi will likewise honor top affordable developments in the country in The Outlook 2022: Philippine Real Estate Awards. Affordable houses and condos in Luzon and Visayas-Mindanao regions will be recognized. An independent panel of judges will review and shortlist nominations based on a predefined category-specific score sheet. The shortlisted entries will then be surveyed among thousands of Lamudi property seekers. On September 27, 2022, the winners will be announced on a gala night attended by different real estate professionals.

To know more about the conference and awards event, visit this page.

Sources: Malaya, Daily Tribune, Official Gazette, BOI

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Makati Strengthens Climate Action Commitment with Climate Emergency Declaration

Makati City has declared a state of climate emergency and appealed to businesses, communities, and stakeholders to join in the movement to combat climate...