Affordable houses to help solve social, economic ills
After handing over close to 16,000 housing units since setting up PA Properties almost 23 years ago, company president and CEO Romarico Alvarez is convinced that if the country were to get rid of social and economic ills, there is one thing that will make a huge difference: building more houses.
And it’s not just any type of house.
“We must make sure that the houses built are both of the right quality and would meet the financial capacity of ‘first-time buyers’ as well as ‘last-time buyers,’” he explained.
For Alvarez, houses falling under socialized (priced no more than P400,000) and economic category (valued at around P1 million) have the right attributes that majority of Filipino families seek: one big reason why the bulk of the communities his company built serve these two categories.
He related that among the projects that best describe the efforts of PA Properties include St. Joseph Homes Calamba in Laguna; NuVista Lipa in Batangas; NuVista San Jose in Bulacan; and St. Joseph Ridgeview in Dasmariñas, Cavite, just to mention a few. All these projects have economic units whose prices don’t exceed P1.25 million.
The country’s largest association of private developers, the Subdivision and Housing Developers Association, agreed saying that more houses should be built under these two categories. The housing shortage is said to be more prominent in the socialized and economic housing segments, which comprise about two-thirds of the current 4-million-unit backlog.
Make an impact
“If we want to make an impact—solve this backlog—we must focus on these two categories. This is one effective way of making an impact to people’s lives and reward hard-working Filipinos,” said Alvarez, adding that the government has done some positive steps in the past years to entice developers.
Under Republic Act No. 10884 or the Balanced Housing Program Amendment Act that lapsed into law in July this year, housing developers are mandated to contribute to the production of socialized housing stock by providing 15 percent of their horizontal or vertical housing development projects to socialized housing.
Condominium developers are also now mandated to develop an area for socialized housing equivalent to at least 5 percent of the total condominium area or total project cost.
“The law not only encourages us to develop new communities but also prompts us to also put up medium-rise socialized condominiums in urban areas nationwide that may help in lessening daily suburban commute and traffic congestion, while enabling us developers to optimize land use, manpower productivity, and business efficiency,” Alvarez said.
In order to encourage more developers to construct more houses in the economic segment, the Housing and Urban Development Coordinating Council (HUDCC) raised last year the ceiling for economic housing loans to P1.7 million, from the previous P1.25 million.
The move was meant to increase home ownership, convince families that there is another option than renting, and that families may now have a choice to successfully get out of the slums (depressed communities).
For Januario Jesus “JJ” Atencio, president and CEO of 8990 Holdings, his 14-year-old company went beyond building houses and communities that maximize value for money.
He explained that his company, regarded as the country’s leading mass housing developer, is among the very few if not the only developer in the Philippines that required buyers to undergo a half-day financial literacy seminar in order to provide their new home owners with the right information and guidance.
Atencio explained these families have a modest income but have the strong desire to become independent, more self-sufficient, and stronger as a family.
“They see that owning something, like a house, and putting some sweat into it, gave them the opportunity to control their future in the way that they want to,” he said.
This year, 8990 Holdings will be launching 14 more projects, thus bringing to the market additional 75,608 housing units worth P7.29 billion. These include the 14-hectare Deca Homes-Marilao in Bulacan (where studio-type units are priced at P1.2 million; two-bedroom units at P1.7 million; while townhouse units are priced from P1.4 to P1.5 million); and 45-storey Urban Deca Tower-Cubao near Cubao station of the MRT (where prices start at about P1.2 million to P1.5 million per unit).
Moreover, 8990 Holdings continues to beef up its current inventory of 553 hectares by purchasing 76.24 hectares more in Manila and Iloilo.
New, formidable player
Even the country’s biggest developers realized the value of being active in the socialized housing segment.
In 2011, Ayala Land, more known for its luxury and premier residential communities, formalized its foray into socialized housing by announcing the creation of BellaVita Land Corp. (then known as South Maya Ventures Corp.), a new subsidiary that undertook its first project in General Trias in Cavite.
As Ayala Land’s fifth residential brand, the outfit embarked on developing the country’s first social enterprise community with units worth between P400,000 and P650,000 and whose monthly amortization can be as low as P2,500 through Pag-Ibig financing. The project targets minimum wage earners and members of the informal business sector.
The move was such a huge success that BellaVita now has presence in Porac and Cabanatuan in Pampanga; Tayabas in Quezon; Capas in Tarlac; San Pablo in Laguna; Lipa in Batangas; Pilillia in Rizal; and Alaminos in Pangasinan, to mention a few.
Also in 2011, Ayala Land ramped up the construction of economic housing units under its Amaia brand.
The first Amaia project was located on a 20-hectare property in Calamba, Laguna and had house-and-lot units sold for P600,000 to P1.25 million each. The target are families earning up to P50,000 a month.
Interestingly, a number of these projects will integrate Ayala Malls, specifically the PrimaVera Market Mall, where resident entrepreneurs can start and grow their own businesses.
Another property giant doing successfully in the affordable market segment is Megaworld Corp. (owned by tycoon Andrew Tan) and its wholly-owned subsidiary Suntrust Properties.
Since its inception in 1997, Suntrust Properties has created numerous self-sustaining residential communities in Dasmariñas, Gen. Trias, and Silang in Cavite. The company also has condominium development projects located all over Metro Manila.
According to Atty. Harrison Paltongan, president of Suntrust Properties, the low interest rates that spur home loans, rising incomes of the middle class, the high demand amid a backlog, and the growth of the outsourcing industry are encouraging more low- to middle-families and individuals to finally acquire their own homes.
Among the company’s popular projects include the Cyberville in Dasmariñas, Cavite (where prices start at P985,000); and Sta. Rosa Hills in Silang, Cavite (where prices start at P1 million).
Recognizing that affordable housing segment is the real sweet spot in the country’s property sector, even tycoon George Ty-led conglomerate GT Capital Holdings Inc. has struck a deal to buy into affordable housing developer Property Company of Friends Inc. (PCFI), the key operating unit of the Pro-Friends Group.
PCFI, best known for its low-cost horizontal and mixed-use townships in key areas near Metro Manila, believes that more developers should address the huge backlog in the low income segments or the so-called C, D, and E markets. While this market is growing robustly, it remained underserved.
Best examples of the company’s developments include the 15-hectare Cedar Residences in Carmona, Cavite (with typical selling prices ranging from P550,000 to P770,000; the 61-hectare Monticello Villas in Pavia, Iloilo (where prices range from P800,000 to P1.1 million); and the 1,400 hectare Lancaster New City in the boundaries of Imus, Kawit, and Gen Trias in Cavite (prices start at P870,000).
Perhaps the latest big player to expand into the socialized and affordable housing segment is Rockwell Land Corp., which bought last year, a 5.9-hectare property in Sto. Tomas, Batangas.
Rockwell Land, the real estate unit of the Lopez group, is best known for creating high-end communities that seamlessly blend residences, work spaces and lifestyle hubs.
The venture, now led by Rockwell Land’s wholly owned subsidiary Stonewell Development Corp., offers modern-designed row house and duplex units. It is near the famous Padre Pio Church within the Sto. Tomas town proper, close to several industrial parks, and more importantly, just 400 meters away from the Pan-Philippine Highway.
Late last year, the 44-year-old property developer Sta. Lucia Land Inc. (SLI) successfully raised P4 billion worth of unsecured fixed-rate peso bonds.
This major milestone in the group’s over four decades of history puts it in a better position to achieve a more aggressive yet sustainable growth over the years, according to David dela Cruz, SLI EVP and chief financial officer.
He said part of the proceeds was immediately used to secure strategic locations (land banking) and to actively seek new joint venture partners.
Dela Cruz noted that as the country’s population moves both from the old central business districts to more suburban locations and from larger suburban homes to “down-sized units,” there becomes a new demand for residential developments that incorporate retail, restaurant and entertainment venues.
Dela Cruz said: “This is why SLI is continuously going into key cities nationwide like Dagupan City, Calabarzon area, Iloilo (like the 8.6 hectare Acropolis Iloilo); Cebu (the 14.5 hectare Crown Heights) Palawan; General Santos City; and Davao (the 14-hectare Alta Monte) to lay the foundations for future mixed-use developments.”
He added that thanks to technological interventions, innovative building materials, fast construction methodologies, and quality products, developers like SLI are able to fulfill the need for affordable housing in the Philippines.
In a way, Dela Cruz said SLI is among the developers helping to prevent the proliferation of slum communities.
“Families now have the option to finally have a home that is within their financial capacity to pay and live in community that is more progressive, secure and well-provided with basic amenities (good roads, clean water and electricity),” he said.
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