Realty sector worried about proposed land use act

The proposed National Land Use Act (Senate Bill 3091) that President Aquino has recently certified as urgent, seeks to institute a national land use policy, provide implementing mechanisms, rationalize the utilization, management and development of the country’s land resources and ensure their optimum use consistent with the principle of sustainable development.

In other words, this proposed bill (together with its counterpart, House Bill 6545 or the National Land Use and Management Act) seeks, among others, to prohibit illegal land conversion into commercial areas.

However, a number of developers are worried about its implications, particularly in the group’s objective to solve the housing backlog, which now stands at 3.5 million units.

Negatively impact?

The Advocates for Responsible and Equitable Land Use Planning, which is composed of the Chamber of Real Estate and Builders’ Associations Inc. (Creba), National Real Estate Association Inc. (NREA), Organization of Socialized Housing Developers of the Philippines Inc. (OSHDP), and the Subdivision and Housing Developers Association Inc. (SHDA) said the passage of the bill could negatively impact the real estate and housing industry and other critical areas of economic growth and development.

Their concerns include:

• LGU powers over the proper planning and management of its land use conferred upon it by the Local Government Code have been significantly diluted or virtually abrogated.

• “Agricultural” lands are defined as “Protected Areas” (Section 4fff), placed under the DAR’s jurisdiction and protected from conversion, practically leaving nothing of the land pie to be allocated to settlements, infrastructure, tourism, real estate development and other nonagricultural development.

• Agricultural lands are banned from conversion while they are in the hands of landowners, but may be converted once they are awarded to agrarian beneficiaries (Section 13).

The group urged that while it recognizes the need to ensure food security, any land use policy that will be passed must clearly, fairly and equitably recognize the multiple legitimate use of land.

12.5 million by 2030

SHDA president Paul Tanchi said that if nothing is done about the backlog, it could balloon to 10 million in 2020 to 12.5 million by 2030.

The national organization of private subdivision and housing developers said that to meet the backlog, some 200,000 to 250,000 houses should be built every year. However, with the proposed provision such as banning the conversion of agricultural lands and defines them as “protected areas under the exclusive jurisdiction of the Department of Agrarian Reform, such target would never be reached.

Tanchi added that the passage of the bill into law would somehow limit developers’ options on which land to convert into residential communities.

Study

A study commissioned by the developers in 2012 showed that from 2001 to 2011, the demand for socialized housing was 1.14 million, but the property sector was only able to supply 479,765 units.

Demand for economic housing was even higher at 2.5 million, but the supply was only 541,913 units during the same period.

The developers said there was also a backlog in low-cost housing, with demand of 704,406, and available supply of only 242,246 units.

On the other hand, medium-cost and high-end housing posted unit surpluses of 250,403 and 224,011 units, respectively.

They said figures did not include the 832,046 households who could not afford to build their own homes.

Creba, an umbrella organization of firms, individuals and associations directly or indirectly involved in land and housing, construction, allied industries and various professional fields of discipline, stated that to serve the estimated 6.54 million additional demand for 2012 to 2030, the country would need need to put up 345,941 housing units per year.

“What we are saying is that allow us to be heard. Let our suggestions and amendments be included in the proposed bill. If we have this bill that addresses one side of society only then we might be creating more problems than solving them,” said Creba president Charlie Gorayeb who added that allied sectors in the construction, electrical, hardware suppliers and others would also be affected by the impending slowdown of the property sector once the proposed bill gets approved without the real estate sector’s input.