House builders seek relief from gov’t
Socialized housing providers have asked the government to consider a new round of increase in the price ceiling for socialized housing to give developers an incentive to build homes for low-income families and help address the country’s backlog of six million housing units.
The Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP) and the Socialized Housing Alliance Roundtable Endeavour (SHARE) urged the Housing and Urban Development Coordinating Council (HUDCC) and the National Economic and Development Authority to raise the price ceiling for socialized housing to P533,333 from P480,000.
OSHDP and SHARE are the largest associations of socialized housing builders in the country.
In April last year, the HUDCC Council approved an increase in socialized housing ceiling to P480,000 from P450,000, but it also increased the minimum floor area requirement to 24 square meters from 18 sqm.
From the perspective of housing developers, the increase in the floor area requirement had only negated the modest price adjustments.
In a statement on Friday, OSHDP president Jefferson Bongat said the “unrealistic” price ceiling had dampened enthusiasm for new production. This has already been evident with the anticipated decline in the licenses to sell issued by the Housing and Land Use Regulatory Board.
“Such situation is untenable considering that the government budget [for housing agencies] has been slashed to only about P4.7 billion in 2018 from a high of P33.4 billion in 2016, and it is the private sector, which is expected to take the slack,” Bongat said.
Under these challenging conditions, he warned that the country’s housing backlog would continue to pile up.
SHARE president Marcelino Mendoza noted that the prices of raw land had increased by more than 15 percent, while the minimum wage has been jacked up to P573, or by 49 percent, in Metro Manila. Furthermore, he cited heightened competition for both skilled and unskilled labor arising from the government’s “Build, Build, Build” program for infrastructure alongside the usual higher wages demanded by Filipinos working abroad.
For the third quarter of 2018, the construction materials price index stood at 252.83, up by 18.86 points from the level a year ago.
Mendoza said that an increase in the price ceiling would enable more borrowers to avail themselves of the socialized 3-percent interest rate offered by the state-controlled Home Development Mutual Fund, or Pag-IBIG Fund. This is seen to greatly alleviate homebuyers’ cash position considering that inflation is at a much higher rate exceeding 5 percent at this time.
The petition for an increase in the price ceiling for socialized housing units with a footprint of 24 sqm was submitted to HUDCC chair Eduardo del Rosario in July last year by housing industry stakeholders but the latter urged the industry to try out the new price ceiling of P480,000 first.
The industry had dutifully obliged, Mendoza said. But six months after, OSHDP and SHARE consider the situation as “nearing crisis proportions,” prompting them to seek immediate relief.
