Price caps for mass housing unrealistic, developers say
The country’s mass housing developers have appealed to the government to rethink “unrealistic” price ceilings and benchmarks currently used for socialized and economic housing, warning that these would only hamper their capacity to help address the housing backlog that is “nearing crisis proportions.”
The Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP) and the Socialized Housing Alliance Roundtable Endeavor (SHARE)—the two leading mass housing organizations in the country—said in a joint press statement on Friday that the recent increase in price ceiling for socialized housing had been eroded by corresponding adjustments in housing standards.
Even as government agencies Housing and Urban Development Coordinating Council (HUDCC) and Housing and Land Use Regulatory Board transition into the newly created Department of Human Settlements and Urban Development, mass housing developers urged the immediate review of these ceilings and standards.
From the previous ceiling of P450,000 that was set in 2013, the joint National Economic and Development Authority-HUDCC resolution recently increased the limit as follows:
– P480,000 for a 22-square meter unit with loft of at least 50 percent of the base structure or 24 sqm;
– P530,000 for a 24-sqm unit with loft of at least 50 percent of the base structure or 28 sqm and;
– P580,000 for a 28-sqm unit with loft of at least 50 percent of the base structure or 32 sqm.
OSHDP president Jefferson Bongat said the price adjustments and the accompanying increase in design standards for socialized housing projects were still “not viable and unrealistic.”
“The new increases in the floor areas of different socialized housing tiers, as well as the consequent increase in lot areas, require additional increases of six, 10 and 14 sqm, respectively. The loft requirement of 50 percent of the base structure has further eroded whatever adjustment [made] in the price ceiling. It will be difficult for developers to produce socialized housing under these requirements, especially in urban and highly urbanizing areas as these will entail additional construction costs,” he said.
“The housing backlog of six million units will continue to spiral, greatly affecting the supply and access for decent and affordable housing specially for the lower income groups of the population,” Bongat stressed.
SHARE president Marcelino Mendoza—representing the nongovernmental organizations involved in socialized housing production—noted that labor cost had increased by 4.9 percent in Metro Manila to P573 daily, which was exacerbated by the increased competition for both skilled and nonskilled labor arising from the infrastructure-building program of the government.
“Likewise, the current prices of raw land have increased by over 15 percent as compared with the previous year level. Further, the construction materials price index has continued to spiral and was registered at 258.6 for the period June 2019, up by 2.45 percent from the 252.4 from the same period in 2018,” Mendoza said.
Mendoza called for an in-depth study on the determination of workable price ceilings and standards that would take into consideration the costs of all the inputs and factors in the production of housing.
“The current adjustments in design standards will jack up production cost for socialized housing by P12,000 per sqm or some P72,000 to P168,000 (per unit), based on the government’s recommended floor areas under HUDCC Resolution No. 1, Series of 2018. This will impact on the participation of socialized housing producers in the government’s efforts to address the needs of the lower segment of the population,” he said.
In 2018, socialized housing production in the country declined by 27.9 percent, the fastest pace of contraction seen in 18 years. Licenses to sell in this space dropped to 197,850 units for some 569 housing projects in 2018 from 274,545 units for 742 housing projects in 2017.
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