Mass housing supply is tragic.
Thus was the bold claim made by the Subdivision and Housing Developers Association Inc. (SHDA), which has long been at the forefront of championing shelter for every Filipino.
Regardless of the incessant clamor made by many quarters over the past several years, problems concerning inadequate socialized housing remained just as pervasive, with the backlog continuing to swell to a massive 6.5 million units as of last count in 2015.
INQUIRER PHOTO/ John Paul R. Autor
The country’s growing population, the rising costs of construction and cumbersome regulatory policies offer no respite to this persistent problem that have had such far reaching adverse implications on the economy and the quality of lives of Filipinos.
And, amid efforts from both the government and private sector, it seems that there is no immediate relief in sight. Proof in point would be last year’s “housing numbers.”
Steady decline
If the indicator of future housing supply were to be based on the number of licenses to sell issued, the numbers are indeed worrisome—amid the supposed improvement in terms of affordability.
SHDA president Raphael Felix said the total number of licenses to sell issued by the Housing and Land Use Regulatory Board (HLURB) fell by 26 percent to 204,344 units in 2018 from the 274,545 units recorded the previous year. Last year’s figure was the lowest since 2011.
What’s more alarming, Felix pointed out, was that the number of licenses issued for socialized housing—both for compliance and stand alone projects—plummeted by 50 percent last year from the already measly 36,000 units in 2017.
Even the national government’s allocation for housing also took a sharp dive starting in 2017 when the budget stood at only P897 million. Government budget for housing steadily declined to P717 million in 2018, and P648 million this year—even much lower than the allocations made since the start of this millennium, data provided by SHDA showed.
The implications of these data are far more significant than what is apparent.
What these declines and budget cuts only show is that efforts to resolve the housing backlog has been set back.
Under the SHDA Roadmap submitted in 2012, the goal was to build a total of 10 million houses by 2030—1 million from 2012 to 2016; 2 million from 2017 to 2022; and 7 million homes from 2023 to 2030, Felix explained. Up until 2016 when the licenses issued were for 1.35 million houses, SHDA saw the targets being surpassed.
The succeeding years, however, had a different story, according to Felix, who disclosed that the number of licenses issued in 2017 and 2018 reached only 478,000 units.
And if 2019 is assumed to see the same lackluster performance from the housing industry, then the 2-million-home target will not be achieved by 2022.
Constraints
Felix cited several constraints that have hampered the growth of the housing sector.
The more recent of these, to which he attributed the decline in the number of licenses issued over the last two years, would be the difficult, restricting regulatory process imposed by the HLURB.
CDN PHOTO/JUNJIE MENDOZA
He noted in particular Board Resolution 965 issued in 2017 and Memorandum Circular No 9 Series of 2018—both of which had set the manner for compliance for socialized housing for developers of subdivisions (15 percent of total area or total project cost) and residential condominium (5 percent of total area or total project cost).
Felix also cited the government’s move to increase the socialized housing ceiling price by a small amount, at about P30,000, and at the same time, expanding the floor area by about 6 sqm—making it all the more financially difficult for any property developer to pursue such projects.
Other issues, according to SHDA FVP Rosie Tsai, include the possible removal or lowering of tax incentives for socialized and economic housing and, sometime in the near future, for all mass housing; surge in zonal values of land, adversely affecting affordability of raw land; increase in construction materials and labor costs; constant threats of new regulation on land use conversion; and imminent removal of value added tax exemption effective January 2021.
“Yes, the primary causes right now of the growing backlog are the regulations and permitting process as well as the conflicting codes—all these delay the process to building a home. We have learned to live with some of the hardships but the difficult situation was worsened by some new regulations. Add to that the rising costs of construction. Issues are plentiful but you can pinpoint a handful of key issues—the other issues, we’ve learned to live with,” Felix said. “Still, we remain hopeful that things will get resolved,” he added.
Economic stimulus
There is indeed a lot riding on the bullishness being held by SHDA about the future of housing. What some may fail to realize is the fact that housing can become a significant economic stimulus precisely because of its multiplier effect, estimated to be 16.6, and its significant role in addressing the needs of and shaping the general society.
Tsai pointed out that across the major economies in the world, housing starts is one of the major indicators of economic stability and growth.
“Higher confidence in consumer spending in affordable housing contributes to higher GDP. The effect of housing on families go beyond a roof over their heads. Decent shelter is one of the basic needs for life, with enduring effects on the financial, social and moral stability among family members,” Tsai said.
“If family stability and security erode, the ill-effects on society and to the government cannot be more emphasized. The multiplier effect of the housing industry extends to other industries and businesses, creating more jobs, thereby increasing household consumption, a major component of GDP,” she further said.
“We talk about the upward and downward linkages home production does for our economy. We talk about the multiple effects that contribute positively to businesses across industries. We even talk about how home building can be the quickest and maybe the biggest, contributor to our GDP. It also raises government revenues through taxes. Yet the housing industry seems to get little attention,” Felix added.
SHDA Chairman Jeffrey Ng, in fact, stressed that housing needs should be considered as important as the government’s ambitious P8-trillion Build, Build, Build initiative.
“Housing will be the quickest contributor to your GDP growth. Yes, we need the Build, Build, Build program because infrastructure projects serve housing in that these open new frontiers for expansion, lessen concentration in key areas, lessen congestion in the cities, and these will help ease property prices,” Ng said.
“But infrastructure projects take long before they are completed whereas housing is more immediate. For the infrastructure initiative to work, it has to coincide with the government’s agenda to boost housing production. What’s P100 billion for housing compared to the amount being allocated for infrastructure? P650 million can only put up 1,300 socialized housing units,” Ng explained.
“Mass housing is a cause worth fighting for, that is why SHDA champions shelter for every Filipino,” he concluded.
ADVT.