House price ceilings under review
THE House Committee on Housing and Urban Development is currently reviewing existing government issuances related to housing price ceilings to enhance private sector involvement in mass socialized housing projects.
House Committee on Housing and Urban Development Chairman Francisco B. Benitez emphasized the necessity of bolstering private sector engagement in housing production, particularly amidst a perceived decline.
Benitez highlighted the government’s ambitious goal of constructing six million housing units by 2028.
The committee examined last Wednesday various government directives, including Joint Memorandum Circular (JMC) 3 of 2023, which adjusts price ceilings for socialized subdivision and condominium projects. The committee also reviewed orders issued by the Department of Human Settlements and Urban Development (DHSUD) that are related to economic-housing price ceilings and incentivized compliance with balanced housing programs.
“We must further strengthen the participation of the private sector in housing production, which seems regrettably to be declining even as we speak,” Benitez said.
DSHUD Undersecretary Avelino D. Tolentino III informed the panel of the investments by the private sector.
“There have been private entities that have invested well within the financial framework” that is set by JMC 3, Tolentino said.
The lawyer pointed out the increase in the prices of units in condominiums: a 32-square-meter (sqm) unit or 28-sqm loft that was priced at P580,000 under HUDCC Resolution 1 (series of 2018) is currently priced at P850,000.
Tolentino cited present economic conditions as the reason for the increase in prices.
He noted that Section 23 of Republic Act 11201 (DHSUD Act) has authorized the DHSUD and the National Economic Development Authority (Neda) were authorized to jointly issue price ceilings for housing units every two years.
“The shift (in prices) is in line with the issuances of the current administration declaring the ‘Pambansang Pabahay para sa Pilipino Housing’ (4PH) as a flagship program of the government and then bringing in private sector and private financing into the mix,” Tolentino added.
“We are hoping that with these amounts set, we will be able to attract private developers and contractors to invest their financial and technical expertise in projects and then later on be paid via take-out by government financial institutions, primarily the PAG-IBIG fund, which has at this point already set aside P250 billion in allocations for the expected take-outs,” the DHSUD official told members of the panel.
Representatives from the NEDA, the National Housing Authority, the Home Development Mutual Fund, the Social Housing Finance Corp., the National Home Mortgage Finance Corp., the National Real Estate Association Inc., the Subdivision and Housing Developers Association, the Chamber of Real Estate and Builders Associations Inc. and the Organization of Socialized and Economic Housing Developers of the Philippines also attended the committee meeting.