City lacks 'raw' land for socialized housing, say

UNDEVELOPED or raw land for socialized housing in Davao City has become scarce due to higher land value of those in residential areas.

Housing developers are obliged to allocate about 15 percent of their developed land area into a socialized housing, either in the vicinity of its development or in someplace else as long as the required land measure is followed. For a housing development to be considered socialized, it must cost only P450,000 at most. Houses that cost more than P450,000 are already considered economic housing.

According to Subdivision and Housing Developers (SHDA) board member Sol Lagmay, the current price for raw land area in the city is pegged at P500 to P1,000 per square meter and with this price, developers find it difficult to develop socialized housing worth P450,000.

“I think one of the bases that they have high cost of land is because of the coming of national investors. You can see we have Ayala, and of course from the start we had Camella Homes. In fact, we also have foreign developers who also want to invest in Davao City, who want to develop residential subdivisions. These affect our socialized housing program,” Lagmay said.

SHDA board member Cecille Ilagan said in order to be able to develop socialized housing the acquired raw land should cost about P200 per square meter but that nowadays is very rare or that none is sold at that price anymore.

Lagmay added their national board had lobbied to the Congress and the Senate last year to increase the cost of socialized housing from P450,000 to P750,000 wherein the developers are sure to break even. Currently, the proposal has yet to have final updates as the housing committees are still prioritizing other housing concerns including the Value Added Tax (VAT) proposed to be imposed to real estate developers.

When asked if she thinks the house buyers would still invest on a P750,000 socialized housing, Lagmay said she is positive that buyers will still do as long as PAG-

PAG-IBIG Fund retains their 3 percent housing loan interest rates with about 3,500 monthly amortization rate in 30 years. As what they have observed, buyers are now more concerned of the community and the type of development they are going to invest on more than the price.

Ilagan added that in other cities the local government units are the ones providing the land where the developers come in to provide the structure or the houses.

“Although we partner with the government to provide socialized housing, it’s just challenging for us right now if the land (price) is quite high. If we are able to find a land that is reasonably priced, they are oftentimes located very far from where people work so it’s not going to be very viable as of the moment. That would mean more transportation cost,” said Ilagan adding that the currently less expensive lands are agricultural and are already beyond the residential zones allowed of housing developers. JPA