Socialized housing mandate now covers condo developers

CEBU, Philippines - The Housing and Land Use Regulatory Board is now crafting the implementing rules and regulations for a new law that requires condominium developers to build socialized housing.

This was according to HLURB Commissioner Antonio Bernardo during the Housing Summit 2016 held in Cebu City last week.

Bernardo said Republic Act 10884 mandates condo developers to develop an area for socialized housing, equivalent to at least 5 percent of the total condominium area or the project's total cost.

"This has also reduced the (20 percent) requirement for subdivision developers to allocate just 15 percent of the area (for socialized housing)," the official told developers at the summit.

In the past, the socialized housing mandate only covered subdivision developers.

The Urban Development and Housing Act of 1992 defines socialized housing as housing projects done by government or private sector for the underprivileged and homeless citizens. It also includes sites and services development, long-term financing, liberalized terms on interest payments and other benefits.

RA 10884, which became a law last July 17, is an amendment to RA 7279 or the Balanced Housing Development Act.

According to RA 10884, developers must build socialized housing in a new settlement; or through joint venture projects for socialized housing with either the local government units or any of the housing agencies or with another private developer, or with a non-government organization engaged in socialized housing and accredited by HLURB.

The law also provides incentives to socialized housing developers.

The law reduces and simplifies the qualification requirements for private developers, creates one-stop shop in various regions for the processing, approval and issuance of clearances, and simplifies the financing procedures.

It also exempts developers form paying project-related income taxes, capital gains tax on raw lands used for the project, value-added tax for the project contractor, transfer tax for both raw completed projects and donor's tax for lands certified by the LGUs to have been donated for socialized housing purposes.

The aim, according to the law, is to increase the participation of the private sector in socialized housing development.

The law also has provisions for penalties for non-compliant developers.

For the first offense, erring developers will be imposed of a fine of not less than P500,000.

The second offense will be fined not less than P500,000 and suspension of license to do business for three to six months.

For the third offense, there will be cancellation of the developers’ license to do business.  (FREEMAN)