‘Stimulus for housing sector to aid recovery’

Providing fiscal stimulus and offering incentives to the mass housing sector are an important strategy to help the country’s economy recover from the coronavirus disease 2019 (Covid-19) pandemic, according to an industry stakeholder.

This as three real estate leaders say affordability and eased requirements, not just supply, would address the country’s current housing backlog problem.

At The Manila Times’ PH Housing Outlook: “Fostering Urban Development” online forum on Thursday, Paolo Giovanni Olivares, vice president of the Organization of Socialized and Economic Housing Developers of the Philippines Inc. (OSHDP), said such a strategy should be a part of any economic stimulus plan.

“We in [the] OSHDP believe that providing fiscal stimulus and incentives to our industry is consistent with the government’s aim of allotting resources for programs that provide sustained economic growth,” he said.

It would also contribute to the country’s economic growth amid the pandemic, added the official, who warned that the sector anticipated another “unprecedented dip” in housing production because of the current crisis.

Data shared by Olivares during the forum showed that the private sector’s contribution to socialized-housing production dropped by 49.96 percent in 2018 and 18.22 percent in
2019.

He identified three ways to move the industry forward. The first is provide stimulus funds through the Home Development Mutual Fund (Pag-IBIG Fund), banks and other financial institutions. The second is lower interest rates to 3 percent annually for institutional loans to mass housing developers. And third is incentivize programs and projects that would encourage urban dwellers to return to their provinces and other areas to reduce population density in urbanized areas.

Olivares also shared his group’s comprehensive regulatory proposal for recovery, which pushes for relaxed issuances of licenses, certificate of registration and licenses to sell; the deferment of compliance with the socialized housing requirement; and the assurance of ease of doing business.

Easing requirements

Also at the forum, Noel “Toti” Cariño, national president of the Chamber of Real Estate & Builders’ Associations Inc. (Creba), proposed relaxing housing requirements as part of his organization’s five-point housing agenda.

He called for the establishment of a housing one-stop processing center (HOPC) to centralize and fast-track the issuance of permits, clearances and licenses in accordance with Republic Act 11032, or the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018.”

“We are all hopeful that with the HOPCs, we can roll [out] projects into the market more quickly, especially with the Ease of Doing Business law,” he said.

Cariño also proposed stopping the imposition of value-added tax on housing units beyond 2021, freezing real property taxes for at least two years and capping interest rates for loans to a minimum of 3 percent as solutions to unmet housing demand.

He also proposed suspending the Balanced Housing Development Program and that the government provide provisional license-to-sell in the meantime to help launch major housing projects.

Suntrust Properties Inc. President Harrison Paltongan echoed Cariño’s sentiment, saying it was important to rationalize requirements to ensure the ease of doing business in the country.

“We need to…take out [and] eliminate those that aren’t really necessary,” he added.

Affordability, the Suntrust Properties chief said, is also key to address the backlog, noting that there was an “oversupply” of socialized housing.

Their occupancy should instead be encouraged by providing livelihood in the areas where the housing units are located, he added.

And Januario Jesus Atencio, chairman and chief executive officer of Januarius Holdings Inc., also acknowledged the difficulty in meeting requirements and blamed the country’s backlog on limited supply and growing demand.

According to the projections of the Philippine Statistical Research Institute, the backlog could reach 6.57 million units in 2022 and may balloon to 22.6 million by 2040.

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Article and Photo originally posted by The Manila Times last September 12, 2020 and written by Faye Almazan.

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