The government must cut red tape and permit requirements to hasten the development of housing subdivisions and make good on its thrust to ease doing business in the country. The newly-created Department of Human Settlements and Urban Development, now headed by a property developer, must realize how such bureaucratic practices have stalled housing production.
To develop a housing subdivision, a developer must go to 27 offices, get 78 permits, 146 signatures and produce 373 documents to start a subdivision housing project. Such red tape makes a mockery of the ease of doing business thrust of the government.
The law creating the Department of Human Settlements and Urban Development, RA 11201, was signed by President Duterte in February 2019 as a result of the merger of the Housing and Urban Development Coordinating Council and the Housing and Land Use Regulatory Board. It is now headed by a housing developer, Jose Acuzar of New San Jose Builders, who was bypassed by the Commission on Appointments but reappointed by President Marcos on October 4. Since he came from the ranks of developers, he is fully aware of the challenges in the housing sector.
Januario Jesus Atencio III, chair and chief executive of the Januarius Holdings Inc. told a virtual briefing that “the unintended consequence of all these housing policies is the increased bureaucracies in getting licenses and permits.”
He said the housing backlog is more of a supply issue. “If it’s a supply-side issue, then we can go back to what we know about economics and find out whether it can help us find a way out,” reported Business World.
He said the government should shorten the application for licensing, reduce the required permits and cut the processing time and release of developers’ take-outs or loans. “There should be access to faster, reliable, low-interest loans and credit lines to developers.”
Atencio cited the need for more skilled workers to stabilize labor supply. The government should likewise allow more foreign workers to offset the emigration of Filipino workers.
Atencio said that the government should also invest in innovation and technology.
“One thing we should try is to increase our level of technology in the housing industry, particularly in production. We haven’t adopted enough technology. Assuming capital and labor are equal, all growth depends on the level of technology,” he said.
“We can focus on the bureaucracies and shorten the licensing period, which means faster deployment of capital and therefore labor,” he added.
PIDS study
The Philippine Institute for Development Studies (PIDS) said local shelter plans could help address the country’s housing backlog.
These plans could be used as a roadmap to analyze housing affordability and create shelter strategies, PIDS said, citing Rowena P. Dineros, a service director at the Department of Human Settlements and Urban Development who was a panelist at a recent PIDS webinar.
“Local government units with approved local shelter plans can provide funds, do land banking, partner with the private sector for housing projects or tap the programs of housing agencies appropriate for their constituents,” she said.
As of November, only 311 of 1,634 local government units have approved shelter plans. About 3.7 million of the 6.5 million units of housing shortage are for informal settler families, the state think tank said, citing the Human Settlements department.
University of Asia and the Pacific President Winston Conrad B. Padojinog, another panelist at the PIDS forum, cited the need for private sector investment to cut the local housing backlog.
“Local government units can provide the land, extend tax incentives, identify beneficiaries, conduct social preparation activities and collect housing rent or fees,” he said. “The private sector can undertake the development, construction and management services of the property.”
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