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The Philippine Housing Industry Plan: 2012-2030 By the

In Cooperation with


I. Objectives and Roadmap Framework

Objectives • What is the current status of housing need of the country? • How do we address the unmet housing needs of Filipinos?

• How can institutions contribute in addressing these needs?


I. Objectives and Roadmap Framework

Framework of the Roadmap Preparation


I. Objectives and Roadmap Framework

Industry value chain

Others

Property Management

Sales & Marketing

Construction

Planning Services

Land

Infrastructure and utilities Regulatory Technology Human resource Financial Institutions


II. Internal Analysis: Value Chain

Summary of value chain issues Positive

Negative

Regulatory BOI-ITH; Proposed DHUD

Development permits delayed in LGUs; Conflicting local & national policies; Redundancy

Infra and IT Infra projects; IT facilities&

Utilities cost absorbed by developers & buyers; lack of drainage & sewerage; expensive software

software

Human resource Financial

Availability of highly-skilled labor

Fast turnover; brain drain

Tax incentives; availability of financing

BIR Rulings, Strict bank requirements; uncertainty of ITH; lack of funds for the poor; multiple taxation, pending DOF house bill

Land

Computerization of titling; land use available in some areas; land for JV

Rising land prices; presence of informal settlers; land conversion issues; lack of CLUP


II. Internal Analysis: Economic Significance

Economic impact for every Pmillion

2.30 jobs

Value creation multiplier

For every Peso

3.32 pesos

Household income multiplier

For every peso

0.47 pesos

Tax multiplier (Indirect)

For every peso paid in taxes

3.90 pesos

Job creation multiplier


II. Internal Analysis: Value Chain

Summary of value chain issues Positive

Planning services Availability of experts

Negative

IncompleteCLUP’s

Construction

New construction technologies; inexpensive materials

Increase in costs of other items; lack of qualified contractors; increase in labor costs

Sales & marketing

Strong brand campaigns, healthy competition

Restrictive guidelines on selling & marketing activities

Property management

Presence of professional property management

Absence of institutionalization of estate management

Others

HDMF, CSR of companies; industry associations and NGOs

Eviction process very tedious and slow; maceda law


III. External Analysis: Housing Need

Factors needed to address housing need Need

Production

Financing program

Affordability

Policy framework


III. External Analysis: Housing Need

Housing need can reach 12.5-million in 2030

Source: Projections using SRTC framework; HUDCC


Housing Segments

4.5%

Source: SHDA; HUDCC


III. External Analysis: Housing Need

Matching housing cost with capacity to pay

Source: FIES 2009

Source: SHDA; CRC


III. External Analysis: Housing Need

HOUSING DEMAND AND SUPPLY PROFILE 2001-2011 Housing demand (Households)

Housing supply

Surplus/ (Deficit)

Socialized Housing

1,143,048

479,765

(663,283)

Economic Housing

2,503,990

541,913

(1,962,077)

Low Cost Housing

704,406

242,246

(462,160)

Mid Cost Housing

72,592

322,995

250,403

High End Housing

18,235

242,246

224,011

Excludes 832,046 households that can’t afford

Backlog – 3,087,520

Market Segment


III. External Analysis: Housing Need

NEW HOUSING NEED 2012- 2030 Market Segment

Price Range

Units Needed

% Total Need

Can’t Afford/ Needs Subsidy

400k& below

1,449,854

23.28

Socialized Housing

400k & below

1,582,497

25.41

Economic Housing

400k-1.25m

2,588,897

41.58

Low Cost Housing

1.25m-3m

605,692

9.73

Mid Cost Housing

3m-6m

No Need

High End Housing

>6m

No Need

TOTAL NEED

6,226,940

100.00

This total new need is an average of 345,941 housing units per year.


III. External Analysis: Housing Need

TOTAL HOUSING BACKLOG as of 2011

Those who can’t afford

832,046

Housing Backlog 20012011

3,087,520

TOTAL

3,919,566

ESTIMATED BACKLOG BY 2030 IF NO SPECIAL HOUSING PROGRAM IS CREATED Particulars

Units Per Year

Number of Years

Current Housing Backlog

Total Units

3,919,566

New Housing Need 2012-2030

345,941

18

6,226,540

Housing Production Capacity

200,000

18

(3,600,000)

Backlog by 2030

6,546,106


III. External Analysis: Policy Support

Regulatory Framework: Structure SSS, HDMF, GSIS

Direct Gov’t housing production

Guarantee for Gov’t housing mortgages

NHA

HUDCC (EO 90 of 1987)

HGC

Financing arm

NHMFC (SHFC & BHFI)

HLURB

Gov’t general Housing programs

Regulatory & quasi-judicial functions


III. External Analysis: Policy Support

Current policy regime inadequate to address growing housing deficits • Government subsidy programs failed to reach intended beneficiaries, particularly those who cannot afford • Private capital left out of the housing program. Government takes burden and risk of shouldering cost of housing program. • Meeting shelter needs based exclusively on ownership excluding other forms of shelter • Lack of estate management program • Relocation programs may have adversely affected livelihoods of the beneficiaries • Lack of structure and capability of government to monitor, collect and manage funds


III. External Analysis: Policy Support

Lessons from housing programs of selected countries Malaysia • Quality & affordable housing for sale or rent • Housing for lowincome & informal settlers • One-shot capital subsidy • Rehabilitation of old houses & communities

Brazil • Rationalize institutions & legal & regulatory framework for housing – one central housing agency • Develop of formal housing finance market • Comprehensive housing subsidy • Reduce barriers to formality of housing & services for the poor

Indonesia

Thailand

• Upgrading of slum areas and houses of lowincome households • Planning new sites for housing • Strengthen institutions responsible for program delivery

• Provide all necessary infra support for housing projects • Slum upgrading and improvement • Assistance to centralize housing agency


III. External Analysis: Policy Support

Current mechanisms of housing subsidy Direct subsidy program

Agencies

Below market interest rates & fixed long-term loans

SHFC, HDMF, CMP

Direct government housing production & resettlement programs, land acquisition or land grants

NHA, LGU, Office of the President


III. External Analysis: Policy Support

Current mechanisms of housing subsidy Indirect subsidy program

Agencies

ITH for mass housing projects

BOI, UDHA

Loan guarantees & low premium payments

HGC

Loan loss provisions

SHFC, HDMF, CMP, AKPF, NHMFC

Recapitalization of insolvent housing agencies

NHMFC, HGC


IV. Closing the Gap: Vision, Goals & Strategies

VISION STATEMENT Every Filipino familyhas the right to live withdignity in the comfort of one’s own home regardless of economic status. With full government support, we, the housing industry, envision to eliminate the housing backlog by the year 2030


IV. Closing the Gap: Vision, Goals & Strategies

Roadmap milestones to eliminate housing backlog …2M Homes by 2022 … 1M Homes by 2016 Socialized housing Socialized urban/public housing Socialized urban Socialized non-urban Economic Low cost Total Capital investments (P-million) Jobs created Proportion of projected emplyt Avg Value-added created (P-billion) % of projected current GDP Household incomes (P-billion) % of projected current GDP

2012-2016 443,378 110,845 110,845 221,689 382,064 157,343 982,785 882,713 856,231 2% 586 5% 415 0.64%

… 7M Homes By 2030 Socialized housing Socialized urban/public housing Socialized urban Socialized non-urban Economic Low cost Total Capital investments (P-million) Jobs created Proportion of projected emplyt Avg Value-added created (P-billion) % of projected current GDP Household incomes (P-billion) % of projected current GDP

2017-2022 Socialized housing 1,008,166 Socialized urban/public housing 252,041 Socialized urban 252,041 Socialized non-urban 504,083 Economic 948,383 Low cost 282,015 Total 2,238,563 Capital investments (P-million) Jobs created Proportion of projected emplyt Avg Value-added created (Pbillion) % of projected current GDP Household incomes (P-billion) % of projected current GDP

1,919,333 1,551,461 4% 1,062 5% 902 0.69%

2023-2030 3,076,134 769,034 769,034 1,538,067 3,220,526 628,491 6,925,151 5,653,750 3,427,586 7% 2,346 6% 2,657 0.79%


IV. Closing the Gap: Vision, Goals & Strategies

Objective 1 – Increase housing production To forge alliances among housing developers Notes superimpose Pop Growth data and industry partners to attain:

1 million homes for 2012-2016 2 million homes for 2017-2022 7 million homes for 2023-2030

Sustain 12% production volume every year


IV. Closing the Gap: Vision, Goals & Strategies

Objective 2 – Implement a comprehensive government housing subsidy program for target segments to enhance affordability Government subsidy program budget 2012-2016 Direct provision of housing for those who can’t afford and socialized housing (cash) Direct production subsidy (P-million) Public housing (NHA) Socialized housing MRB (SHFC) Total Annual average Maintain current ITH subsidy for socialized, economic & low cost housing (non-cash) Socialized non urban (UDHA-ITH) Socialized urban (BOI-ITH) Economic (BOI-ITH) Low cost (BOI-ITH) Total Annual average

2017-2022

2023-2030

Notes superimpose Pop Growth data 79,808 44,338 124,146 24,829

181,470 100,817 282,286 47,048

553,704 307,613 861,318 107,665

2,660 4,225 13,754 14,161 34,801 6,960

6,049 9,607 34,142 25,381 75,179 12,530

18,457 29,314 115,939 56,564 220,274 27,534


IV. Closing the Gap: Vision, Goals & Strategies

Objective 3 – Generate and mobilize funds for end-user financing End-user financing program budget Mobilize pubic andprivate capital into housing (P-million) 2012-2016 2017-2022 2023-2030 Socialized (urban) by HDMF

44,599

101,410

309,423

Socialized (non-urban) by HDMF

79,808

181,470

553,704

Economic by HDMF & Private banks

275,086

682,836

2,318,778

Low cost by HDMF & Private banks

251,749

451,224

1,005,585

651,242

1,416,939

4,187,491

130,248

236,157

523,436

Total Annual average


IV. Closing the Gap: Vision, Goals & Strategies

Objective 4 – Improve the housing regulatory environment Every housing related permit, certification, clearance and license shall be acted upon within a maximum period of ten working days Resolving conflicts between local and national housing policies and guidelines

Enhanced representation of the housing industry in vital policy fora


IV. Closing the Gap: Vision, Goals & Strategies

Objective 1: Increase housing production

Strategies

Partners

Action Plan

Timetable

1. Government production of socialized (urban) housing program for long term lease

NHA, HUDCC

1. Developers to partner with NHA, LGUs with IS programs

Q3 2013

2. Initiate global standards to guarantee safety and quality

SHDA, ASEP

1. SHDA to coordinate with ASEP and other agencies to come up with unified standards.

Q1 2013

3. Standardization of building components

AITECH, SHDA, BPS, DTI, HUDCC

1.

Q1 2013

2.

SHDA to push for consistency in the interpretation of standards, modularization and measurement system. Training of LGUs/Building Officials involved in permits necessary


IV. Closing the Gap: Vision, Goals & Strategies

Objective 1: Increase housing production Strategies 4. Adopt innovative building technologies for increased building efficiency

Partners SHDA, AITECH

Action Plan 1.

2.

AITECH to publish accredited building technologies available for industry players to consider in their developments. Coordinate continuously with AITECH for quarterly updating of list on web

Timetable Q1 2013

5. Initiate discussion on adopting green- and environment-friendly technologies

SHDA, UAP, PGB

1. Push for incentivizing green practices in the project development.

Q1 2013

6. Develop programs to upgrade and expand local pool of suppliers

SHDA, FPI

1. Coordinate with FPI and provide list of materials needed by the industry

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 1: Increase housing production Strategies

Partners

Action Plan Provide reliable source of data of housing production to concerned government agencies

Timetable

7. Establish partnership with SHDA, HUDCC, NSO, government agencies in HLURB, NHA data generation & monitoring

1.

8. Establish a training institution for housing industry

SHDA, TESDA, CMDF

1. Tap local and foreign institutions that will offer training and share this among members

Q2 2013

9. Comprehensive government financing program

HDMF, BOI, DOF, BSP, NHMFC, HGC, SHFC

1. Coordinate with government financing institutions to support a formal housing finance market and effective subsidy schemes (Direct and indirect.

2012 – Q2 2013

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 1: Increase housing production Strategies

Partners

10. Alignment/Streamlining of regulatory framework

LGUs, key shelter agencies, DAR, DENR, HLURB

Action Plan 1.

2.

Continue working with HLURB/LGUs on CLUP Align different agencies affecting the industry (G2G)

Timetable 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 2: Implement comprehensive subsidy program for target segments to enhance affordability Strategies 1.Institutionalize ITH for socialized (non-urban; UDHA) and socialized (urban), economic and low cost housing (BOI)

Partners BOI, HUDCC, DOF

Action Plan

Timetable

1. Amendment of RA 7279 to institutionalize subsidy 2. Charter Amendment (legislation) Lowering interest rates further for CMP; exemption from Income Tax 3. Ensure the benefit of ITH to adjacent industries are extended to Housing 4. SHDA position paper to align BOI SH compliance guidelines with that of HLURB’s

Q3 20132016 Q3 20132016 2012-Q3 2013 Q1 2013

2. One time housing production subsidy for socialized (urban) and urban development housing at P400K per household

SHFC, HUDCC

1. Working group for the appropriate delivery mechanism for subsidy & justify need to drop required BIR ruling

2012-Q1 2013

3. Strict monitoring of target of beneficiaries

HUDCC,DSWD DILG,NHA,SHF C

1. Establish database of eligible beneficiaries to eliminate double/multiple availment

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 2: Implement comprehensive subsidy program for target segments to enhance affordability Strategies

Partners

Action Plan

Timetable

4. Lease vs. Ownership model

NHA, SHFC, LGU, HUDCC

1. Study Disiplina Village Model (public rental housing)

Q1 2013

5.Ensure listing of mass housing in the 2013 IPP

BOI, HUDCC, DOF

1. Submit SHDA Position Paper to BOI and HUDCC on Mass Housing Listing for 2013 2. Secure HUDCC endorsement for the retention of P 3M price ceiling for low cost and mass housing 3. Study improvements on reasonable validity of ITH

Q1 2013

Q1 2013 Q1 2013

6. Simplify documentary requirements on ITH application

BOI, HUDCC

Submit position paper to BOI

QI 2013

7. Pursue the abolition of requirement for BIR Rulings as a condition for exemption from Creditable Withholding Tax for project registered under BOI (with BIR Com.)

Congress (Office of Cong. Valencia) and Office of Dep. Com Aspe

1. Follow-up Congress’ Committee Report on the hearing conducted on 12 Dec. 2012 2. Undertake dialogue with BIR

Q1 2013

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 2: Implement comprehensive subsidy program for target segments to enhance affordability Strategies 8. Revert to previous BIR practice of Decentralized issuance of Rulings

Partners Congress (Office of Cong. Valencia)

Action Plan 1. Follow-up Congress’ Committee Report on the hearing conducted on 12 Dec. 2012

Timetable Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 3: Generate and mobilize funds for end-user financing Strategies

Partners

1. Expand and mobilize the untapped resources of the private sector

BSP, CTB, UKB Insurance companies HGC

Action Plan 1 . Forge partnerships with private banks and other bodies.

Timetable Q1 2013

Q1 to Q2 2013 2. Co-Organize a Real Estate Financing Summit with BSP, HGC, and bank associations

Q1 2013

3. Initiate the creation of a TWG for the purpose of upgrading the rating of HGC

BSP

4. Streamline and standardize 2013 requirements and forms for all loans and CTS . Establish guidelines for CTS best practices.


IV. Closing the Gap: Vision, Goals & Strategies

1.

Objective 3: Generate and mobilize funds for Strategies Partners Action Plan Timetable end-user financing Expand and 5. BSP to differentiate residential Q1 2013 mobilize the untapped resources of the private sector(contd)

2. Augment shelter lending capability of Gov’t. housing finance agencies

real estate loans from other real estate loans (tourism, commercial, etc.

Pag-IBIG

1. Review status of SHDA – HDMF TWG on the latter’s circular issuances 2. Submit and discuss SHDA Recommendatiuons (including rental housing funding) through the TWG

Q1 2013

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 3: Generate and mobilize funds for end-user financing Strategies 2.

Partners

Augment Pag-IBIG shelterlending capability of Gov’t. housing finance agencies (contd)

Pag-IBIG, NHMFC, SHFC, HGC

Action Plan

Timetable

3. Roll out Pag-IBIG “housing hubs. Establish wholesale lending guidelines, create express lanes for good performing developers (Category A/B). 4. Pag-IBIG to revive CTS financing window (with buy-back/post audit)

Q1 2013

5.Outsourcing of major components of home lending such as but not limited to appraisal, collection and servicing, property management

Q1-Q2 2013

Q1 2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 3: Generate and mobilize funds for end-user financing Strategies 2. Augment shelter lending capability of Gov’t. housing finance agencies (contd)

Partners Pag-IBIG, LRA, BSP, DOF

Action Plan

Timetable

Streamline systems on credit and collection, foreclosure and repossession: HDMF assistance in advance CI, pre-qualification of borrowers Facilitate release of land titles – for faster loan approvals. Title insurance and centralized depositary location of titles for scripless trading of securitized home mortgages.

HDMF to help in BIR, LRA document processing thru G2G arrangements (Pag-IBIG Fund to “take all the credit folders”.

2013 Q2 2013

2013

2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 3: Generate and mobilize funds for end-user financing Strategies 3. Expand nontraditional financing programs

Partners

Action Plan

Timetable

NHMFC, HGC, Banks

1. Institutionalize mechanisms on securitization, REITs

2013

Pag-IBIG

2. Establish Pag-IBIG and bank funding Usufruct/ lease hold

2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 4: Improve the housing regulatory environment Faster processing of Housing Permits: 1. HLURB to adopt standard requirements and monitor implementation thereof 2. As a joint project of SHDA, DILG and HUDCC, SHDA will set-up a website to monitor the timelines of the filing of Development Permits with LGU, this will include the Ombudsman and CSC 3. SHDA to enter into a MOA with the LCP and LMP on the standard faster processing of housing permits similar to what they did to business permits Strategies

Partners

Creation of the DHUD

Congress, HUDCC, SHDA

Strictly implement ARTA Law

DOJ, SHDA, LGU

Institutionalize the HUDCC, DTI, ITH-ruling for UDHA DOF-BIR and BOI-IPP

Action Plan

Timetable

2013 1. If conflicts arise regarding policies, approvals and others related to housing, this shall be resolved by the Secretary of the Dept. of Housing 2. To bring back under the adjudication power of the new HLURB resolution of conflicts between developer and buyers on transactions based on License to sell. DILG through Civil Service Commission to 2013 implement ARTA law. If legally feasible, DILG to come out with an MC that the approval of DP shall be vested with the Office of the Mayor.

Addressed in Workshop 2: Affordability

2013


IV. Closing the Gap: Vision, Goals & Strategies

Objective 4: Improve the housing regulatory environment Strategies

Partners

Action Plan 1. SHDA to seek legal opinion from DOJ through DILG 2. DILG to file administrative case against erring local officials

Timetable

Harmonize local and national laws and IRR affecting housing

DPWH, SHDA, HUDCC

Q1-Q2 2013

Issue EO to prepare and update CLUPs

HUDCC, HLURB, HLURB to implement the CLUP 2013 “Zero� backlog for cities and OP, LGUs

LGU law amendment

Congress, SHDA, HUDCC

municipalities as mandated by HUDCC Chair Proposal that the Department of Housing shall set standards and guidelines on the requirements of Housing Permits and train the LGU to ensure strict implementation.

2013-2016


IV. Closing the Gap: Vision, Goals & Strategies

Objective 4: Improve the housing regulatory environment

Other Comments/Suggestions Concern/Issue

Agreements/Next Steps

1. Parallel processing of PALC and DP for condominium projects 2. Deed of Donation

SHDA to work with DILG and HLURB for mandatory acceptance

3. Performance Bond for LTS

SHDA to bring this to the attention of DILG

4. Capability of local officials to run the Local Housing Board

Training and empowerment and seal of good housekeeping by DHUD


IV. Closing the Gap: Vision, Goals & Strategies

Summary and conclusions What is the current status of housing need of the country? – 3.9 million housing unit backlog including 832,000 families who cannot afford (2011) – Housing need will increase to 10.1 million units and given the current capacity and without a comprehensive program, the backlog can hit 6.5 million by 2030 – Current Industry capacity and housing programs are inadequate to eliminate the housing backlog


IV. Closing the Gap: Vision, Goals & Strategies

Summary and conclusions How do we address the unmet housing needs of Filipinos? We Envision to eliminate the backlog by 2030 I. Increase housing production II. Enhance housing affordability by developing comprehensive housing subsidy programs for targeted beneficiaries III. Mobilize and generate housing finance for enduser financing IV. Improve the regulatory environment for housing


IV. Closing the Gap: Vision, Goals & Strategies

Summary and conclusions How can institutions contribute in addressing these needs? ďƒźFormulate, refine and pursue the strategy program for housing ďƒźChampion


SHDA Housing Roadmap to 2030