The real-estate industry warned the government that the country’s housing backlog could easily balloon to 6.5 million units by 2020, from the current 5.5 million units, if the moratorium on the conversion of agricultural lands being pushed by the Department of Agrarian Reform (DAR) is implemented.
This, Chamber of Real Estate and Builders’ Association (Creba) President Charlie V. Gorayeb said, is because the DAR-proposed moratorium will delay the rollout of housing developments by at least four years.
“Even if the ban [on the conversion of agricultural lands] is only two years, there is a gestation period from buying the land, to developing it, to introducing it into the market. So if the annual demand is at 250,000 housing units, at the end of four years, we’ll have another million on top of the 5.5 million housing backlog,” Gorayeb told the BusinessMirror.
The DAR is now reportedly crafting an executive order to operationalize the moratorium, aimed at protecting prime agricultural lands for food security.
Creba Chairman Noel M. Cariño said that, with the recent pronouncement of the DAR, developers will be hard-pressed to comply with the “balanced housing requirement” provided under the Urban Development and Housing Act (UDHA).
The UDHA provides that all subdivision developers should build socialized housing equivalent to either 20 percent of the total project area or cost of their main developments, as a way to encourage them to provide housing for the underprivileged.
“Economic and socialized housing” refers to housing units that are within the affordability level of the average- and low-income earners, which is 30 percent of the gross family income as determined by the National Economic and Development Authority.
Developers’ availment of incentives, given by the Board of Investments, also depends on their compliance with this requirement.
“We’re very concerned because it appears that the moratorium is absolute. What will happen now in terms of ongoing projects and, at the same time, the inventory of land? There’s that housing compliance requirement, but there’s no certainty of inventory of land to be used,” Cariño said.
Citing studies, Cariño said less than 5 percent of the total land inventory in the Philippines, numbering to some 29 million hectares, is allocated for community settlement.
“Land for built-up settlements is less than 5 percent of the total land area in the country, the bulk is in agriculture. That alone will show you our problem,” he added.
Considering that the total housing backlog is now at 5.5 million, and annual housing production is only at 200,000, the proposed moratorium will only exacerbate the dilemma, as developers will face additional delay in rolling out projects.
Moreover, the blanket moratorium goes against the comprehensive land-use plans (CLUPs) crafted by local government units (LGUs) to chart the land use of their territory.
“CLUPs have already been in place classifying or zoning these lands by LGUs for different purposes. LGUs through CLUPs are cognizant that the utilization of these land has already ceased to be agricultural,” Cariño said.
On a broader scale, the proposal for a two-year ban on land conversion of agricultural lands may dampen economic activity as not only housing projects are affected, but also commercial and office developments.
“Let me emphasize that we are supportive of the objective of President Duterte’s social aspect of the redistribution, but we’re very concerned of the effect on the overall well-being of the investment and other economic activities,” Cariño said.
Creba is appealing to the DAR to allow submitted applications for land conversion to proceed.
The group said it will seek dialogues with the agency and has spoken to Housing and Urban Development Coordinating Council chief , Vice President Maria Leonor G. Robredo, to air their position on the issue. “We want to come up with a proposal on how to rationalize their objectives vis-á-vis other stakeholders. We want to come up with a win-win solution,” Creba chairman said.