‘Encourage private sector to invest in mass housing’

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THE government must work with the private sector to address the housing backlog in the country, business tycoon and former senator Manuel Villar Jr. said.

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Villar told reporters earlier that the government needs to work with the private sector and find out why developers are not entering the lower end market where a big chunk of the backlog is.

“Either the government will do it — address the housing backlog — or you will let the private sector do it. But if you want to let the private sector do it, you just have to find out why they are not entering in a big way,” Villar said.

He noted that the country’s housing backlog is still not being met as demand continues to grow each year, which continues to widen the gap between demand for housing and the number of of houses being produced.

The current housing backlog is estimated to be around 5.5 million and is predicted to reach 6.5 million in 2030 if it remains unaddressed.

“It’s not being met. It’s not yet enough. Kasi every year, dumadagdag eh [Because every year there is additional demand]. And every year, production of the housing industry is less than the increase in demand. So lumalaki yung gap, hindi lumiliit [The gap is getting bigger, not smaller],” Villar explained.

One move that the government can make to encourage developers to enter the mass housing market, according to Villar, is to lift the price ceiling of houses under the lower-end market segments.

“There are some moves that they can make to encourage mass housing to reduce the backlog. One is to lift the P450,000 ceiling to maybe about P500,000. Because you have to build enough market for developers to go there in a big way to address the housing backlog,” Villar said.

The former senator said an adjustment in the minimum ceiling prices of low-cost housing should be done in a gradual way to be able to attract more developers into the market. He noted that the increase in price should not be drastic since it may no longer be classified under mass housing if prices are pushed up too high.

“I-adjust nila dapat yung mga ceilings, pero konti lang. Kasi pag tinaas nila masyado, baka di na mass housing yan. Dapat nasa mga from P450,000, gawin mong P500,00, from P500,000 gawin mong P525,000, Dadami na yan kasi kung konting-konti yung margin, walang magkaka-interest diyan. They must increase the ceiling para makaadjust yan,” Villar said.

[They should adjust the ceilings, but only by a little. Because if they raise it too much, it might no longer be mass housing. Those in the P450,000 price range, make it P500,000 while those in the P500,000 range, make it P525,000. In that way there would more players because if the margin is very small, no one would be interested in it. They much increase the ceiling so that there will be an adjustment]

In 2013, the Housing and Urban Development Coordinating Council (HUDCC) lifted the minimum price ceiling for socialized horizontal housing from P400,000 to P450,000.

“They increased it from P400,000 to P450,000,” Villar pointed out “But they should’ve increased it to P500,000. And every so often, there should be a slight increase just to go with inflation and that will be enough to justify investing in mass housing.”

Every government differs on how aggressive it should be in addressing the housing backlog and to be able to address the housing backlog, the government must either address it themselves, or encourage the private sector to do so.

“Either you encourage the private sector, or the government will do it in a big way. But the government is not that efficient, so it has to work through the private sector,” Villar concluded.

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