Following the end of World War 2 there was in the UK a desperate housing shortage, many houses built before the war had been obliterated by bombing, the military which had been fighting abroad was to return home and there was an explosion expected in the birth rate—the baby boomer generation. A major problem had to be addressed in creating places for people to live.
Government recruited the help of the private sector of that time in order to address this problem and from this arose two development strategies: 1) “prefabs”—prefabricated, quick to erect, single story housing units of 59 square meters of floor area with a design life of 10 years under the Emergency Factory Made ["EFM”] housing program, containing some innovative design features of the time, and 2) an escalation of the pre-existing policy of “council houses,” constructed conventionally by local government, which are two-storey shelters with a floor area of between 93 and 58 sqm, often with three to four bedrooms and built in sometimes quite large developments of hundreds of units that include limited infrastructure such as shops and schools.
Between 1945 and 1951, 1.2 million new houses were built, resulting in state ownership of 15 percent of the national housing stock.
The Philippines has a chronic housing shortage, which is being addressed through many separate government initiatives, the most recent of which is the development of “social housing.” These are low-cost housing targeted at low-income groups and built for private ownership. Floor areas in this type of housing are in the 20-25 sqm range and construction costs are budgeted at P450,000/unit in areas with higher land values and P250,000/unit in areas with low land values.
This initiative is by the Social Housing Finance Corp., which targets to provide 530,000 homes to homeless and low-income families by 2022. In 2014, 22,000 families were provided with either shelter or land tenure, which is apparently below target if 530,000 units are to be accommodated within the 10-year plan period.
In post-war UK, 1.2 million houses were developed in six years. In the Philippines, the target is 530,000 in 10 years until 2022. Why, then, is the Philippine target so much lower than the UK’s actual achievement?
There are many reasons for this. Importantly, the UK initiative was firmly government-led to produce state-owned housing for rent to occupiers; in the Philippines the concept is home ownership, which in an Asian context is an important form of domestic security. Asians prefer to own rather than rent.
In Germany, for example, 50 percent of families rent their accommodations in a regulatory environment, which strictly enforces landlord-and-tenants rights. Obtaining and transferring land titles in the Philippines is a major hurdle due to the needs to convert government land to private land, the poor quality of land registrations and difficulties of finding owners.
Before you are able to commence a social housing program, there are likely to be months and months of research and conveyancing work to be done in order to obtain a clean title for the block of land to be developed, and it also possibly involves the eviction of squatters, and all the social anxiety that goes with that.
The pace of the development of such social housing project in the Philippines is dictated by the ability of low-income families to obtain loans in order to buy their accommodation. Obtaining loans in the Philippines is another nightmare prospect given the ever present and overly strict requirements that are continually being expanded, for any form of formal borrowing.
Low-income people intent on buying their own house have to employ “fixers” in order to complete all the paperwork, otherwise they would probably get fired from their jobs for the time they would need to be absent to fill in all the forms! “Fixers” charge a lot, which is a hidden addition to the cost of buying.
It seems to me that if, indeed, decent housing is to be developed for all and in a reasonable amount of time, there are four factors which would dramatically improve the pace of this much needed work; 1) government, or the private sector, should build low-cost housing for rent, possibly with later options to buy, 2) government should exert a heavy hand in the acquisition of land for social housing projects in a compulsory purchase style, 3) construction methods should be reviewed, with greater use of offsite fabricated components, and 4) for those who will not rent and insist on buying in the first instance some developments should be made available for owner occupier purchase and the “requirements environment” must be simplified into a much more practical and doable list. If government guarantees the bank’s loans, why should the banks be so conservative in their lending?
Housing is needed and it is needed fast. With a few changes led by an “in-control” and committed government, it can be done.
Mike can be contacted at email@example.com.