Solving the housing crisis will be an economic boon for PH

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VICE President Leni Robredo, in her role as head of the Housing and Urban Development Coordinating Council (HUDCC), issued a challenge to the country this week to address the rapidly growing crisis in low- and middle-income housing.

Citing government data, Robredo pointed out that by the end of this year, the shortage of affordable housing will balloon to about 5.7 million units. To catch up to the backlog, the Philippines will need to build approximately 2,600 new homes every day for the next six years.

And that alarming statistic does not even take into account the future housing needs of our growing population. Even if that completely impossible task could be accomplished, at the end of the six years, there would still be a deficit of several hundred thousand homes.

The situation becomes even more alarming when one considers that a ‘housing unit’ is actually home to a family; the average family size in the Philippines is about five people. That means 28 million people potentially do not have adequate housing in this country — and given Filipinos unique penchant for including parents, in-laws, other relatives, and domestic help in their households, the number is very likely much higher.


Although Robredo’s speech lacked some details, she did touch on the basic reasons why the housing gap has been allowed to grow so large.

From the private sector point of view, affordable housing is unattractive; a house or condo unit that is sold for only P1.5 million generates a smaller income for a builder than one that can be sold for P10 million. Even those developers who recognize there is a huge, largely untapped market for affordable housing — and there are a number of developers who do — find it difficult to make that business as profitable as building for the higher-end market, because the difference in revenue has to be made up in volume, which puts an often insurmountable strain on the company’s capabilities.

From the government point of view, meeting the need for affordable housing has been made difficult by years of policy inattention; agencies to address the problem have been created, and the issue has always been given sufficient lip service, but a strong, comprehensive policy has never been given the priority it deserves. And developers have complained that bureaucracy and red tape makes the process to launch an affordable housing project unattractive.

Robredo recognized that the government needs to encourage rather than discourage the private sector by offering, at a minimum, the incentive of a trouble-free process, and perhaps even some tax or other economic inducements instead. That is a good perspective.

By the same token, so was her call to the private sector to be a bit more socially aware, and be willing to take a chance on developing affordable housing. The market for high-end housing is not limitless, after all, and even if they individually do not represent the same level of buying power, the households of the affordable housing market vastly outnumber the high-income ones. Building homes and communities to meet their needs taps a huge pool of wealth, creates jobs, and creates new businesses and services at a much faster rate than high-end development. And it creates potential future customers for the builders as well.

Taking the call to tackle the affordable housing gap seriously and making it a key priority will bring nothing but great economic and social benefits to the country, and should be given the full support of both the government and private sector.

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4 Comments

  1. Roberto Saguing on

    We need someone who knows how to solve these problems, not a politician with zero background on the real estate industry! Replace her now!

  2. Roberto Saguing on

    Everyone in the housing industry knows this since forever. Everyone knows about these backlogs, lack of incentives for private investors for low cost housing, the presence of demand but lack of supply, lack of coherent policy from government, blah blah blah blah!Just ask CREBA. What then are you suggesting Ms. VP? Nothing new here, except soundbites. WHAT SHOULD THEN BE DONE? Now?

  3. Just ask DU30 you want the half million surrendered addicts to be sent to a giant work-rehab center in lahar land, so they can make hollow blocks, and build something Instead of spending all day talking about their feelings and shaking their ass at zumba. The project is simple WORK FOR REHAB!

    And for sanity’s sake, tigilin ang panay official foreign travel mo, tama na lamierda to the max, your meetings in secret with foreign emissaries are making the administration paranoid of you.

  4. Leni has a vision. A vision of life, a vision of helping the poor and the destitute. She has live with the poor people the majority of her life. It is a life worth living. How many of us has the capacity to help, to heal and to support our kababayans ? I pray that her position as VP will not corrupt her. I pray that God and the memory of her husband guide her, protect her, support her in her life long struggle to help the poor. God bless our nation. It is the only one we have.