Committee Report Subdivision and Housing Developers Association
22nd National Developers Convention September 26 & 27, 2013 Fairmont Hotel, Makati City
SHDA 2013 Report Update from the President and Strategic Committee Chairs
Housing Production LTS (2003-2012) 300,000 264,237 250,000
27%
220,756 200,124 200,000
187,001 172,883
No of Units
Socialized Hsg High end
195,807
172,967
167,229
170,379
31%
150,000 131,130
Mid cost
Low cost Economic
100,000
42%
50,000
0 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Housing Production NSO (2000-2012) 2000-2012 NSO-SHDA New Res Units 250,000 200,000 150,000 100,000
50,000 0
Road map 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 • 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
4 objectives to Eliminate Housing Backlog by 2030
Increase Housing Production Capacity, to Sustain 12% Annual volume growth
2
Need
1 Production
Affordability
4 Generate and Mobilize Funds for End-User Financing
Implement a Comprehensive Govt Housing Subsidy for targeted Segments
3 Financing program
Policy framework
Improve Regulatory Environment for Housing
The Roadmap Groundwork o Restructuring SHDA o Partnering to influence Results o Strong SHDA Brand o Strong SHDA Organization
Production Committee
By: Augusto Leonardo Committee Chair
Analyzing the Situation Production Committee
Coherent with the Housing Roadmap, SHDA aims to find ways and means to be able to manage costs of construction, specifically construction materials
Where we come in Production Committee
To attain this SHDA opted to approach it from three pillars, namely: • SHDA to negotiate, for and behalf of its members with manufacturers and suppliers of construction materials for a fixed period of supply agreement with locked in prices and/or terms.
Where we come in Production Committee
• Develop an approach for the standardization of selected construction materials for the housing industry. • Seek and engage construction technology where efficiency as the main consideration translating the same to the reduction of the cost to construct.
Making Progress Production Committee
Supply Agreement: • SHDA-HOLCIM MOA now in effect. Substantial volume of purchase has been made to date. • MOA with CEMEX now on its final stages. Period covered is one year
Making Progress Production Committee
• Now in the pipeline are negotiation for Latex Paint; Electrical Wires; Ceramic tiles. For the latter two, negotiations are being made with their respective manufacturers’ association.
Making Progress Production Committee
STANDARDIZATION: • Initial step taken is to gather from a sampling base of developermembers the construction materials that would be common to all.
Making Progress Production Committee
• Result of the survey are: Common rebars for vertical and horizontal; Pre-painted roofs; ceramic tiles; electrical wires; latex paints; ficem board; C-purlins • These materials will now be a subject of a supply MOA with it’s respective manufacturers
Making Progress Production Committee
TECHNOLOGY: • Explored with a local manufacturer its technology of pre-fabricated roofing. With SHDA’s inputs further R&D are being made.
Subsidy & Incentives Committee
By: Armi Ballesteros Committee Chair
Analyzing the Situation Subsidy & Incentives Committee
Objective: Implement a comprehensive subsidy program for target segments to enhance affordability
Analyzing the Situation Subsidy & Incentives Committee
Housing Segments and Income Affordability Socialized housing
1,950 monthly
>400K – 1.25M
Economic
3,250
>1.25M-3.0M
Low-cost
10,125
>3.0M- 4.0M
Medium Cost
27,500
>4.0M
Open Market
55,000
<=400K
INCOME AFFORDABILITY •30-35% of the disposable income match the equated amortization •Loan to value ratio is typically 80:20 •Loan payment term of 20-30 years
Analyzing the Situation Subsidy & Incentives Committee
Market Segments and Income Affordability Required Minimum Family Income
Market Segment
Surplus/ (Deficit) as of 2011
Supply (2012 LTS)
Socialized
(663,282)
71,344
78,000
6,500
23,400
1,950
(1,962,077)
76,629
130,000
10,833
39,000
3,250
(462,160)
34,351
405,000
33,750
121,500
10,125
250,403
47,562
1,100,000
91,667
330,000
27,500
224,011
34,351
2,200,000
183,333
660,000
55,000
(<=400K)
Economic (>400K - 1.25M)
Low Cost (>1.25M - 3M)
Mid Cost (>3M - 6M)
Annual
Estimated Amortization
Monthly
Annual
Monthly
High End (>6M)
Total
264,237
Analyzing the Situation Subsidy & Incentives Committee
•Availability of Incentives • EO 226: mass housing listed as a priority area in 2012 Investment Priorities Plan -Income Tax Holiday; Duty-free imports of Capital Equipment
•RA 7279: socialized housing -Income Tax Holiday, exemption from CGT on land
Analyzing the Situation Subsidy & Incentives Committee 2,000,000 1,800,000 1,600,000
1,882,513
V 25%
H 75%
1,400,000 1,200,000
V 45%
H 55%
Com SH 68%
Reg SH 32%
1,000,000 800,000
790,657
600,000 400,000 200,000
508,277 268,836
0
Total LTS Sources: HLURB: Licensed to Sell; BOI: Registered Projects
Eco & Low Cost (400K-3M) low cost 30%
eco 70%
BOI Registered
Socialized Housing (excluding compliance thru NHA)
eco low 40% cost 60%
•The industry produced 1.88 million housing units from 2003-2012 •42% consist of economic (29%) and low cost (13%) •34% registered with the BOI over the 10 year period; increasing to 53% in 2008-2012 •Socialized Housing accounts for 27%, 68% of which is compliance for HLURB and BOI •Total project cost of registered projects is P223 B, 64% from vertical •Generated 512,915 jobs over 10 years
Analyzing the Situation Subsidy & Incentives Committee
•Concerns on incentives continuity and availment – BOI: Annual listing in the Investment Priorities Plan – DOF:Objection on the grant of ITH for mass housing – BIR: Ruling for exemption from CWT prior to issuance of CAR; CGT exemption on land for socialized – HLURB/BOI: Socialized housing compliance
Where we come in • SHDA intervention
Subsidy & Incentives Committee
• Industry position submitted to BOI for Ensure the continued listing of mass housing in incentives the 2013 IPP (March 2013) are retained • Justifications presented to BOI, HUDCC in 2013 and DOF (April & May 2013) • Submitted position paper to BIR (May 2013) Address BIR – done in partnership with BIR Committee • Socialized housing projects and BOIRuling Requirement registered mass housing projects requested to be included in “No-Ruling Areas” of BIR
Where we come in • SHDA intervention Adjust Price Ceiling and Creation of New Category Passage of law on housing incentives
Subsidy & Incentives Committee
• Supported the OSHDP proposal •Increase price ceiling of SH to P450K •Creation of a new category: socialized MRB at P750K and P840K • Discussed at HUDCC Policy Working Group (June 2013) • Study on the adjustment of the economic price ceiling is on-going • Amendments of RA 7279 in 16th Congress (in partnership with Legislative Committee)
Making Progress • Status intervention
Subsidy & Incentives Committee
• Housing roadmap is among the BOI sectoral roadmaps for integration Ensure • Included in the cluster with Cement, Roadmap Ceramic Tiles, Iron & Steel Implementation • Inter-Agency working group formed by BOI to support its implementation
Where to take it next • Moving Forward
Subsidy & Incentives Committee
•BOI: 2014 IPP Framework •NEDA: Affordability per income group •HUDCC/DILG: Recognition of socialized MRB for in-city development •SHFC: Programs for socialized MRB
Where to take it next Subsidy & Incentives Committee
•What Committee wants to hear from Govt Agency Partner’s in Plenary •HUDCC: Government’s policy direction on housing development (all segments) • BOI/HUDCC: • Inter-agency high level mechanism to implement the roadmap • Industry level consultation for new policies • BOI/BIR: Streamline ITH availment process
Resolutions: Subsidy & Incentives Committee RESOLVED, Further, That for Breakout Session No. 2: “Affordability: Access to Affordable Housing: Whose job is it?”, for SHDA to continue its efforts and advocacies to achieve the following, to wit: • Active participation in the consultations with the National Economic and Development Authority (NEDA) and the Housing and Urban Development Coordinating Council (HUDCC) for the expeditious approval of in-city socialized medium rise buildings (MRB) as socialized housing compliance, and by eventually setting the price ceiling at Php 550,000 (excluding land); • Pursue approval of the HUDCC Council for the increase in price ceiling for horizontal socialized housing development to P450,000 from P400,000, which was set since 2007, to encourage participation of more industry players in providing decent homes for the needy;
Resolutions: Subsidy & Incentives Committee •
Continuous coordination and dialogue with the Board of Investments to ensure inclusion of mass housing in the 2014 Investment Priorities Plan, and effect a streamlined process for the availment of the Income Tax Holiday incentive hand in hand with actual delivery of socialized housing units;
• Explore other options for more affordable monthly amortization for the lower income sector, through the Conditional Cash Transfer Program, housing microfinance, cash for work, and other innovative financing schemes; and, • Promote partnerships among the government, private sector and non-government organizations to support the People Plan initiatives of the government for the benefit of informal settler families (ISF) along the waterways and danger zones.
Regulatory Committee
By: Rodelio Racadio Committee Chair
Regulatory Committee • OBJECTIVES :
To streamline the permitting and licensing processes with the various key agencies in the housing industry To address pertinent issues and concerns of the developers with the various regulatory agencies .
Analyzing the Situation Regulatory Committee
Issues and Concerns with the Regulatory Agencies Housing and Land Use Regulatory Board (HLURB) IRR on Section 18 Advertising Guidelines COCs Requirement for HOA Conformity Land Registration Administration Delays in the Title Transfer Errors in the Titles Shortage of Judicial Forms High cost of IT Fees
Analyzing the Situation Regulatory Committtee
Issues and Concerns with the Regulatory Agencies Bureau of Fire Protection (BFP) Automatic Fire Suppression System (AFSS) requirement for buildings 15 meters high or 4 – storeys and above Amendment to the various provisions on the Fire Code DPWH-National Building Code Development Office Mandatory installation of Accellerograph in buildings 10-storeys and above.
Where we come in • SHDA Intervention
Regulatory Committee
HLURB SHDA submitted a Position Paper to HLURB for the reconsideration of some provisions which affect the the production and delivery of housing units. Accreditation of Socialized Housing developer Timing of compliance project’s delivery Future use of compliance projects with DPs issued prior to the effectivity of the IRR.
Where we come in • SHDA Intervention
Committee Report
LRA -RD SHDA established close coordination with the Central Office, LARES and the various RDs in the field to identify bottlenecks and red lights in the titling process. Regular Meetings with the LRA Administrator and other agency officers Conduct business meetings with stakeholders SHDA as an active member of TOPS
Where we come in • SHDA intervention
Regulatory Committee
Bureau of Fire Protection SHDA submitted a Position Paper, thru the Bureau of Fire Chief Gen. Carlito Romero, for the moratorium on the implementation of the Automatic Fire Suppression System (AFSS) for vertical developments. SHDA recommended holding a Fire and Safety Summit to be attended by all the stakeholders from the professional organizations, academe, government agencies, developers, builders, etc.
Where we come in • SHDA intervention
Regulatory Committee
DPWH-NBCDO Through SHDA’s effort, a Moratorium for the implementation of the installation of Accelerograph (motion sensor) equipment for vertical structure was issued 06 November 2012, while the guidelines and specifications to be adopted SHDA met, jointly, with DPWH-PHIVOLCSASEP-SHDA. It was agreed that the ASEP will draft the guidelines to be presented to DPWH, PHIVOLCS and the stakeholders.
Where we come in â&#x20AC;˘ SHDA intervention
Regulatory Committee
DPWH-NBCDO ď&#x192;&#x2DC; Another letter was sent to Sec Singson of DPWH to reiterate our position and appeal for the re-instatement of the moratorium until all the implementing rules and guidelines are made available to the stakeholders.
Where to take it next Regulatory Committee
What the SHDA Members want to hear from Govâ&#x20AC;&#x2122;t Agencies in the Break out Sessions ? HLURB: Have we streamlined the permitting process? LRA: Computerization Program: Where are we now?
Resolutions: Regulatory Committee RESOLVED, That, for Breakout Session No. 1: “Regulatory: “Streamlining the Permitting Process”, for SHDA to initiate and/or facilitate efforts to achieve the following, to wit: •
The inclusion, in the Housing and Land Use Regulatory Board guidelines, of a provision for extension of time to complete development of condition in the event of of force majeure as shall be defined by SHDA subject to approval of Housing and Land Use Regulatory Board, in the time table to complete development for Housing Projects.
•
Continue to work with HLURB towards further simplification and relaxation of rules and standards to promote greater volume of housing production critical to achieving the housing industry roadmap towards eliminating the huge housing backlog in the country by 2030.
•
The modification, revision , amendment or repeal of the provisions of the Magna Carta for the Home Owners biased against the developers;
Resolutions: Regulatory Committee •
The inclusion, in the Housing and Land Use Regulatory Board guidelines, of a provision for extension of time to complete development of condition in the event of force majeure as shall be defined by SHDA subject to approval of HLURB. in the time table to complete development for Housing Projects.
• The modification, revision, and amendment of PD 1529 to make it adaptable for computerization, in cooperation and coordination with the Land Registration Authority (LRA);
• To work out jointly with the LRA a program or a system by which SHDA members may advise particular RDs and the LRA in advance of titling needs for projects in order to minimize the problem of chronic shortage of judicial forms.
Resolutions: Regulatory Committee
• The establishment/set-up of Help Desk/Complaint website in Metro Manila and Regions with LRA, where SHDA and its member developers have chapters for a speedy resolutions of developers’ concerns; and • The holding of regular joint meeting between LRA and SHDA’s Chapters in different regions to protect developers titles from requirements.
Financing Needs Committee
By: Christopher Narciso Committee Chair
Analyzing the Situation Financing Committee
P 651 Billion 1 million housing units 2012 - 2016
Analyzing the Situation
Financing Needs Committee
• Home Development Mutual Fund (HDMF) • Private Banks • National Home Mortgage Finance Corp. (NHMFC) • Banko Sentral ng Pilipinas (BSP)
Analyzing the Situation Financing Needs Committee
HDMF (Pag-ibig) Launched the new Circular 310 for Retail Housing Loan Program in 2012 together with the Buyer Evaluation System (BES). Lowered interest rates for socialized housing and economic housing packages. Rationalized its interest rates for low-cost to high-end housing packages. Retained status quo for developer assisted, Contract-to-Sell (CTS) Loan Program but incorporated the BES.
Analyzing the Situation Committee Report
PRIVATE BANKS Introduced lower interest rates in 2012 for housing loans with 1 year to 5 years fixed rates. Current minimum loanable amount of P400,000 As of Dec 2012, banks loans outstanding for Residential amounted to P264.5 billion* *Source : BSP Supervisory Data Center
Analyzing the Situation NHMFC
Financing Needs Committee
Continued its financial rehabilitation in 2010 to 2012. Launched its “Bahay Bonds 2” in 2012
Analyzing the Situation Financing Needs Committee
BSP ď&#x192;ź Announced reduction of real estate loan portfolio ceiling to 15% from 20%
ď&#x192;ź Maintained borrowing rates
Where we come in Financing Needs Committee
• Roadmap objective by 2012 to 2016 – production of 1 million housing units Socialized – 45% Economic – 40% Low cost – 15% • Needs at least P651 billion in buyer’s financing over the period
Where we come in Financing Needs Committee
â&#x20AC;˘ Coordination with HDMF, provided feedback on Circular 310 and for enhancements of other HDMF home lending facilities. â&#x20AC;˘ Coordination with NHMFC on creation wholesale lending facility and the mortgagebacked securitization.
Where we come in Committee Report
â&#x20AC;˘ Meetings with BSP to provide complementary insights & in-depth understanding on the banking & housing industry. â&#x20AC;˘ Establish ties with bank associations, specifically the Chamber of Thrift Banks to allow close coordination in unlocking more private funds.
Making Progress Committee Report
â&#x20AC;˘ HDMF & SHDA - moving towards the final crafting of enhanced Developer Assisted Wholesale Home Lending Program. â&#x20AC;˘ NHMFC & SHDA - coordinating for the creation of a Mortgage-Backed Securitization facility and other non-traditional but proven financing programs.
Making Progress Financing Needs Committee
• BSP & SHDA - established a working framework via a quarterly coordination meeting. • Chamber of Thrift Banks & SHDA - forging cooperation to explore schemes to unlock more private funds for innovative home buyer’s financing facilities.
Where to take it next Financing Needs Committee
Housing Finance Ecosystem
Where to take it next Committee Report Buyers BSP
Banks
Developers
Housing Finance Ecosystem
HDMF
P 651 B + Guarantee Facilities
NHMFC Securitization
Mortgage Insurance
Where to take it next Financing Needs Committee
â&#x20AC;˘ HDMF to reach P60 billion per year home lending level by 2014 with sustainable & efficient home lending programs â&#x20AC;˘ NHMFC to be capable of implementing a securitization program worth P10 billion by 2014.
Where to take it next Financing Needs Committee
• Establish clear understanding of BSP’s guidelines for policy formation with regards to house financing. • Craft strategic initiatives with Chamber of Thrift Banks to institute additional industry standards.
Resolutions: Financing Needs Committee RESOLVED, FURTHER, that for Breakout Session No. 3: “Financing Needs - “End-User Financing: Exploring Options ”, for SHDA to initiate on establishing a technical working group with National Home Mortgage and Finance Corporation (NHMFC), Bangko Sentral ng Pilipinas (BSP), and Home Development Mutual Fund (HDMF), the banking sector, and other government financial institutions, to work on the following initiatives: • To set-up a sustainable and viable securitization facility to service the Housing System;
Resolutions: Financing Needs Committee • To pursue the enhancement of standards or standardization initiatives (i.e. documents and processes); • To work on establishing a buyers’/end-users mortgage insurance product;
• To enhance the credit bureau capabilities; and • Create papers/positions paper to lobby legislative measures to enhance the convenience, transparency and risk mitigation features across all concerned stakeholders/ sectors.
Legislative Committee
By: George Siy Committee Chair
Legislative Committee â&#x20AC;˘ OBJECTIVES :
ď&#x192;&#x2DC; Introduce legislative policies and laws that will: 1. Rationalize business 2. Help increase production to serve the public 3. Create sustainable development & environment
Analyzing the Situation Legislative Committee
SHDA’s PRIORITY BILLS 1. NLUA - National Land Use Act 2. RESA LAW- Amendments to RA 9646 3. UDHA - Amendments to RA 7279 4. LOCAL GOVERNMENT CODE – Amendments to RA 7160 5. DHUD - Creation of Department of Housing and Urban Development 6. OTHERS (Forestry, Anti-Squatting, Fire Code, Sprinkler, Elevators, HOA, etc.)
National Land Use Act
PRODUCTION
SETTLEMENTS
PROTECTION
INFRASTRUCTURES
I. National Land Use Act Legislative Committee
OUR ADVOCACIES: The country needs a rational National Land Use Plan URGENTLY! BUT we are also batting for: 1. Representations in the process – for Developers and relevant stakeholders 2. Process & Time frames - Practical 3. Priorities – Best Use of land vs. agriculture only 4. Penalties – Reasonable based on realistic situations & objectives
I. National Land Use Act IMPACT ON HOUSING
Legislative Committee
NLUA seeks to create a rational national physical framework plan that: 1. Prevents misuse and disasters (i.e. floods, landslides, etc.) 2. Allocates equitably the countryâ&#x20AC;&#x2122;s resources to various uses (production, protection, settlements and infrastructure) 3. Preserves our resources for sustainable development 4. Give voice to under represented sectors 5. Etc.
Amendments to RESA Law (RA 9646)
II. RESA LAW (RA9646) OUR ADVOCACIES
Committee Report
We AGREE with: 1.Regulating real estate practitioners; and 2.Raising the quality in real estate service and ethics through professionalization and accreditation 3. Creation of Jobs not reduce them.
II. RESA LAW (RA 9646) IMPACT ON HOUSING
Legislative Committee
We have concerns with the provisions that infringe on the rights of developers, owners, less educated employees, such as: Broker to Salesperson ratio Disqualification of developers to sell their properties Real estate course as pre-requisite to license Qualifications of salespersons
II. RESA LAW (RA 9646) IMPACT ON HOUSING
Legislative Committee
Real estate practitioners (i.e appraisers, assessors, consultants, brokers, salespersons, etc.) are the people on the front lines of the real estate market performing tasks and negotiating transactions on behalf of the real estate developers.
Amendments to Urban Development and Housing Act (RA 7279) Secs. 18 and 20
III. UDHA (RA7279) OUR ADVOCACIES:
Legislative Committee
ď ą The tax exemption already granted to real estate developers engaged in socialized & low-cost housing projects SHOULD BE AUTOMATICALLY APPLICABLE without the need of securing a BIR ruling, which must be expressed in RA 7279
III. UDHA (RA7279) IMPACT ON HOUSING
Legislative Committee
ď&#x192;&#x2DC; Securing BIR Ruling prior to the enjoyment of tax incentives under Sec. 20 of RA 7279 and Article 39(a) of EO 226 takes a lot of time ( some take several years) ď&#x192;&#x2DC; Securing BIR ruling causes delay in socialized housing developments and added tax costs paid which causes additional costs to developers
Amendments to Local Government Code (RA 7160)
LGU
DEVELOPERS
IV. LGC (RA7160) OUR ADVOCACIES:
Legislative Committee
ď&#x192;&#x2DC;Once a subdivision project development in an area is already zoned by the sanggunian (a legislative body) for a particular purpose, the issuance of development permit should become a function of the local executive branch.
IV. LGC (RA7160) OUR ADVOCACIES: IMPACT ON HOUSING
Legislative Committee
ď&#x192;&#x2DC;Under the LGC it is the sanggunian of municipalities and cities which approves Subdivision Plans ď&#x192;&#x2DC;Being a deliberative body whose main function is legislative in nature, approval of Subdivision Plans by the sanggunian causes delay in developments of houses.
Creation of Department of Housing and Urban Development “DHUD”
V. DHUD OUR ADVOCACIES:
Legislative Committee
Creating DHUD (not just a council): (a) Has more power and direct access to the President
(b) Can demand performance and compliance from other agencies (c) Has resources or budget (d) Focused on housing needs which will be the basis of assessing its performance (vs a sideline) (e) Have more specific expertise
V. DHUD OUR ADVOCACIES: IMPACT ON HOUSING
Committee Report
There is a need to: 1. Improve sector performance and governance; and 2. To address sector issues and challenges stemming from rapid urbanization, uncontrolled urban growth, increasing urban poverty and deteriorating services & facilities.
ACTION PLANS: Legislative Committee
More active participation in legislative process Cooperated with different housing/real estate organizations (OSHDP, CREBA, NREA, etc.) in strengthening our positions for the interest of the housing industry Submitted position papers to the legislators and other concerned agencies which obtained positive responses
ACTION PLANS: Legislative Committee
Attained representations in different government agencies’ deliberations to submit and substantiate concerns affecting the housing industry Developed strong relations with relevant government agencies
The Roadmap Revisited Economic impact
P1.0 immediate impact + P0.97 from Production Sector + P1.35 consumption-induced
Job creation multiplier
for every P-million
2.30 jobs
Value creation multiplier
For every Peso
3.32 pesos
For every multiplier peso
0.47 pesos
Household income
Tax multiplier (Indirect)
For every peso paid in taxes
3.90 pesos
TAX IMPACT ANALYSIS Presidentâ&#x20AC;&#x2122;s Report
Value Foregone taxes Net value created
Total investment
Total value (Pbn)
(Pbn)
due to multiplier effect
223.00
740
22.30
87 653
What’s Next? President’s Report
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