12. IPD-FES-Housing December 2010 (1)

8/12/2019 12. IPD-FES-Housing December 2010 (1)

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So-called Socialized Housing is not for the Poor --

Towards workable solution concepts for securing a place in the cityInstitute for Popular Democracy, 20101

Why Illegality is still the preferred mode of urban poor housing

There has always been something missing in the defensive action of urban poor groups againstdemolitions and government resettlement plans that would push them out of Metro Manila. Thesame has to be said of the urban poor's advocacy for so-called presidential proclamations thatwould cause the reservation of particular sites for socialized housing projects and theregularization of previously illegal settlements into formal housing settlements.

Legal encumbrances aside, urban poor advocates themselves are aware that financing is the keychallenge to the viability of securing a place in the city for poor people.

Assembling the financial resources for acquiring either private or government property that have

been reserved for housing purposes by the president or by local governments is often the harderpart. The ultimate source of funding for so-called socialized housing are typically the householdsthemselves the Philippine public housing program is essentially market-based approach, withsome unsystematic subsidies here and there. The market value of the land and the cost of landdevelopment or site preparation will be the binding constraint to housing poor people in the cities.On the other hand the prolem may also be seen as being an income problem rather than ahousing problem. Perhaps if incomes have not stagnated for the past three decades, then thehousing problem would not be as it is.

Thus, it is not surprising that in Quezon city, where one-fourth of the country's informalsettlements are found the preferred housing strategy is illegality. Commercial banks would not lendto people who do not have large and steady streams of incomei. As will be shown below, even thegovernment's own financing schemes do not appear to bring housing within the reach of thepoorer half of the city. The result is that less than ten percent of the urban poor in this cityparticipate in the government's housing programs. Records show that two-thirds of these people inQuezon city who managed to join the government's biggest housing finance program theCommunity Mortgage Program are in arrears or have been declared as being delinquent. Theseare in danger of being evicted from their homes.

Certainly, regulations that designate particular places as being off-limits for purposes other thansocialized housing will have a depressing effect on otherwise sky-rocketing land values in cities. But

with a very few exceptions, local governments do not follow the requirement of the UDHA(Urban Development and Housing Act) that require that socialized housing sites be designated andacquired by local governments.

It is easy to understand why local governments might not want to impose upon urban landowners for aside from the reduced property taxes that depressed land values would imply many localgovernments would also be imposing such regulations on their political allies, if not on their ownfamilies. It is also not rare for political families to have a direct interest in the business propertydevelopment. The use of government funds to locate public facilities so that they directly raise thevalue of private properties appears to be quite prevalent. One 2010 presidential candidate hasbeen charged by his colleagues in the Senate of diverting government projects so that these would

1 This paper was produced with the support of the Fredriech Ebert Stiftung, Manila Office. the different sections werethe result of several project specific consultaitons and engagements with IPD's partners in NUPCO and urban poorleaders at SRTA-North Triangle. This draft will be subject to further critique by experts, policy makers as well asurban poor leaders.


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be near properties he owns that are being developed for commercialization.

So-called socialized housing is not for the poor

In a discussion with urban poor leaders, former HGC president Gonzalo Bongolan laid out the

following assertions:

CMP programs appear to have gone beyond the reach of the urban poor because the cheapest in-city land available for CMP programs now typically costs between P6,500 and 7,500 per squaremeter. At P7,000 a 25 square meter lot would cost P175,000. That is just for the land. On theother hand the maximum amount that can be borrowed from the CMP program is P120,000. Thisis probably why the CMP program has benefitted only around 182,000 families since 1989.

Medium-rise buildings are also beyond the reach of the urban poor households. Even if land werefree the cost of a small unit would not be less that P400,000, monthly amortization would bearound P3,300 pesos per month, based on a construction cost of P13,000 to P16,000 per square

meter. The Family Incomes and Expenditures Surveys reveal that urban poor families are able topay only P200 to P500 per month.

The table below shows how families at different income-levels would spend for housing, given thatthere are other pressing needs. If the least cost CMP land and housing package is P150,000 thetable below shows that only households in the 7thup could afford to join the CMP program. Sixtypercent of the Philippine population would find the CMP program to be beyond their reach

In Quezon city it has beenestimated that only about 6percent of the 200 thousandurban poor families participate inthe government's housingprograms. Of those associationsthat are in the CMP program 60percent have past due anddelinquent accounts.

The affordability of this market-

based housing program is not theonly problem. There have alsobeen many difficultiesencountered in the enforcementof loan agreements even amongthose who can afford themonthly amortizations.

The President's promises to the urban poor


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In his covenant with the stakeholders and urban housing advocates the presidential candidateAquino said that the following goals and policies will be part of his agenda to build an inclusiveurban society.

(1) no illegal forced evictions and no evictions at all without decent relocation; (2) shift emphasis

from off-city relocation to area upgrading (on-site) and in-city resettlement through theCommunity Mortgage Program and presidential land proclamations; (3) to extend health insurancecoverage to the urban poor, put an end to (classroom) shifting in public schools, provide full set ofquality textbooks to public school children, and provide easier access to water and electricity toteh urban poor; (4) to provide the necessary funds for social housing and releasing the mandatedbudget under the Comprehensive and Integrated Shelter Financing Act (CISFA); (5) to create jobsfor the urban poor and help them avail of social security; (6) to work with local government unitsfor the full implementation of the Urban Development and Housing Act (UDHA); (7) to negotiatefor peace in Mindanao and respond to the needs of people displaced by the conflict; (8) to addressthe housing and livelihood needs of Ondoy-affected communities and look for appropriatesolutions for residents of Manggahan Floodway and Lupang Arenda; (9) the appointment of reform-

minded persons to HUDCC and other shelter agencies; (10) the participation of all stakeholders infinding solutions and that the process through which the details of the plan will be provided will beconsultative and transparent.ii

It would appear that there is at present a continuing search for operational approaches that wouldimplement the president's covenant with the urban poor. The aftermath of the clash in Quezoncity between the authorities and urban poor groups in North Triangle, at the time that presidentAquino was in the United States in September, saw the hastening of the search for solutions thatcould implement the president's agenda for the urban poor. As a result of that clash, the presidentasked other heads of government agencies (DILG, DSWD, NAPC) outside of the HUDCCgrouping to initiate dialogues with urban poor groups to prepare implementation approaches. Thenext two sections briefly narrate the official and civil society discourse on addressing the matter ofresource problem, which is the crux of the implementation challenge.

Need for new strategies : Binay

Vice President Jejomar Binay also heads the HUDCC (Housing and Urban DevelopmentCoordinating Council vaguely talks about creative capitalism as a necessary element of the solutionto housing finance. His predecessor, former vice-president Noli de Castro's main contribution tohousing finance policy has been to extend loan terms and to bring down interest rates for those

employed in the formal sector. Housing finance from the National Housing Authority under deCastro has been mainly rationed in favor of people who have had to be resettled as a result ofNorth Rail and South Rail resettlement programs. The backlog in housing has continued to rise,and even more so in the aftermath of typhoon Ondoy and Pepeng, which added 200,000households from around Laguna lake who need to be housed away from the flood-prone shores ofthe lake and from the channels emanating from it. According to Binay, the total housing need isaround 3.6 million units of which only one-third is in the form of bankable projects that the privatesector can support.

To vice-president Binay the proposal to make use of creative capitalism entails talking tosocialized housing developers in the private sector to hire prospective dwellers in house-for-work

schemesiii

. Citing carpenters, plumbers, and other poor Filipinos in the housing sector who cannotafford to buy a house of their own, Binay wants the private developers to stretch the reach ofmarket forces in order to include in the business plan those who in fact cannot buy houses. Binay


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wants to restudy loan requirements and repayment terms, saying that labor services of carpenters,plumbers and peons may be a good start for paying their housing loans.In terms of mechanisms thevice-president argues that the poor homebuyers can buy with their services, the government canpay the businessmen and the developers with tax incentives.

Months after the post-election exhuberance that led him to make these bold proposals the vice

president's main proposal at the end of 2010iv

appears to be one of going around the country toconvince mayors and governors to donate lands for socialized housing. He believes that if land isdonated by local governments then people can build houses with a loan of less than one hundredthousand pesos (affordable to the fifth decile up), instead of four hundred thousand which is thecost of a house and a lot.

Need for new strategies: NUPCO-Kilos Maralita-IPD discussions

NUPCO -- mobilizing City resources and regulations to secure the urban poor's claim

This basically refers to the rather optimistic expectation of tapping the willingness ofelected city officials to reserve five percent of the city development fund (which is 20percent of the annual internal revenue allotment from the national government) for theacquisition and development of lands for socialized housing, including those that will becreated out of the local governments' exercise of their power to expropriate private landsfor social housing purposes. While it is true that there are laws requiring local governmentsto identify areas that will be devoted to socialized housing, this is one of those legalmandates that does not identify resources that would be needed to realize its aims.

Apart from pressures by urban poor groups and communities on city governments, thenational government can probably push a national policy compelling local governments topursue their housing mandates. But because housing is actually a devolved mandate all thatthe central government can do is to act rather obliquely.

In recent months DILG secretary Jesse Robredo has issued orders for local governments tosubmit their inventory of socialized housing sites. However, there is nothing in the Urbandevelopment and Housing Act that specifies standards of adequacy and financial supportthat LGUs need to convey to the urban por housing sector. There are also no penalprovisions in the law. Together with the Secretary of Finance Secretary Robredo is alsocampaigning for local governments to impose the tax on idel lands. The finance secretary

looks at local government revenue generation as the third revenue center of the country.Secretary Robredo is also looking at the underutilized tax on idle land as a policyinstrument that could increase the supply and reduce the price of land for socializedhousing. To support these initiatives it may be necessary for the central government todefer allocation of non-mandatory grants (such as the Internal Revenue Allotment) to thoselocal governments that fail to utilize tax powers and tax bases that were handed over tothem by the Local Government Code of 1991. The last section of this paper delves moredeeply into the matter of increasing the supply and reducing the price of urban land.

Local governments as financial intermediaries

Local legislation can authorize the tapping of credit lines for making the down payment onLGU-acquired properties that would then be paid by the urban poor communities over a


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period of time. Local governments act as financial intermediaries to allow poor urbancommunities to pay for socialized housing over an extended period of time. The localgovernment takes on payment risks but does not award any subsidies. The poor urbanhouseholds basically pay for the costs of lands and buildings, except that the presumed costof lots go down once these are taken off the upscale property development market afterbeing classified as sites for socialized housing for the urban poor.

The urban poor as property developers

Medium-rise dwellings for the urban poor can apply in locations where land values are highand where, even if longtermfinancing were to be available, the costs would still beexorbitant. In such cases the lot subjectto expropriation by the local government would besmaller. This points to a third approach thatdeparts significantly from the currentapproaches being contemplated and it draws inspiration fromthe state legislation inMumbai, India. This third approach -- the "urban poor as property developers" or the urbanpoor as housing providers -- can work in both private and publicly-owned land and even in

areas where property values are high and going up rapidly. The key idea is for the urbanpoor groups and their designated property developers to stake a claim on an entireproperty that they currently occupy.

Having done that they would then build upwards in medium-rise dwellings in order toreduce the footprint of their dwellings. The space that is freed up is developed for a mixof commercial purposes and the income stream from the commercialized section of theproperty pays for the urban poor's place in the city, where the land values are really high (asin Dharavi in Mumbai) the housing for the urban poor may even be awarded for free. Onesupposes that the local government may share in the residual income after.

This approach is bound to be important in areas such as North Triangle and East Trianglethat will soon host the Quezon City Central Business District and from where 16 thousandfamilies are expected to be displaced. The North Triangle communities clashed with theauthorities and blocked Epifanio de los Santos Avenue in Septemebr 2010. North Triangleand East Triangle would be too expensive to be paid for by the city's urban poor, using themore familiar means. The San Roque Community Council North Triangle Alliance (SRCC-NTA), the organization of the urban poor in North Triangle, has been proposing a mixeduse scheme under which they will relocate to a 12 hectare lot within the site so that therest of the 37 hectares of North Triangle can be used for the Central Business Districtcommercial spaces. This research supported the elaboration of this new strategy for North

Triangle, which will be presented in a subsequent section.

Critical to the argument for this urban-poor- as-property-developers concept for NorthTriangle is the implicit argument that its proponents must make that the wealth created outof developing public lands in central locations must somehow be earmarked for the urbanpoor specifically, that part of this new wealth needs to be earmarked for the urban poorwho have been residing in North Triangle. On the day of the clash in North triangle inSeptember 2010 the head of the National Housing Authority challenged this assumption onnational television, saying that the revenues that NHA would be generating fromcommercializing the North Triangle property would serve as the fund that would increasehousing supplies (for North triangle settlers and others) in less expensive localities.

There are two necessary rebuttals to this argument against in-city and/or on-siteresettlement and regularization:


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First, as documented by ALMEC corporation (which developed a World Bank-financed feasibility study for the commercialization of North and East Triangle forQuezon City) the proposal for off-city resettlement, such as in Montalban, Rzal, canbe quite expensive. It will be significantly cheaper to relocate people far from thecity only if houses are substandrard, the new settlers compete with the locals for

access to already congested public services and if there are no income-replacingprovisions. This research has a developed an ordinance (Annex) that specifiesresettlement standards that the National Housing Authority and Quezon city willneed to finance out of the proceeds of property development. If these standardsthat implement ICESCR mandates (International Covenent on Economic Social andCultural Rights) then the cost of off-city relocation would not seem too different tocosts entailed by a combination of in-city and off-site but in-city relocation.

The second, argument should also be addressed to the urban poor organizationsthat insist on staying in the more expensive central locations near the malls and thetrain stations, instead of, say, agreeing to move to other parts of Quezon city. As the

previous sections have already shown the cost of land and housing, even in medium-rise buildings can be exhorbitant. Because there has yet been no generally applicableshift in the market-based philosophy of urban poor housing in the country it will bedifficult to justify special treatment for those who would stay in the MRB's of northtriangle. At best, what is already part of the practice (Marikina and Taguigexperiences, see ALMEC) is that land can be granted on a usufruct or low-cost leasebasis for housing purposes. But by definition, such leases and usufructs must alsoexpire. We have also seen from previous sections that medium-rise buildings tend tobe expensive and more costly that what the poor can afford, despite their economyin the use of land. This being the case, the poor who will stay in North Triangle willpossess but will most likely not acquire ultimate ownership of North Triangle lotson which their MRBs (medium-rise buildings) will be built. They may stretch thelimit of what they can manage to pay on a monthly basis and will probably only ownshares in a public housing company on top of the right to live housing units in NorthTriangle, but those shares in the public housing company will, again, proably not beenough to acquire full ownership of the units.

Such an accounting of public subsidies and private contributions is perhaps thefairest possible arrangement with those who will stay on-site being able to encashtheir accumulated shares at a later time. In effect, what is being purchased is theclaim to a specific matrix of conveniences within the city (at the heart of North

Triangle) and proximity to opportunities and public services, including ground-levelbusinesses. This bring us closer to that idea that it is perhaps not the right tohousing that is being secured, but the right to the city. This perspective is alsoconsistent with the refusal of people to be located in places far from the city, evenwhen the houses there might appear more adequate than those in urban slums.

Next level housing

As in the previous option, next-level or second floor rental housing (incrementaldensification of settlements) recognizes the scarcity and high cost of urban land. However,

this option is also cognizant of the fact that most medium-rise housing initiatives of thegovernment to date have ended up as commercial failuresv. Deeper study is needed toidentify the causes of financial failure, but what this approach suggests is for the urban poor


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to build upwards at a pace and with associated costs that are of their own choosing.Houses can reach up to the second or third floor. The upper floors can be used as units fornatural family splitters siblings setting up their own households, or they can be rentalunits for people working in cities who might otherwise have to travel long distanceseveryday (students and salesladies for instance), or the family relocates to the upper floorsand make the ground floor available for commercial renters.

Next-level incremental housing will mean either that there will be more adults or familiespaying for the same piece of expensive urban land, or that there will be income streamsfrom rentals that can supplement family incomes of the intermittently employed urban poor.In contrast to high-rise or medium rise housing, the next-level housing option addresses thefinancial viability of the urban poor households' continuing stay in the city withoutdemanding too much by way of government subsidies.

In CMP areas, the active promotion of urban settlement densification through next-levelhousing will increase the financial viability of the CMP program itself and will increase theurban poors' interest in shifting towards formality. The estimate is that a grace period of

two to three years before a CMP lot is amortize will allow a family to generate enoughincome to offset the cost of building the second floor. Organizational, legal and financialinnovations are needed to convey such income streams to the investors or creditors whofinanced the second floor. But there are already working models that address these issues.

Barangay Luz in Cebu: Next-level housing proof of concept

Barangay Luz in Cebu city features a multi-purpose cooperative located in the city center, nearsome of the biggest commercial establishments. The lot in barangay Luz was acquired thru theCMP as well as a local government financing scheme. But just as in the experience of themajority of CMP beneficiaries in Quezon city, many of the Barangay Luz residents were having

trouble making the monthly payments on the lots. The cooperative went into differentbusinesses, including water supply and electricity distribution. Waste segregation continues tobe a big source of savings generation for the cooperative's members.

However, the most important innovation of the cooperative is their second-floor housingbusiness. In this business, the cooperative negotiates for a credit line with the Peace and EquityFoundaiton thru its Visayas subsidiary. The cooperative screens members' eligibility to loansthat would finance second-floor housing improvements thru the requirement that membersshould have already paid-up their subscribed capital of P10,000 per household. The cooperativehas been able to lend up to P70,000 to households. because of the brisk housing rentalbusiness for students and temporary workers it is common for the loan spent for building therooms on the second floor to be completely paid within two years. Sweat equity is also part of

the financing scheme. Procurement and property management is done by the cooperative fortwo years.

Until that time when the loans have been fully paid the income from the room rentals are paiddirectly to the cooperative and the cooperative also holds on to the keys. The cooperative alsosupplies the water and power to these rental units. If the cooperative's cash flow is healthy, ahousehold may negotiate to earn some of the incomes before full payment has been made. Thiswill be in exchange for a postponement of the hand-over of the key and of the incomes fromthe cooperative.

The next section narrates the detailed proposal for in-city housing inNorth Triangle. Thisproposal is consistent with both idea of next-level housing as well as the idea of letting theurban poor-as-property developers. It is only because of the rarity of the practice of cross-


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subsidizing urban poor housing costs using incomes from the development of freed-up landthat it does not seem quite straigtforward to award some of those incomes to the poor.The more general case ought to be one where the rise in property values (i.e., theoutcome of property development) is routinely taxed by local authorities and used forincreasing the supply of land that are serviced with drainage, electricity, water, healthcenters, schools and parks. The legal instrument for taxing unearned income arising from

rising property values brought about by public projects is available in the Philippines (annex2). One might also think of the 20 percent balanced housing requirement (annex 3) as a taxwherein new subdivision dwellers that increase the demand on urban infrastructure thatmust continually be financed is obtained by the local government to cross-subsidizesocialized housing.

Bringing it all together in North Triangle

This study supports the main elements of the proposal of the San Roque Community Council North

Triangle Alliance (SRCC-NTA) for on-site housing development of areas in North and East Trianglecurrently used as housing settlements by residents with yet informal status. On-site housing for the informalsettlers is an important economic and social component of the planned Quezon City Central BusinessDistrict, which will cover the North Triangle and East Triangle areas.

For the presentation purposes, the section focuses on North Triangle. However, the study applies as well toEast Triangle, where associations of settlers have also adopted a vision of on-site housing development.

North and East Triangle in Quezon City are sites of contention between poor urban informal residentsdefending a place in the city and planners for exclusive commercial use. Residents argue that under a policyof mixed and non-exclusive land use in North and East Triangle, lands can be freed for commercial usesunder the Central Business District without the socially costly eviction and off-site relocation of residents

that removes them from their sources of livelihood.

The proposal has the following major features:

1. The allocation of land parcels out of the 37-hectare area currently occupied by residents. In NorthTriangle, a land parcel of between 12 to 15 hectares can be carved out of the existing settled area torelocate the households. The government will make the land parcel available under a usufructagreement with a legal entity representing the residents.

2. The allocated area will be used for 5-floor medium rise buildings (MRB) that accommodate dwellingunits at the upper floors and service and business units at the ground floor. Each building will have

provisions for further upwards expansion to more than five (5) floors. A total of 167 MRBs is needed toaccommodate 8,000 households that are expected to participate in the redevelopment program.

3. At the pre-implementation phase of the on-site MRB housing project, residents through their respectivecommunity organizations will engage in savings mobilization to enable each beneficiary household toshare their equity contribution in the form of labor to the housing project. Labor equity will be for theconstruction of the MRBs and the required public works. The labor equity per beneficiary family isestimated at one-fourth the total value of each dwelling unit.

4. The residents will re-organize themselves into appropriate structures for the governance andmanagement of each MRB. This proposal calls for the formation of a building or housing cooperative foreach MRB, for each cluster of MRBs, or for all MRBs. In any case, the cooperative set-up entails a dual

ownership system: each building or cluster of buildings or all buildings will be owned by the cooperativecomposed of the dwellers. At the same, each dweller will be the owner of their respective dwelling unit.


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5. Commercial spaces at the ground floor of each MRB will be governed by the building or housingcooperative as well. Since the cost of the commercial spaces will be included in the amortization of theentire building by the dwellers, the dwellers themselves as owners will have the rights to the income ofthe commercial spaces. This principle applies as well to utilities serving the dwelling units as much aspossible, including water.

6. A building federation will be established, composed of all the MRB co-ops for continuing technicalsupport to all MRB co-ops and to realize scale and scope for certain economic activities, such as water,electricity, and the commercialization of ground floor spaces for small businesses.

The proposal for on-site housing provision through MRBs in north and East Triangle are based on thefollowing principles.

1. On-site development is more economic than other options. It is less costly for the government and theresidents to undertake housing provision on-site in North Triangle and East Triangle rather than torelocate the residents elsewhere.

2. On-site development is more consistent with the principles of participation and equity. It is the option

of choice of most residents of North and East Triangle. Current residents and citizens must be involvedin the planning of the CBD and of the housing site.

3. On-site development brings more sustained benefits arising from the diversity and mixture of economicand social uses. The Central Business District and Quezon City as a whole will benefit economicallyfrom the presence of a large community composed of diverse occupational skills. A policy of mixed useis supportive of economic sustainability.

4. On-site development promotes social inclusion and solidarity. It creates conditions conducive tointensive economic cooperation among the MRB residents. In the context of the Central BusinessDistrict Project, it will also create conditions for economic synergy between the high-end and low-endestablishments. It is an important component in achieving social inclusion and cohesion in the city.

Figure 1

Physical Aspects of the On-Site Plan

The settled area in North Triangle, shown in the satellite photograph (Figure 1) is around 37 hectares.Under the proposal, the residents will move to a site of between 12 to 15 hectares within the existing site.This would be the land required for constructing 167 MRBs, each of which will accommodate 48


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households, or 12 household per floor, to benefit an estimated 8,000 families in North Triangle (Table 1).

Table 1

Total number of beneficiary households 8,000

Number of dwelling units per floor 12

Number of floors for dwelling units 4

Number of dwelling units per MRB 48

Number of MRBs required 167

Number of rows of dwelling units per floor 2

Width dimension per dwelling unit (m) 6.40

Length dimension per dwelling unit (m) 6.40

Floor size per dwelling unit (sqm) 40.96

Width per MRB, with 3-m corridor (m ) 15.80

Length per MRB, with 3-m corridor (m) 41.40

Area covered by open spaces and corridors (sqm) 171.60

Ground size per MRB (sqm) 654.12

Total lot size for all MRBs (sqm) 109,020.00

Allotment (30%) for open space including streets (sqm) 32,706.00

Total area required for on-site housing (sqm) 141,726.00Total area required for on-site housing (ha) 14.17

Total area required for on-site housing, with allowance (ha) 14.2

The land requirement would be 14.2 hectares if the dwelling units were to measure 41 square meters each.Each MRB floor will be composed of two rows of dwelling units and a 3-meter corridor, for a size of 654.12sqm. per floor. The total footprint of the 167 MRBs would be 109,020 sqm. Provision for streets and openspaces is computed at 32,706 sqm. or 30% of the total lot size occupied by all MRBs.

The total land requirement of 14.2 hectares may be either contiguous or interspersed with land parcelsdesignated for other uses. A policy of mixed land use of the North and East Triangle areas must implymixture of both high-end and low-end commercial and residential uses to promote social and economic

diversity as an essential feature to the growth and competitiveness of Quezon City.


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Figure 2

Figure 2 (not to scale) shows a cluster of 36 MRBs around the intersections of three main streets. For the167 MRBs under the plan, there would be five clusters like this. The MRB site layout aims to maximize theaccess of dwellers to the streets within the housing project and to the rest of the CBD area, therebyensuring their integration into the mainstream of social and economic life of the city.

Costs and Financing Aspects

Construction cost per dwelling unit can vary between P300,000 to P400,000. In this study, the assumedconstruction cost per dwelling unit is P320,000, or a total of P17.28 million for 48 housing units (Table 1).

The cost for common areas is estimated at 20%, or P3.456 million. This means an adjusted cost of P432,000per dwelling unit.

However, the cost can be mitigated by the labor equity of each family, estimated to be at one fourth of thecost per dwelling unit, or P108,000 per dwelling unit. This means a net cost of P324,000 per dwelling unitper family with labor contributions.

This also means that a beneficiary household would have to contribute almost 22 days of labor per monthover a year. Labor contribution valued at this amount is a realistic scenario, given the surplus of labor in thesettlement. During the implementation or construction phase of the MRB housing project, other membersof the family will continue to work elsewhere for the familys support. Savings mobilized during the pre-implementation period will further enable each family to contribute their labor shares. Moreover, the labor

requirement from beneficiaries can be further mitigated by other sectors of society through Gawad Kalinga-type of voluntary contributions of labor.


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Table 2

Cost per dwelling unit (P) 360,000.00

Total cost for 48 dwelling units (P) 17,280,000.00

Additional cost (20%) for common areas (P) 3,456,000.00

Total cost per MRB (P) 20,736,000.00

Adjusted cost per dwelling unit (P) 432,000.00

Value of labor contribution per dwelling unit (P) 108,000.00

Net cost per dwelling unit (P) 324,000.00

Value of land (P/ha) 300,000,000.00

Value of land (P/sqm) 30,000.00

Total value of land for on-site housing, incl. open space (P) 4,251,780,000.00

Total value of lots for MRBs, excl. open space (P) 3,270,600,000.00

Share in land value per dwelling unit (P) 408,825.00

Total value per dwelling unit, incl. land and building costs (P) 732,825.00

Total value per MRB, incl. land and building costs (P) 35,175,600.00

Total value for all MRB, incl. land and building costs (P) 5,862,600,000.00

Less: Value of lots for MRBs by usufruct (P) 3,270,600,000.00

Net total cost of all MRBs (P) 2,592,000,000.00Net cost of dwelling unit per beneficiary (P) 324,000.00

The rising cost of land per hectare in North Triangle is often used as an argument why the residents have toresettle off-site or off-city. However, it can also be used as an argument why allocating a piece of land foron-site housing development is viable and affordable by the government. At P30,000 per square meter, lotsoccupied by the MRBs would cost over P3.72 billion, net of the cost of land devoted to streets and openareas. The remaining 22.8 hectares (out of the original 37 hectares currently used by the residents) wouldgenerate more than P6.85 billion from commercial disposition for the government. The expected revenuemore than compensates for the foregone revenue from the land allocated for on-site socialized housing.

However, including the cost of land will more than double the cost per dwelling unit and bring the

amortization amount per month beyond the affordability of the beneficiaries. P3.72 billion translate intoP408,825 per dwelling unit. This can be addressed by a usufruct agreement between the government andthe beneficiaries, under which the land remains under public ownership but leased over a long term (50years) at zero rates.

Without the cost of land, the financing requirement would be P324,000 per dwelling unit. The lowestinterest rate for available government financing is 6% per annum. This means that if the repayment period is25 years, the future amount for each dwelling unit is P810,000. This presupposes a simple interest methodand equal installment per month of the loan principal. The resulting total payment per beneficiary familywould then be P2,700.

However, the average affordability of families living in North Triangle is P1,000 per month or an affordable

future amount of P300,000 in 25 years. Against the required financing of P324,000, this means an affordablenegative interest rate of 0.3%. A solution will be to extend the repayment period to 30 years, resulting in anaffordable future amount of P360,000 and an affordable interest rate of positive 0.45%. Against the lowestavailable rate of 6% per annum, this will still be a highly subsidized rate. At the same time, this subsidy is acost that Quezon City can still afford.

Table 3

Financing requirement per dwelling unit (P) 324,000.00

Amortization period (years) 30

Grace period (years) 5

Repayment of loan principal per year (P) 12,960.00

Repayment of loan principal per month (P) 1,080.00Interest amount at 6% per year (P) 19,440.00

Interest amount per month (P) 1,620.00

Amortization of principal and interest per month (P) 2,700.00


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Future amount (P) 810,000.00

Table 4

Total area settled (ha.) 37.0

Total allocated for MRB housing (ha.) 14.2

Proportion of MRB allocation to original area (%) 38.3

Net area for commercial use (ha) 22.8

Total expected proceeds from commercial disposition (P) 6,848,220,000

Table 5

Affordable payment per month (P) 1,000.00

Affordable future amount (P) 300,000.00

Affordable interest rate (%) -0.30

Mixed and Diverse Economic Uses of the MRBs

To mitigate subsidy costs for the financing of the housing project, and to enable beneficiaries to afford thenormal future amount, the entire on-site housing area must be a place of intensive economic activity that

creates diverse opportunities for livelihoods and jobs. Each MRB would be a facility of mixed use, with thesecond to fifth floors allotted for dwelling units and the ground floor for commercial activities and services.From the total floor area of 654.12 sqm., 30% can be allocated for open spaces and corridors, leaving 457.88sqm. for shop units for different activities.

This means that a ground floor shop of more than nine (9) sqm. each can be assigned to each of the 48beneficiary families residing in each MRB. The 48 shop units can accommodate a variety of activities. Toidentify a few, such activities may include industry workshops, machine shops, repair shops, eateries,bakeshops, barber shops, parlors, computer shops, appliance repair shops, cottage industry workshops,pawnshops, sari-sari stores, day care, and many others.

These commercial establishments will constitute the low-end of the Central Business District, thereby

making the CBD a non-exclusivist portal for a broader range of economic activities. Employees and workersof the high-end establishments that will soon locate at the CBD will greatly benefit from low cost serviceslocated at the ground floor of each MRB. The high-end establishments will find it also beneficial tooutsource some of their requirements to the low-cost businesses located at the MRBs.


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Table 6

Width per MRB, with 3-m corridor (m) 15.80

Length per MRB, with 3-m corridor (m) 41.40

Ground floor size per MRB (sqm) 654.12

Less: 30% for open spaces and corridors (sqm) 196.24

Floor space available for shops (sqm) 457.88

Average floor size of shops at ground level (sqm) 9.54

Number of shops at ground floor 48

As a major effort in poverty reduction in Quezon City, it makes good sense to first position the poorinformal residents to take advantage of the incoming demand for labor and services from both thecommercial developers and the public infrastructure projects under the CBD project. Developing the on-site MRB housing projects ahead of other developments will put the residents in a better position to meettheir amortization obligations and become major stakeholders of the CBD project.

There are alternative options for assigning ownership or user rights of the ground floor business spaces tothe households. One is to assign ownership of a shop unit to each household. Each owner will be allowed to

make use of the shop unit for any form of economic activity, within certain regulatory limits. One of theallowable uses will be for each owner to lease the unit to any operator, even to non-dwellers of the MRB.

Another option is to assign user rights to the building or housing cooperative for each MRB. Thecooperative can then make the spaces available for a rental fee to any commercial operator, includingfamilies dwelling within the MRB. This way, the co-op can consolidate the shops to accommodate largereconomic activities or larger commercial renters. The co-op will then use the proceeds to compensate eachfamily at a fixed rate and pool the surplus to the co-ops common funds, one of which will be for coveringthe obligations of households that default in their amortization payments.

Both arrangements are consistent with the principle of equity, since each household would be amortizingthe adjusted cost of each dwelling unit that includes the cost of common areas. Both arrangement are also

consistent with the statutory definition of a housing cooperative, under which the entire housing or buildingfacility is owned by the cooperative association in which each dwelling family holds shares, and each dwellingfamily own rights to each dwelling unit.

Organization, Governance and Management

Ensuring the success of the on-site MRB housing project in the context of the CBD project requires themaximum participation and mobilization of the current residents. The SRCC-NTA, with the support fromthe NGO community and international humanitarian organizations, can contribute in a major way inensuring the organization of the residents towards this end. SRCC-NTA is an alliance of 16 communityassociations (household groupings at neighborhood level) comprising 3,000 families residing in NorthTriangle. In East Triangle, community organizing is undertaken by the Claret Urban Poor Apostolate (CUPA),

which has managed to assist the formation of a federation of community associations called the Pinag-isangSamahan ng Maralita (PASAMA). The community organizing experiences of these groups can be used todevelop and establish the appropriate social and economic organizations to govern and manage the housingsite with the support of the city government.

A POSTSCRIPT: Expanding the City

The limited supply of serviced land can also be seen as an even more fundamental problem. If there

is serviced land that is near or within the city then incremental housing (a la Barangay Luz) wouldbe possible. This insight was articulated by Hardoy and Satterthwaite's (1989:113) insight thatthere is no 'housing gap' but rather a dearth of suitable and affordable land for self-help housing is


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meanwhile accepted among experts and officials who agree that urban land is the 'essentialingredient' (Murphy 1993:42).

In Latin America Smolkaviand Fernanda Furtada demonstrate that this is also the reason for thehigh cost of land.

Smolka goes further, he argues that the way forward then is for there to be an increase in theamount of serviced land. This proposal finds implementation not only in Latin America but also inan example documented by Bernervii. Essentially Berner argues that all that the government has todo is to establish the most basic amenity of having a road, electricity and water. He cites anexample where the poor select themselves into this program when they are asked to set up campin the area while they build their homes in an incremental fashion. Berner lauds the CMP programin the Philippines as a model, in the sense that the improvements to the site, and to the housingstructures happens over time.

Smolka asks how the financing for increasing the supply of serviced lands is to come about. He

answers this question by saying that the financing must come from taking the unearned incomeof the rich that increases whenever there are public works. Smolka is very critical of theregularization movement, such as the one supported by UNHABITAT because land is expensive,people will still be eased out in a process of gentrification because they will not be able to afforthe monthly mortgages anyway.

In terms of tools we already find these tools for taxing unearned incomes in Taguig and Marikina,in the special levy and in a prospective approach that, as in the BLISSS concept, would socialize theincrease in potential income streams from lands granted as usufruct to the urban poor or theirassociation or corporation. This is actually part of the BLISS concept, but it was neverimplemented.

Incremental housing improvements are critical because we know that this is actually how housingimprovements have happened. By itself, this is bound to be an extremely slow process that isdependent on the presence of a splitter in the family or as a result of life-cycle relatedimprovements in the welfare of urban households.

The post-Ondoy plans saw the emergence of proposals -- e.g., from the MMDA and fom theWorld Bank for medium-rise buildings this is quite ill-informed. Vice president Jejomar Binaydemonstrates more sense when he said that incomes need to be improved so that people canaffor the housing projects.

The CDA director, Toby Monsod and the PIDs have proposed the idea of rental housing TheCDA director brings this farther, with the possibility that there will be rights to dwelling, ratherthan ownership of dwellings. One supposes that this is based on two realizations i) first, that theurban poor cooperatives can be property developers ii) second, that there would be long-termcapital that can be mobilized on the strength of the business models (e.g., local densification andcommercialization of freed-up space) so that the urban poor can live in the city on the basis oftheir monthly payments, which will be a combnation of rentals and capital build-up in thecooperatives or in public corporations.

It should be possible for the urban poor to capitalize the rights that they possess. In Pakistan,

(siddique) it would seem that those who would be evicted would be given shares in a companythat would build MRBs this kind of right needs to be articulated and capitalized by those who arebeing removed from places like North triangle. The shares would of course be tradable. And


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beneficiaries who cannot afford the additional costs of ultimately owning property in the area havethe option of subsequently cashing in and selling shares to the more affluent urban poor families.


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Annex A Resettlement Standards Ordinance

Republic of the PhilippinesSANGGUNIANG BAYAN

Municipality of ______________________Proposed Ordinance No. _______Series of 2011

AN ORDINANCE ESTABLISHING MINIMUM REQUIREMENTS ON RELOCATIONSITES IN THE MUNICIPALITY OF _____________________ AND PROVIDING

MECHANISMS TO ENSURE THEREOF

WHEREAS, Article 11(1) of the International Covenant on Social, Economic and Cultural Rights(ICESCR), mandates that the States Parties to the present Covenant recognize the right of everyone to anadequate standard of living for himself and his family, including adequate food, clothing and housing, and tothe continuous improvement of living conditions. The States Parties will take appropriate steps to ensurethe realization of this right, recognizing to this effect the essential importance of international co-operation

based on free consent.;

WHEREAS,the Commission on Economic, Social and Cultural Rights in its General Comment Number 4(8) enumerated the requisites for adequate housing as follows:

(a) Legal security of tenure. Tenure takes a variety of forms, including rental (public and private)accommodation, cooperative housing, lease, owner-occupation, emergency housing and informal settlements,including occupation of land or property. Notwithstanding the type of tenure, all persons should possess adegree of security of tenure which guarantees legal protection against forced eviction, harassment and otherthreats. States parties should consequently take immediate measures aimed at conferring legal security oftenure upon those persons and households currently lacking such protection, in genuine consultation withaffected persons and groups;(b)Availability of services, materials, facilities and infrastructure. An adequate house

must contain certain facilities essential for health, security, comfort and nutrition. All beneficiaries of theright to adequate housing should have sustainable access to natural and common resources, safe drinkingwater, energy for cooking, heating and lighting, sanitation and washing facilities, means of food storage, refusedisposal, site drainage and emergency services;

(c)Affordability.Personal or household financial costs associated with housing should be at such a level thatthe attainment and satisfaction of other basic needs are not threatened or compromised. Steps should betaken by States parties to ensure that the percentage of housing-related costs is, in general, commensuratewith income levels. States parties should establish housing subsidies for those unable to obtain affordablehousing, as well as forms and levels of housing finance which adequately reflect housing needs. In accordancewith the principle of affordability, tenants should be protected by appropriate means against unreasonablerent levels or rent increases. In societies where natural materials constitute the chief sources of buildingmaterials for housing, steps should be taken by States parties to ensure the availability of such materials;(d)Habitability.Adequate housing must be habitable, in terms of providing the inhabitants with adequate spaceand protecting them from cold, damp, heat, rain, wind or other threats to health, structural hazards, anddisease vectors. The physical safety of occupants must be guaranteed as well. The Committee encouragesStates parties to comprehensively apply the Health Principles of Housing prepared by WHO which viewhousing as the environmental factor most frequently associated with conditions for disease inepidemiological analyses; i.e. inadequate and deficient housing and living conditions are invariably associatedwith higher mortality and morbidity rates;(e) Accessibility.Adequate housing must be accessible to thoseentitled to it. Disadvantaged groups must be accorded full and sustainable access to adequate housingresources. Thus, such disadvantaged groups as the elderly, children, the physically disabled, the terminally ill,HIV-positive individuals, persons with persistent medical problems, the mentally ill, victims of natural

disasters, people living in disaster-prone areas and other groups should be ensured some degree of priorityconsideration in the housing sphere. Both housing law and policy should take fully into account the specialhousing needs of these groups. Within many States parties increasing access to land by landless orimpoverished segments of the society should constitute a central policy goal. Discernible governmental


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obligations need to be developed aiming to substantiate the right of all to a secure place to live in peace anddignity, including access to land as an entitlement;(f) Location.Adequate housing must be in a location whichallows access to employment options, health-care services, schools, child-care centres and other socialfacilities. This is true both in large cities and in rural areas where the temporal and financial costs of gettingto and from the place of work can place excessive demands upon the budgets of poor households. Similarly,housing should not be built on polluted sites nor in immediate proximity to pollution sources that threatenthe right to health of the inhabitants;(g) Cultural adequacy.The way housing is constructed, the building

materials used and the policies supporting these must appropriately enable the expression of culturalidentity and diversity of housing. Activities geared towards development or modernization in the housingsphere should ensure that the cultural dimensions of housing are not sacrificed, and that, inter alia, moderntechnological facilities, as appropriate are also ensured;

WHEREAS,the Philippine Government is a signatory to the ICESCR thus is legally and duty-bound toenforce the provisions of the covenant in the country;

WHEREAS,it is the declared policy of the State to promote a just and dynamic social order that willensure the prosperity and independence of the nation and free the people from poverty through policiesthat provide adequate social services, promote full employment, a rising standard of living, and an improvedquality of life for all;

WHEREAS, the 1987 Philippine Constitution mandates that the State to undertake a continuingprogram of urban land reform and housing which will make available, at affordable cost, decent housing andbasic services to underprivileged and homeless citizens in urban centers and resettlement areas.

WHEREAS,Section 9, Article XIII of the 1987 Constitution declares that the State shall, by law, and forthe common good, undertake, in cooperation with the private sector, a continuing program of urban landreform and decent housing which will make available at affordable cost decent housing and basic services tounderprivileged and homeless citizens in urban centers and resettlement areas;

WHEREAS, Section 16 of Republic Act No. 7160, otherwise known as the Local Government Code of

1991, empowers local government units to enact and implement measures for the general well-being oftheir inhabitants, particularly to provide opportunity for the homeless and the underprivileged to own anddevelop their own houses and to assist them in achieving economic prosperity, life comfort and socialconvenience;

WHEREAS, the General Welfare Clause of the Local Government Code, R.A 7160, is aimed ataccelerating economic development and upgrading the quality of life of the people through local governance;

WHEREAS, the Local Government Code provides the legal framework and process for the attainment ofnational and state policies within the capacity of local autonomous political subdivisions in provinces, citiesand municipalities;

WHEREAS, the relocation of informal settlers from Metro Manila to the Municipality of_______________ have caused adverse consequences not only to the relocatees and also to the residentsof the Municipality. Congestion on income opportunity and available basic services due to the relocation hasstrong manifestations;

WHEREAS,the Municipality of __________ is committed to ensure the welfare of its residents throughprogressive legislation in securing shelter and the delivery of basic services;

NOW THEREFORE, BE IT ORDAINED AS IT IS HEREBY ORDAINED, by the SangguniangBayan, in session duly assembled, that:

SECTION 1. Declaration of Policy.

The Municipality of _________________ joins the Philippine Government in promoting, protecting andfulfilling the Rights enshrined in the ICESCR. While there are existing laws enacted for the dispensation of


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adequate housing for the people, there is still a wide gap in the realization of the ICESCR mandate. Existingrelocation activities proved to be regressive to the relocatees and the people of _______________. Thecongestion to income opportunities and to the available basic services has caused unacceptabledeterioration of the economic, social and cultural well-being of affected people. Thus is a violation of thecovenant and worse, is pushing families both of the relocatees and receiving municipality deeper in poverty.

It is the primary duty of the Municipal Government of _____________________ to fill-in the gaps of

existing laws and practice by enacting local ordinances to protect its existing citizens and its futureconstituencies. The Municipal Government of _________________ adopts a policy of progressiverealization of rights in adequate housing by enacting laws which would provide mechanisms that wouldguarantee that activities with regard to housing are beneficial to both citizens of ________________ andthe relocatees, the future citizens.

SECTION 2. Minimum Standards and Requirements of Relocation Sites.

2.1 Location and Housing

a. Relocation site should be in a location where it is not prone to natural disasters.

a.1 Clearance from the Mines and Geosciences Bureau (MGB-DENR)a.2 Clearance from the Philippine Institute of Volcanology and Seismology (PHIVOLCS)a.3 Compliance with all the requirements of B.P.220

b. Relocation site should have substantial site development.

b.1 Compliance with all the requirement of B.P.220

c. Housing structure should be safe, habitable and addresses future housing need.c.1 Compliance with all the requirements of B.P.220c.2 Structure Design and materials that provides 2ndfloor option

c.3d. Relocation project should consider the housing need of the Municipality of _________.d.1 Allocation of 20% of the total housing units in the relocation site to the informal settlers of theMunicipality of ________________________.

2.2 Education

2.3 Health

2.4 Electricity

2.5 Water

2.6 Employment

2.7 Transportation

2.8 Peace and Order

2.9 Social Infrastructure and Integration

3.0 Other Requirements

3.1 Proof that the sending city/municipality has no available land for resettlement of the affected families.

3.1.1 Land Inventory of sending city/municipality certified by the municipal/city council.


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SECTION 3. Requirements, Roles, Functions and Responsibilities.

3.1 The Municipality of ________________

SECTION 4. Rules and Regulations.

SECTION 5. Funding and Disbursements.

SECTION 6. Repealing Clause.

SECTION 7. Separability Clause.

SECTION 8. Supplementary Clause.

SECTION 9. Penal Clause.

SECTION 10. Effectivity Clause.

____________________________Author

____________________________ ___________________________

Co-Author Co-Author


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Annex B Sample Ordinance on Ensuring Developers Compliance with Balancedhousing requirement of UDHA (from Cebu Province)

Resolutions and Ordinances8TH SB ORDINANCE NO.2007-04 -- JOINT VENTURE SOCIALIZED HOUSING

Monday, January 01, 2007ORDINANCE NO. 2007 04

Introduced by: Hon. Francisco C. Comendador IIIAN ORDINANCE PROVIDING FOR THE GUIDELINES COVERING THE JOINT VENTURESOCIALIZED HOUSING PROJECT BETWEEN THE LOCAL GOVERNMENT OF LILO-AN ANDSUBDIVISION DEVELOPERS IN THE MUNICIPALITY AND FOR OTHER PURPOSES.

WHEREAS, the provisions of Article III, Section 6 and Article V, Section 18 (Balanced HousingDevelopment) of the Republic Act No. 7279, otherwise known as the Urban Development and Housing Actof 1992 (UDHA), residential subdivisions are subjected to 20% Socialized Housing requirement.

WHEREAS, the socialized housing project equivalent to twenty percent (20%) of the total subdivisionarea or project cost may be also complied through a Joint-Venture Projects with the LGU of Lilo-an,whereby the Developer may enter into a joint project or agreement with the LGU of Lilo-an to develop asocialized housing project equivalent to 20% of the project area or 20% of the cost of the main subdivisionproject.

WHEREAS, under such scheme, the developer shall abide by the implementing guidelines on the joint-venture programs of the LGU of Lilo-an, which shall in turn certify the developers compliance to the 20%requirement; NOW THEREFORE: On motion of Hon. Jesse Dem P. Bantilan, duly seconded by Hon.Ferdinand C. Jumapao, the Sangguniang Bayan BE IT ORDAINED by the Sangguniang Bayan of Lilo-an insession assembled that:

SECTION 1. DEFINITION OF TERMS For the purpose of these guidelines, the terms and words usedherein shall, unless the context indicates otherwise, mean or be understood as follows:

LGU Local Government Unit of Lilo-an

MPDO Municipal Planning Development Office

MEO Municipal Engineers Office

DEVELOPER as defined under PD 957

IRR OF SECTION 18 OF RA 7279 Implementing Rules and Regulation to govern Section 18 of RepublicAct No. 7279, otherwise known as the Urban Development and Housing Act of 1992.

PROJECT AREA 1) for subdivision projects without housing component, the gross developed land area; 2)for subdivision projects with housing component, the gross developed land area and aggregate floor area ofall housing units.

SHP Socialized Housing Project/Program.

SOCIALIZED HOUSING in addition to the definition of UDHA (RA 7279), it shall refer to projectsintended for the underprivileged and homeless wherein the housing package selling price is within thelowest interest rate under the Unified Home Lending Program (UHLP) or any equivalent housing programof the Government, the private sector or non-government organization.SUBDIVISION PROJECT as defined in PD 957.


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MAIN SUBDIVISION PROJECT shall refer to the proposed residential subdivision under BP 220 or PD957 that shall be the basis for computing the 20% requirement for socialized housing.

OFFSITE SOCIALIZED HOUSING PROJECT Shall mean any new, large-scale development, consisting ofone or several subdivision projects planned to provide socialized housing with the provision of utilities andfacilities.

SECTION 2. COVERAGE These guidelines shall apply to residential subdivision and/or proposedexpansion of existing residential subdivision in the Municipality of Lilo-an that may opt to enter into a joint-venture project with the LGU as a manner of compliance with 20% requirement for socialized housingunder Section 3, Paragraph (d)(4) of the IRR of Section 18 of RA 7279.

SECTION 3. 20% SOCIALIZED HOUSING REQUIREMENT The 20% Socialized Housing Requirementshall be based on the IRR to govern Section 18 of Republic Act No. 7279 otherwise known as the UrbanDevelopment and Housing Act of 1992.

SECTION 4. DEVELOPMENT PERMIT OF MAIN SUBDIVISION PROJECT No Development Permitapplication covered under Section 2 of this Ordinance shall be accepted unless the LGU through the MPDOand MEO evaluates to the compliance of the 20% Socialized Housing requirement these guidelines. \

SECTION 5. JOINT-VENTURE AGREEMENT The developers of residential subdivision and/or proposedexpansion of existing residential subdivisions that opt to enter in a joint venture project under theseguidelines shall submit their letter of intent for that purpose.Responsibilities of a Developer under these guidelines:

Fund the development of the area of SHP equivalent to the 20% Socialized Housing requirement. The fundshall not be less than the development cost as mentioned in Section 6 and shall be conformed to by MPDO.

Responsibilities of the Local Government Unit of Lilo-an:

It shall be responsible of the land acquisition for the SHP.

Through the MPDO, it shall determine the area and prepare the plan indicating the development plan andlocation of the SHP that is covered under the agreement.

It shall credit the subject area to the developer as part of its 20% Socialized Hosing Compliance, and shallnot assign nor credit the subject area to any other developers.

It shall use properly the fund received from the developer as mentioned in Section 7 of theseguidelines for the development of Socialized Housing Project. The Sangguniang Bayan of Lilo-an shall

authorized the Municipal Mayor to enter into a SHP Joint- Venture Agreement with the developer that hascomplied with the provision of this Ordinance.

SECTION 6. DEVELOPMENT COST The development cost shall include the cost of land preparation ofthe new off-site SHP and the establishment of its utilities like power, water, roads, drainage and sewerage.The total development cost under the SHP Joint-Venture shall be computed by the number of squaremeters equivalent to the 20% Socialized Housing requirement multiplied by the development cost persquare meter as agreed by the Local Government Unit of Lilo-an. The prevailing development cost of theMunicipality is P1,500 per square meter.SECTION 7. GENERATED FUND All funds collected under Section 4 of this Ordinance shall accrue to

a Trust Fund for the LGUs Socialized Housing Program.

SECTION 8. SEPARABILITY CLAUSE The provision of this Ordinance are hereby declared separable,


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and in the event of any such provision/s is/are inconsistent to any laws, ordinances, rules, regulations andguidelines and declared null and void, the validity of all other provisions shall not be affected thereby.

SECTION 9. EFFECTIVITY This Ordinance shall take effect upon its approval.


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i The Bank of Philippine Islands and well as a number of smaller banks were invited by the government to participatein the CMP program. But they figured that the incomes of the poorest thirty percent of the households would notenable them to pay the amortizations for even the cheapest housing units available in the market.

ii SeeNoynoy Aquino and Mar Roxas Covenant with the Urban Poor 2010. See also:Urban Poor Alliance, UrbanPoor Agenda: Proposed Doables for the First Year and First 100 Days of President Aquino, 2010.

iii Binay urges review of housing loan, pay schemes Manila Bulletin (23 August 2010)iv presentation at the cabinet cluster meeting on human development and poverty reduction. 09 December 2010.v See for Instance Home Guarantee Crporation (2008) Assessment of BLISS projects in the National Capital Region

(unpublished, availble at the IPD library)vi Smolka, Martin and Claudia Caesare (Property Taxation and Informality: Challenges for Latin America (Land Lines

Article) Land Lines: July 2006, Volume 18, Number 3

vii Berner, Erhard (2000) Learning from Informal Markets: Innovative Approaches to Land and Housing Provision.UNRISD Paper

Documents

12. IPD-FES-Housing December 2010 (1)