Housing can lift Pinoys into the middle class


Housing, at the basic level, can increase income more consistently for more people than most government programs. Easier too because after purchase it requires less mental or physical effort and gives more consistent growth in value at less risk for more people than other programs. The vast majority of trainees and recipients of aid in agriculture, manufacturing, carpentry, construction, crafts, crafts, tourism, education and other sectors who have purchased homes will attest that at the end of a career, the greatest Part of their retirement nest egg value comes from their homes more than from their pensions, savings or the businesses they have invested in. This asset not only works for them, but can be a capitalization for their next generation.

And yet the Philippines’ recent direct allocation of 3.975 billion pesos to housing agencies out of a budget of 4.5 trillion pesos, or about 0.08%, is simply too low. To reverse the growth of the homeless population, more resources must be allocated to this industry. Even if it is fully allocated to housing without administrative costs, this can only produce less than 10,000 housing units out of a backlog of over 6 million.

Regulatory requirements of different agencies are constantly being added and changed – in engineering, security, space, money laundering monitoring and accreditations, among others. The specialist staff retained is also increased and the price ceilings have not been adjusted accordingly, have even been reduced on a unit basis. These pressures – on the lower end of housing production – have led to an ever-widening gap between the supply and the needs of our population, which is expected to reach 8 million in a few years.

Over 90 percent of the Filipino population needs help getting their first residence, which is the first step in entering the middle class. This is recognized as primarily a core responsibility of government in all countries of the world, which can be assisted by partnerships with the private sector – simply ‘assisted’, not handed over.

Now is the best time to massively step up production and home ownership in order to bring more low-income people into the fixed asset owner side of the economy as soon as possible. High inflation is expected, as the world is inundated with printing dollars, causing consumption peaks without proportional production. Another reason to prioritize this sector as soon as possible is that it is an economic catalyst, the effects of which have generally been estimated between 3 and 4.5 times the multiplier, a good way to restart the economy more quickly.

Without much more supply of affordable housing, low-income Filipino households will be left behind in the coverage they can achieve in this current rising cost trend, and some will lose their ability to buy completely. They will suffer rather than benefit not only from these financial factors, but also from the social benefits for their children and their community. The government will have to spend more on police, maintenance, health services and poverty support, or else not create new urban centers and businesses that might otherwise thrive at an earlier stage.

Homeownership has been proven to lead to better peace and order, children’s educational outcomes, accelerated economic development and greater civic participation. The benefits are particularly important for low-income households.

It is the greatest creator of wealth for the vast majority of families in all countries over time, not only because it is forced savings, but it forces maturity in decision-making and decision-making. management, and it allows for leveraged participation in the development of a community and is a trick against inflation – assuming the purchase is end use and not speculative.

In many prosperous developing countries, housing is a key component of government development planning and policy strategy. This is normally done as part of overall urban planning, which includes not only housing, but infrastructure for access to institutions, services, businesses in an area.

Singapore, which has grown from a third world to a first world country with a GDP per capita of $ 65,640 in 2019 (up from around $ 3,500 per capita in the Philippines in 2019). Singapore’s new government built 55,000 apartments in the first five years as part of its core strategy, more than the colonial government in 30 years. Government Housing and Development Board apartments are now inhabited by 8 out of 10 residents, who have used housing and a basic strategy, now considered to provide a “unique national identity and collective experiences … ensuring social stability and economic growth “.

Unmanaged housing shortages, meanwhile, have become a source of political and social unrest in Hong Kong and major cities across the United States. China, after having housed almost all of its population, is building housing and infrastructure upstream of needs as part of its development strategy. This is seen as both a cause and an effect of the rise in income, although there are issues regarding the location of desired units, high prices, and excessive construction that the government is now actively managing.

Streamlined incentives and processes will go a long way in increasing the number of families with housing, which is a recognized key to economic growth with the participation of ordinary people. But this additional production cannot be imposed by price caps that are not achievable by the ordinary enterprise on a large-scale sustained basis, or even by the government.

After a few real estate debacles in the 1990s and 2010, government regulators were able to work with stakeholders to develop the industry without major incidents. The Housing and Land Use Regulatory Board (HLURB) monitored the situations so that there were no major collapses or frauds, the Pag-IBIG Fund adjusted its rules for more ‘access while protecting the funds so that he has significantly increased his income and the size of his portfolio. , although there are differences of opinion on which process to work on. The Anti-Red Tape Authority (ARTA) has also helped speed up processes and business.

The various housing and financing agencies related to housing were finally grouped under the Department of Human Settlements and Urban Development or DHSUD, created in 2019 under Secretary Eduardo del Rosario, which has been in constant discussion with the various stakeholders and his team, balancing different interests including those of owners, vendors, associations and government.

Our government can still unlock tremendous value and accelerate the recovery and development of the Philippines through the housing industry. The incentive production of the affordable housing sector and the rationalization of specifications and requirements of some agencies are necessary measures to rapidly increase production, the benefits of which will be greatly increased if implemented sooner rather than later. Private actors would also do well to coordinate closely with the government.

We are behind ASEAN in the economy, but giving more priority to housing will catch up much faster and benefit more people sooner.

Our objective behind, should not be simply to move forward, but to jump over it!

New Worlds by Integrated Development Studies Institute aims to present frameworks based on a balance between economic theory and historical realities, and success rooted in real businesses and communities. ([email protected]).


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