Socialized condominium unit

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By Roberto A. Capili

Real Estate Updates

Sunday, June 16, 2013

HOW would you like to own your socialized residential condominium unit? If the pending bill in Congress filed by Bagong Henerasyon Party-list Representative Bernadette Herrera- Dy (House Bill No. 5446) will become a law, condominium developers will be required to allocate twenty percent (20%) of their developed condominium project for socialized condominium units. This means that a great majority of our middle class wage earners and self employed sectors can avail of this privilege.

The proposal seeks to amend major provisions of Section 18 of Republic Act No. 7279 or the Urban Development and Housing Act (UDHA) with end in view of further strengthening the “balanced housing program.” The present provision of Sec. 18 of UDHA provides for a balance development whereby proposed subdivision projects shall be required to develop an area for socialized housing equivalent to at least twenty percent (20%) of the total subdivision area or total subdivision project cost at the option of the owner/ developer within the same city or municipality, whenever feasible and in accordance with standards set by the HLURB and other existing laws.

While there exists a socialized housing package of P 400,000.00 which is duly covered by the end-user loan programs of the Pag-IBIG Fund, present cost dictates that such types of development can only be pursued in rural and urbanizable developed areas where cost will be much cheaper. However, the factors of production such as land, labor and materials dictate that it can no longer be a viable proposition in urban centers such as Metro Manila, Cebu, Davao and Baguio City.


We have to admit that the present housing packages on socialized and low-cost or economic projects had accounted for a considerable addition to the national housing stock, however, it does not suffice to answer for the demand for affordable housing, particularly the working class and self-employed sector, in our rapidly developing urban areas nationwide. 

In this respect, real estate industry players have vigorously pushed for the inclusion of an alternative mode of compliance to the balanced housing development with the active participation of the condominium development sector. The industry believes in the development of a new socialized residential condominium (SRC) or medium-rise building (MRB) package with a minimum floor area of 20 sq. m. and a ceiling price of P850,000.00 per unit, provided that the project is located in urban centers.

Further to this proposal, they recommend that the basis for computation of the compliance project for condominiums be clearly defined to be equivalent to twenty percent (20%) of the net saleable floor area of the main project as opposed to total project cost or gross area for horizontal subdivisions. This is to allow some room of leverage and adjustments in their costing estimates and allow for reasonable profit margin. Likewise the compliance projects for these types of condominium development should be allowed to be located anywhere in the Philippines.

Practically dictates that the proposed amendment to the existing provision of the “balanced development program” provisions be pursued and supported. This is also in support of the mass housing program that the present administration is embarking on to solve the recurring housing backlog estimated to be close to four million units, especially for packages that fall under socialized and low-cost housing.

The production of more socialized residential condominiums will trigger more economic activities to pump prime the economy. The additional taxes generated by heightened activity in the construction and real estate industries will also lead to the increase in the fiscal coffers of the government in need of additional sources of funds without imposing added taxes.

To entice the private sector in investing in the production of socialized residential condominiums and medium-rise buildings, it is strongly suggested that they likewise be covered by all applicable incentives and entitlements for developers under EO 226 and Section 20 of UDHA, such as:

1. Reduction and simplification of qualification and accreditation requirements for participating developers;

2. Processing, approval and issuances of clearances, permits and licenses under the One-Stop Shop Offices in the country;

3. Simplification of financing procedures and liberal financing terms to be extended by financial and banking institutions; and

4. Exemption from payment of various taxes such as: project-related income taxes, capital gains tax on acquisition of lands for the project, Value-added tax for the project contractor, transfer tax for both raw and completed projects and donor’s tax for lands certified by the LGUs to have been donated for socialized housing purposes.

I am sure this will be welcome news to Filipinos who would want a home/ condominium unit of their own. Socialized Residential Condominium, anyone?

(For comments and updates, please email us at:

Published in the Sun.Star Baguio newspaper on June 17, 2013.


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