Final Exam

In PP1
Topic: the Difference between socialized housing and
economic housing

Submitted by:
Rasmin ryam ramirez potes
Submitted to:
Ma’am chiara tabangay

1.) WHAT IS SOCIALIZED HOUSING------------------------------------------------------------------------------------------1

2.) WHAT IS ECONOMIC HOUSING----------------------------------------------------------------------------------------------2

3.) WHAT IS THE DIFFERENCE OF SOCIALIZED HOUSING-------------------------------------------------------------3

4.) ECONOMIC AND SOCIALIZED HOUSING BP (220) 02------------------------------------------------------------------4
What is Socialized housing?
Socialized Housing refers to housing programs and projects covering houses and lots or home lots only undertaken
by the government or the private sector for the underprivileged and homeless citizens which shall include sites and
services development, long-term financing, liberalized terms on interest payments, and such other benefits in
agreement with this Act. — Urban Development and Housing Act (UDHA), RA 7279 [Source: SHDA]
Who are the targeted beneficiaries?
“Economic and Socialized Housing” refers to housing units which are within the affordability level of the average and
low-income earners which are thirty percent (30%) of the gross family income as determined by the National
Economic and Development Authority from time to time. It shall also refer to the government-initiated sites and
services development and construction of economic and socialized housing projects in depressed areas. – BP 220
[Source: BP-220-Socialized-and-Economic-Housing-2]
Who are eligible for socialized housing program?
(a) Must be a Filipino citizen;
(b) Must be an underprivileged and homeless resident, as defined in Section 3 of this Act;
(c) Must not own any real property whether in the urban or rural areas; and
(d) Must not be a professional squatter or a member of squatting syndicates.
Source: HLURB Law Issuances
To further reduce the cost of housing units for the benefit of the underprivileged and homeless, the private sector
receives incentives like;
(a) Reduction and simplification of qualification and accreditation requirements for participating private developers;
(b) Creation of one-stop offices in the different regions of the country for the processing, approval, and issuance of
clearances, permits, and licenses: Provided, That clearances, permits, and licenses issued within ninety (90) days
from the date of submission of all requirements by the participating private developers;
(c) Simplification of financing procedures; and
(d) Exemption from the payment of the following:
(1) Project-related income taxes;
(2) Capital gains tax on raw lands used for the project;
(3) Value-added tax for the project contractor concerned;
(4) Transfer tax for both raw completed projects; and
(5) Donor’s tax for lands certified by the local government units donated to socialized housing purposes.
What is Economic Housing?
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What is the difference between Socialized

housing and Economic Housing
The Housing and Urban Development
Coordinating Council (HUDCC) estimates that
the country’s total housing backlog will
accumulate to 3.6 million units by the end of
2018.
For some politicians, addressing this long-existing problem means giving the most generous tax and non-tax perks to
real estate developers. This is a misinformed policy.
Currently, the government provides income tax holidays (ITH) up to four years to housing firms engaged in
constructing economic and low cost housing.
In addition, the sale of house and lot priced up to P3 million is exempted from value-added tax (VAT). In 2015, the
government had foregone the amount P3.5 billion in revenues for providing ITH and special tax rates to 86 real
estate firms.
The provision of fiscal incentives to economic- and low- cost housing has been in the Investments Priority Plan (IPP)
for so many years, but the housing shortage remains.
Under the second tax reform package, these incentives are proposed to be redesigned to make them targeted,
performance-based, time-bound, and transparent. It is time to review whether the incentives are fair, effective in
providing affordable housing to Filipinos, and not vulnerable to abuses.
Essentially, this translates to the question: “Are these incentives worth taxpayers’ money?”
As fiscal incentives are considered government expenditure, they are supposed to be subject to the level of scrutiny
we apply in critiquing budgeted programs.
REDUNDANT INCENTIVES
It is crucial to clarify definitions.
“Socialized housing segment” is for projects costing P450,000 or below, while “economic housing” covers the price
range starting from P450,000 but not exceeding P1.7 million. These two groups capture lower income class and
expectedly the biggest portion (already around 85%) of the housing backlog.
Meanwhile, “low cost housing” covers housing projects costing from P1.7 million to P3 million.
The “2.5 Rule,” used by real estate brokers to determine how much income one needs to buy a certain property,
shows that only the richest 20% of Filipino households (earning P680,000 annually and above) can afford “low cost
housing.” A misnomer, right?
Worse, an initial look at the firms receiving incentives shows that these include already profitable business entities
like SM Development Corporation, Filinvest, and the Villar-owned Vista Residences. They are listed among the Top
1000 corporations in the Philippines.
In short, government providing tax perks to firms engaged in “low cost” housing does not necessarily mean housing
for the poor. It means helping the portion of the housing backlog that would been addressed anyway even without
incentives. In addition, the incentives caters to already-profitable enterprises. They will invest, even without the tax
incentives. The incentives are clearly redundant.
SHORTAGE FOR THE POOR, SURPLUS FOR THE RICH
How about economic housing, one may ask?
In the case of low cost housing, the technicalities in the rules are being taken advantage of to divert benefits away
from those who need it. There are reported cases where housing structures or adjacent condominiums are designed
to mis-declare each piece as economic or low cost project.
For socialized housing, the real estate sector may say that at least there is the Balanced Housing Act (amended by
the UDHA). It requires developers to allot up to 20% of either their project area or costs to constructing socialized
housing units in the same city where their main project is located.
However, the law, which is struggling in terms of compliance monitoring (instances when socialized housing and
main projects are not located in the same city, or that project costs are misdeclared, etc), still fails to effectively curb
the backlog. And again, the underlying root cause is that these units and their prices do not accommodate the real
poor.
Meanwhile, HUDCC says that of the total housing need by 2018, 1.1 million or 31% of this need is for households
already with the capacity to afford housing.
There’s a disturbing picture of high rise condominiums in the metro recording very high vacancy rates, while the poor
are on the streets or in unacceptable quality of housing. The excess supply of high-end and mid-cost homes has
increased to over 550,000.
REFORMING FISCAL INCENTIVES FOR AFFORDABLE AND SUSTAINABLE HOUSING FOR THE POOR
Given that the population growth rate of the country has been declining — from 2.5% in 1990, to 1.6% in 2016 — it is
crucial to look at poverty, urbanization, and other factors, that aggravate the shelter problem. It is expected that the
government will target first the biggest portion of the backlog, which arises from unacceptable quality of housing. It
covers actual lack of shelter, informal settlements, and dilapidated, condemned, or marginal houses.
The government must rationalize the redundant income tax and VAT incentives of the low cost housing developers,
and use the taxes collected to augment Pag-IBIG housing loans for low income earners and direct subsidies to the
homeless. This would not only make housing affordable but also sustainable for the poor.
Shelter is a basic necessity; many assert it is a human right. But addressing the housing issue does not simply entail
building more houses, but mainly, matching supply and demand to prioritize housing for those who are economically
disadvantaged.
Providing government support to firms that build houses for the affluent segment of the market does not at all make
sense, and completely misses the po int of good government intervention.

Economic and Socialized Housing BP 220 (02)

BP 220
• Housing units which are within the affordability level of the average and low-income earners which is thirty percent
(30%) of the gross family income as determined by the National Economic and Development Authority from time to
time.
• Government-initiated sites and services development and construction of economic and socialized housing projects
in depressed areas.
 RULE I GENERAL PROVISIONS
Section 1. Scope of Application- These rules and standards shall apply to the development of economic and
socialized housing projects in urban and rural areas as defined in
Section 2 of BP Blg. 220. They shall apply to the development of either a house and lot or a house or lot only.
Section 2. Declaration of Policies- It is a policy of the government to promote and encourage the development of
economic and socialized housing projects, primarily by the private sector in order to make available adequate
economic and socialized housing units for average and low-income earners in urban and rural areas.
RULE II MINIMUM DESIGN STANDARDS AND REQUIREMENTS FOR ECONOMIC AND SOCIALIZED HOUSING
PROJECTS
Section 3. Compliance with Standards and Guidelines- Development of economic and socialized housing projects
shall be in accordance with the minimum design standards herein set forth.
 Section 4. Basis and Objectives of the Minimum Design- The minimum design standards set forth herein are
intended to provide minimum requirements within the generally accepted levels of safety, health and ecological
considerations. safety health ecological considerations
Variations, however are also possible, as may be based on some specific regional, cultural and economic setting,
e.g., building materials, space requirement and usage.
This minimum design standards encourages the use of duly accredited indigenous materials and technology such as
innovative design and systems, modular systems and components among others. The parameters used in
formulating these Design Standards are:
A. Protection and safety of life, limb, property and general public welfare.

 LIFE
 LIMB
 PROPERTY
 GENERAL PUBLIC WELFARE

C. Basic needs of human settlements, enumerated in descending order as follows:

 Water
 Movement and Circulation
 Storm drainage
 Solid and liquid waste disposal
 Park/playground
The provision of these basic needs shall be based on the actual setting within which the project site is located.
C. Affordability levels of target market

Affordable cost - refers to the most reasonable price of land and shelter based on the needs and financial
capability of Program Beneficiaries and Appropriate Financing Schemes (RA 7279)
D. Location- Both economic and socialized housing projects shall be located within suitable site for housing
and outside potential hazard prone and protection areas.
Section 5. Technical Guidelines and Standards for Subdivisions
In determining whether an economic and socialized housing shall be allowed, the following guidelines shall be
considered.
A. Site Criteria
1. Availability of basic needs
The prioritized basic needs cited earlier shall preferably be available with reasonable distance from the project site,
but where these are not available, the same shall be provided for by the developer.
2. Conformity with the Zoning Ordinance or Land Use Plan of the City/Municipality
 Generally, housing projects should conform with the zoning ordinance of the city/municipality where they are located,
thus, shall be in suitable sites for housing. However, where there is no zoning ordinance or land use plan, the
predominant land use principle and site suitability factors cited herein shall be used in determining suitability of a
project to a site. Furthermore, if the project is undoubtedly supportive of other land uses and activities (e.g., housing
for industrial workers) said project shall be allowed.
3. Physical Suitability
A potential site must have characteristics assuring healthful, safe and environmentally sound community life. It shall
be stable enough to accommodate foundation load without excessive site works. Critical areas (e.g., areas subject to
flooding, land slides and stress) must be avoided.
4. Accessibility
The site must be served by a road that is readily accessible to public transportation lines. Said access road shall
conform to the standards set herein of these Rules to accommodate expected demand caused by the development
of the area. In no case shall a subdivision project be approved without necessary access road/right-of-way
constructed either by the developer or the Local Government Unit.
B. Planning Considerations
1. Area Planning
Project design should consider not only the reduction of cost of development to a minimum but also the provision for
possible future improvement or expansion, as in the prescription of lot sizes, right-of-way of roads, open space,
allocation of areas for common uses and facilities.
Land allocation and alignment of the various utilities (roads, drainage, power and water) of the subdivision shall be
integrated with those of existing networks as well as projects outside the boundaries of the project site, e.g. access
roads set forth herein and should follow the standard specifications of the Department of Public Works and Highways
(DPWH).
2. Site Preservation/Alteration
a. Slope
The finished grade shall have a desired slope to allow rain water to be channeled into street drains. Where cut and fill
is necessary, an appropriate grade shall be attained to prevent any depression in the area.
Grading and ditching shall be executed in a manner that will prevent erosion or flooding of adjoining properties.
b. Preservation of Site Assets
Suitable trees with a caliper diameter of 200 milimeters or more, shrubs and desirable ground cover shall be
preserved. Where a good quality top soil exists in the site, it shall not be removed and shall be preserved for finishing
grades of yards, playgrounds, parks and garden area. Sibonga Heritage Park, Sibonga CebuTree and caliper
c. Ground Cover
Grass, shrubs, plants and other landscaping materials used for ground cover shall be of variety appropriate for its
intended use and location. They shall be so planted as to allow complete and permanent cover of the area.
3. Easements
Subdivision projects shall observe and conform to the provisions of easements as may be required by
a. Chapter IV, Section 51 of the Water Code of the Philippines on water bodies
b. National Power Corporation (NPC) on transmission lines
c. Fault traces as identified by PHIVOLCS per Resolution No. 515, series of 1992 a. Chapter IV, Section 51 of the
Water Code of the Philippines on water bodies
d. Right-of-way of other public companies and other entities.
e. For projects abutting national roads (primary roads) adequate easement shall be provided for road including
loading and unloading as may be required by national/local government units.
f. Other related laws (geology) FAULT LINE is the line formed by the intersection of the plane of a fault with the
surface of the Earth
4. Circulation
a. Depending on the classification of roads adjacent to the subdivision and the size of the project site, road network
should result into a hierarchy of functions and should define and serve the subdivisions as one integrated unit.
b. Roads complemented with path walk within the subdivision must be so aligned to facilitate movement within and
in linking the subdivision to the nearest major transportation route and adjacent property. Whenever there is/are
existing roads within the project site which shall be made part of the subdivision, these shall be improved in
accordance with the standards set forth herein.
c. Streets should conform to the contours of the land as much as practicable.
d. Provisions of major street extension for future connection to adjoining developed and/or underdeveloped
properties shall be mandatory and integrated or aligned with existing ones, if any.
e. Streets shall be so laid out to minimize critical intersections such as blind corners, skew junctions, etc.
f. Roads shall conform with civil work design criteria as per Section 10.B.3 of this rules and sound engineering
practices.
C. Design Parameters
1. Land Allocation
a. Saleable Areas There shall be no fixed ratio between the saleable portion and non- saleable portion of a
subdivision project.
b. Non-saleable Areas Non-saleable areas shall conform with the minimum requirements for open space comprising
those allotted for circulation system, community facilities and parks and playgrounds. SUNBERRY HOMES, Mactan
Location of parks shall be based on hierarchy, accessibility and shall be free from hazards, risks, barriers, etc.
b.2 Area Allocated for Community Facilities
Mandatory provision of area for neighborhood multi-purpose center both for economic and socialized housing
projects with a gross area of 1 hectare and above. These areas are non-saleable. However, the developer may
provide for areas for community facilities such as schools and convenience/retail centers in excess of the
requirement set forth in this Rule which shall be deemed saleable. The use of the said area shall be indicated in the
plan and annotated in the title thereto.
b.3 Circulation System
The area allocated for circulation system shall not be fixed, as long as the prescribed dimension and requirements for
access (both for project site and dwelling units) specified in these Rules are complied with.
Land circulation system shall comply with the pertinent requirements of BP 344 otherwise known as the Accessibility
Law.
Below are the planning considerations to be observed for circulation layout:
a. Observance of the hierarchy of roads within the subdivision.
b. Conformance to natural topography.
c. Consideration for access and safety, e.g., adequate radius, minimum number of roads at intersections, moderate
slope/grade, adequate sight distance, no blind corners, etc.
d. Optimization as to number of lots to lessen area for roads, at the same time enhances community interaction.
b.3.1 Hierarchy of Roads Hierarchy of roads (with respect to function, dimensions and project area) shall be
observed when planning the road network such that no major or minor road align with an alley or pathwalk.
 SUNBERRY HOMES, Mactan
b.3.2 Road Right-Of-Way The corresponding right-of-way for hierarchy of roads shall be as follows:
10.00 m 8.00 m 2.00 m 6.50 m LEGEND: LUMINA HOMES, Tarlac City
A collector road or distributor road is a low-to- moderate-capacity road which serves to move traffic from local streets
to arterial roads. Unlike arterials, collector roads are designed to provide access to residential properties. Rarely,
jurisdictions differentiate major and minor collector roads, the former being generally wider and busier.
A single carriageway (British English) or undivided highway (American English) is a road with one, two or more lanes
arranged within a single carriageway with no central reservation to separate opposing flows of traffic.
The minimum right-of-way of major roads shall be in accordance with the preceding table. However, in cases where
the major road will serve as interconnecting road, it shall have a minimum right-of-way of 10 meters. It shall have a
15-centimeter mix gravel (pit run) base course on well-compacted sub grade.
Major roads shall maintain a uniform width of road right-of-way. Tapering of road width shall not be allowed where the
road right-of-way is wider than the prescribed standard for the interconnecting road of the proposed subdivision.
Minor roads shall have a right-of-way of 6.50 meters wide. Interior subdivision project must secure right-of-way to the
nearest public road and the right-of-way shall be designated as interconnecting road with a minimum width of 10
meters. This fact shall be annotated on the title of the said road lot and must be donated and deemed turned over to
the LGU upon completion of the said interconnecting road. (See Figure 1: Interconnecting Road)
Contiguous projects or projects to be developed by phases shall be provided with interconnecting roads with a
minimum right-of-way of 10.0 meters. Alley shall have a width of 2.0 meters intended to break a block and to serve
both pedestrian and for emergency purposes, both ends connecting to streets. It shall not be used as access to the
property. Pathwalk shall have a width of 3.0 meters intended only to provide pedestrian access to property for
socialized housing projects. It shall have a maximum length of 60 meters.
10.00 m 8.00 m 2.00 m /alley 6.50 m LEGEND