AR 533A: HOUSING

LESSON and ACTIVITY PLAN: Week No. 2

Preliminary

Specific Learning Objectives:

1. Discuss the history of housing in the Philippines.
Topics and Activities
1. Pre-war to 1972
2. 1972 to 1986: Marcos Years
3. Aquino and Ramos Years
4. Estrada and Arroyo Years

Introduction
The history of national policies on housing in the Philippines registers a long list of unsuccessful programs. Hundreds of thousands of people
still trapped in poor and unacceptable living conditions today, a problem which remains unresolved. Major causes of this problem emanate
from the fragmented and uncoordinated approach to housing taken by the authorities. Further resources are insufficient to sustain these
programs while mismanagement remains widespread.
The government’s responsibility to ensure that every Filipino enjoys a decent home has long been accepted as an important aspect of public
policy. This is basically hinged on the constitutional mandate that the state shall “establish, maintain and ensure adequate social
services in the field of housing…, to guarantee enjoyment by the people of a decent standard of living.”
However resources are limited and competing claims of health and education on the governments resources may win over housing. The
housing problem has worsened over the years as evidenced by the widening gap between the people’s housing needs and supply especially
in the 70s. This occurred despite increased housing investments undertaken by both the government and the private sector.
In 1983 the total housing investment amounted to 14.76 million and this constituted 4.8 % of GNP: Gross National Product. This increasing
awareness of the seriousness of the problem and the subsequent involvement of both the private and public sectors had little impact on
researchers and very few serious attempts to study the problems of the housing sector have been recorded.

History of Housing in the Philippines

Trends and Patterns, 1960 to 1980
 There have been significant increases in the housing stock in the Philippines during the past three decades. From a total of 4,790,594
dwelling units in 1960, the number has gone up to 8,767,604 units in 1980 reflecting an overall increase of 83 %.
 The regional distribution of the total housing stock indicates the prominence of the National Capital Region (NCR) and Region 4. The
total number of dwelling units in these two regions constitutes about 25 % of the total in the country. Region 12 has the least number.
 In terms of occupancy rate, the highest was recorded in 1970 when only about 1.5% of total dwelling units were found unoccupied. In
1960 and 1980 the occupancy rate was 97%. Most of these occupied dwelling units were classified as single houses accounting for
85% of the total in 1960, 89% in 1970 and 93% in 1980. It should be noted also that some non-residential structures are being
occupied as dwelling units. From a total of 41,571 in 1960, it went up by 26% in 1970.
Brief Historical Background
 Prewar housing conditions must have warranted some form of government intervention. As early as the American regime, some efforts
to develop a housing policy were evident but concentrated in Manila on account of its overcrowding and sanitation problems. The initial
steps taken under the American regime were in the form of sanitation drive.
This was carried out by setting new sanitation and building standards that were adopted to native dwelling construction and
establishment of “sanitary barrios” which served as relocation areas for families whose nipa houses originally located in congested
areas were demolished.
These barrios were located within city boundaries and supplied with basic facilities not available in nipa neighborhoods (e.g., surface
drainage, street and alleys, fire hydrants, public bath and public laundry). Relocation was made at public expense but the relocated
families had to pay some rent to the landowners.
 Two years of implementation, funds for the project dwindled and sites became more difficult to acquire. This was also accompanied by
a change in the housing program’s thrust to sanitary models of single-family and apartment units. However, “these model houses were
built for demonstration purposes only since the government did not actually supply new houses in the sanitary barrios”

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AR 563: HOUSING
LESSON and ACTIVITY PLAN: Week No. 2
Preliminary

By 1920s as a result of labor agitation, barrios obrerox were established and this scheme was merely superimposed on the previous
sanitary barrio scheme with additional features like renting out of some houses and lots. Evidently the government under the American
regime carried out housing programs for maintaining public health and safety and avoiding of breeding grounds for crime and sedition.
 The programs basically involved slum clearance and some relocation. With the influence of the private sector, the evolving housing
policy of the American regime was “something less than pure altruism for the poor”. For example, the Housing Committee
recommended the construction of dwellings for slum families who could afford them and this was in spite of the fact that during the
period circa 1930s, about 60% of the slum families could not afford and kind of suitable home, and 40% of slum dwellers in Manila “live
in extreme poverty and squalor, and in many instances on the verge of starvation.
 During the Commonwealth Period, a program of social justice emerged and while the period’s housing policy tried to respond to the
needs of the labor group, it remained in part just an extension of the previous period’s program. Hence, the slums were still seen as the
source of crime and diseases as well as the breeding place of rebels. Officials of the Commonwealth Government also felt that slums
were an eyesore and there were efforts to make the city presentable to the eyes of the foreigners.
 More direct government intervention started in the 1930s. In 1938, the laborer’s tenement project was completed in Barrios Vitas,
Tondo. Eleven 2-storey buildings were constructed and provided 262 dwelling units with modern toilets, water supply and electrical
installations. Rents were low ranging from P 4.70 and P 12.70 per months and required monthly income was between P 30 and P100.
However, the project’s name was a misnomer since a good proportion of the tenants were classified as employees and not laborers.
This resulted because applicants without stabled jobs were not considered. This project was followed by a series of broader legislations
and the creation of housing agencies to directly implement housing programs.
 On July 11, 1936, Commonwealth Act No. 620 or the Homesite Act was passed which authorized the government to acquire lay as
well as friar states which were eventually subdivided into home lots or small farms. One major acquisition made in 1938 was the
Diliman Site which was intended to be a “social experiment” to be replicated in all parts of the country where there are laborers.
The People’s Homesite Corporation was created to develop this area. Its charter evidently did not reflect the bias towards the
working- class ascribed to the Diliman project at the start of its implementation, although aimed at general welfare, it actually reflected
an orientation towards the middle class.
 In early 1941, a shift towards a more social orientation in the government’s housing program was observed. Policy was geared towards
social responsibility which required state intervention & assistance in behalf of the poor particularly wage earners residing in the slums.
The National Housing Commission was created by virtue of Commonwealth Act 648 to undertake programs in urban housing,
subdivision and slum clearance programs. Its objectives were basically urban-oriented but while they emphasized the elimination of
slums, they also considered replacement of slum dwellings. Also instead of “middle class”, these objectives were aimed broadly at the
needy and the very poor. The organization was not carried out immediately on account of the war.
Early postwar housing programs retained the previous period’s thrust: slum, clearance, subdivision development and relocation
activities as authorized under the PHC and the NHC charters.
 In 1940, the People’s Homesite and Housing Corporation (PHHC) was created through Executive Order No. 93. This new agency
was the result of the merging of the People’s Homesite Corporation and National Housing Commission and it had the following
corporate objectives:
1. establishment of public-housing for low-income families;
2. slum clearance
3. establishment of housing for the destitute; and
4. acquisition, subdivision and resale of landed estates.
Again the agency’s program focused on housing and subdivision development catering basically to the needs of the middle-income
groups. Its slum clearance and relocation functions were carried out only in collaboration with other agencies of government,
specifically those involved in social welfare services delivery.
It was also during this decade that the social security agency for government employees of the Government Service Insurance System
(GSIS) started to extend inter-agency project loans to finance PHHC projects.
By 1955, it started granting housing loans to its members. In 1957, the Social Security System also began to extend housing loans to
its members. In 1960, the Development Bank of the Philippines also started a small-loans program for low income borrowers.
Similar to the housing programs launched before, a very small proportion of the low-income group availed of the loans from these
institutions since the rules governing the program favored only the middle-income groups and even the upper classes.

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AR 563: HOUSING
LESSON and ACTIVITY PLAN: Week No. 2
Preliminary

 During the 1960s, the directions of the government’s housing program were as follows:
1. expansion of housing finance scheme by geographical coverage;
2. tenement housing;
3. construction of pre-fabricated dwelling units; and
4. Increasing resettlement and relocation programs cure industrial development.
 The Tenement Law or Republic Act 3469 was passed reviving the construction of multi-storey tenement houses which were rented
out to low income families.
It was also during this period Congress passed Republic Act 3802 mandating PHHC to sell all its rented housing units to the tenants
at cost and payable within 10 years at 6% per annum interest and with all the previous rental payments applied to the purchase price.
Likewise, several resettlement and relocation activities of squatters were undertaken.
The National Housing Corporation was created with primary functions of manufacturing pre-fabricated dwelling units for low and
middle income groups to help in coordinated massive housing program of the government.
The National Special Housing Act or Republic Act No. 6026 was also passed to introduce a new approach to the resettlement program of
the government through a balanced residential-industrial development program. Under this approach, resettled squatters were given
necessary and appropriate means of livelihood so they would not abandon the resettlement areas.
 In the 1970s, the low income families remained the target group of government administered housing projects. Urban redevelopment
through the sites and services approach became the primary focus of the government, specifically the Tondo Foreshore and Dagat-
dagatan Area. Government lending institutions provided substantial contributions through individual residential loans & participation in
mass housing projects. This decade also witnessed the creation of the new government agencies to take care of its housing program:
1. Task Force on Human Settlements (1973)
2. Inter-Agency Task Force on Nabaooan Relocation (1973)
3. Tondo Foreshore Development Authority (1974)
4. National Housing Authority (1975)
5. Human Settlements Regulatory Commission (1976)
6. National Home Mortgage Finance Corporation (1979)
7. Ministry of Human Settlements (1978)
8. Home Development Mutual Fund (1978)
 The concept of housing in the Philippines had undergone remarkable changes over the years. Initially considered simply as a “public
problem” involving slum dwellers and squatters (i.e., the low income groups), housing has evolved into a program considered in the
context of a “human settlements approach” where provisions of shelter is complemented by the other dimensions of human settlement.
Self reliance is emphasized so the program really becomes a “partnership” between the government and the beneficiaries.
Until the last few years of the 1970s, the proliferation of government housing bodies evidently resulted in many duplications and
confusions. There was little coordination among these agencies that a more cohesive and sustained housing program was never
accomplished. Piecemeal legislation was abundant and each one was serving only a particular purpose and a particular group for a
limited period of time. This resulted in very superficial and short-lived effects and as a whole, a waste of scarce resources.
 In 1978, the National Shelter Programs was formulated putting all housing agencies of the government under one Ministry
responsibility. It was during this year that the Ministry of Human Settlements was established for this very purpose. Under this
program, maximum participation of the private sector was encouraged.
A Sketch of Urban Policies
 Public interventions in land and housing markets go back to the early decades of American rule when Manila had a mere population of
329,000 inhabitants compared to 88,574,614 populations for 2007. For a long time measures lacked the scope and focus needed for
effective urban development.
Under the Americans, some traditional thatched nipa houses were demolished in congested districts and poor families were moved to
new “sanitary barrios” of “barrios obreros” with streets, water mains and drainage.
During the Commonwealth period of the 1930s, a Homesite Act authorized public acquisition and subdivision land for laborers, but
programs were too costly for the target group.
After the Japanese occupation, A People’s Homesite & Housing Corporation took on the task of clearing slums, subdividing Land
Estates & building public housing for the poor. Land was acquired at unaffordable high prices for target group of low income families.

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AR 563: HOUSING
LESSON and ACTIVITY PLAN: Week No. 2
Preliminary

 From 1947 to 1970, none of the 17 national development plans actually addressed the housing sector. In the early 1970s, a Human
Settlement Commission under the Office of the President began to develop land use for all urban areas. Better housing was to be
promoted with loans from social security funds for the development of experimental pre-fabricated housing for the middle class.
Thousands of squatters were resettled in core houses at Dasmariñas, Carmona and other distant areas.
 In 1976, with World Bank assistance, a site and services program was initiated at Dagat-Dagatan, north of Tondo. Contrary to their
stated aims, none of these programs had much impact on general land and housing costs.
 In 1978, President Marcos decreed an Urban Land Reform with provisions for regulating ownership, prices, rent and land in
Metropolitan Manila. A number of agencies were set up and consolidated in a Ministry of Human Settlements, under Imelda Marcos,
Governor of Metro Manila, but these did not concern themselves with the basic problem of undoing the incentives for keeping land idle,
nor was finance provided for inducing land sales.
Of the 244 areas for priority development (APDs), only one had vacant land. An important step forward was a modification of building
and urban layout codes for low-cost housing. Batas Pambansa 220, which allows lower standards and lots as small as 32 sqm.
 In the subsequent government of President Corazon Aquino, the Ministry of Human Settlement was replaced by a Housing and Urban
Development Coordinating Council (HUDCC). A medium term development plan for 1987-1992 made housing a priority, and
substantial progress was made by integrating financial intermediaries.
 By mid-1980s, the emphasis was thus less on the physical and more on strengthening the ability of responsible institutions to finance
housing. Part of the work was the RPTA and its Real Property Tax Enhancement Program that was supposed to improve tax mapping
(identifying untaxed properties), assessments and collections.
The aim was to identify and to computerize all sites and their values. Parcels that have previously gone undetected were successfully
identified. But the effort to tax the parcels including arrears succumbed to political pressures. When Mayor Simon of Quezon City tried
to raise the tax base by quadrupling valuations, the increase was challenged in the courts, and the mayor was defeated in the election a
year later. Even his quadrupling assessments; however remained less than a fourth of market prices.
In the Philippines, property tax is assessed and collected locally, but national legislation now limits the maximum rate on land to 3%
including the 1% ear marked for education. These percentages have actually been only 0.6% and only 0.2% of “assessed fair market
value.” It is possible, however, where multiple owners claim the same parcel, more than one payment maybe made to the City
Assessor.
To keep tax records up-to-date, surveyors, sellers and buyers are all supposed to notify the tax authorities, but such is not enforced.
The RPTA program raided identification and assessment by shifting to map-based inventories from owner-declarations. Valuation rose
by 20% due to the inclusion of missing plots and by another 20% due to more accurate information about known plots.
Political pressures soon forced the national government to intervene, and assessments were compelled to lag from one to five years
behind current market values. With inflation at around 15%, the net effect was that reform raised collections by only 1.1%. Local
officials “refrained from any provocative collection enforcement, allowing average collection rates drop to below 50%”. A 1991 law, RA
7160 mandates reassessment every three years
 As population, income and both foreign and national investment grew, land prices continued to escalate as well, making standard
dwellings and sites unaffordable for more and more households. The difficulty is partly due to obstacles in converting peripheral farm
lands to urban use in accordance with the Comprehensive Agrarian Reform Law or Republic Act 6675 of 1988.
 In 1992, the Philippine Congress passed an Urban Development and Housing Act that called for the “equitable utilization of
residential lands… not merely on the basis of market forces” (RA 7279, Congress of the Philippines).
The act primarily seeks to provide land and housing for the poor is not a general reform of land and housing markets. Nevertheless, a
section calls for the expropriation (with compensation at market prices) of public domains of all unimproved sites exceeding 300 sqm. in
highly-urbanized areas and 800 sqm. elsewhere.
Improvements have to be structures worth at least half as much as the land value. Local governments are supposed to implement
these and other provisions using guidelines to be developed by the Housing and Land Use Regulatory Board (HLURB) with the advice
of the Housing and Urban Development Coordinating Council (HUDCC).
 The government of President Fidel Ramos, elected in 1992, has set a target of helping in the construction of 1.2 million dwellings by
1998.

Providing Affordable Housing for Urban Poor in the Philippines

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AR 563: HOUSING
LESSON and ACTIVITY PLAN: Week No. 2
Preliminary

 In 1981, government officials placed the need for new housing at over 1.1 million units. Tens of thousands of barrios are scattered
through out the Philippines, each consisting of a double row of small cottages strung out along a single road.
 The Ministry of Human Settlements created in 1978sets housing programs in motion. Its first major program was the Bagong Lipunan
Improvement of Sites and Services (BLISS), which undertook 445 projects involving 6,712 units housing 40,272 people. As with
many programs begun during the Marcos administration, projects became ridden with scandal.
More credible was the Pag-IBIG fund, which was set up to promote savings for housing and provide easy-term housing loans with
contributions from individuals, banks, industries and the government.
By the end of 1985, P 98 million in loans had been provided to 171,585 members. In 1985, membership contributions totaled to P 1.34
billion and 1,451 housing loans were approved.
 The Aquino Administration offered tax exemptions to domestic corporations and partnerships with at least 300 employees that invest
funds in housing. From 1984 to 1987, an annual average of about 103,150 units was built by the private sector with minimal assistance
from the government.
According to recent estimates, at least 90% of all housing units were detached houses. Owners occupied about 80% of all dwellings.
In 2000, there were 15,278,808 households with an average of five people per household.
 In December 19, 2003, the Asian Development Bank (ADB) working together with the Development Bank of the Philippines (DBP) and
the Housing and Urban Development Coordinating Council, will help provide affordable housing for some 20,000 urban poor families
outside Metro Manila through a US $ 30 million loan and $ 1.5 million technical assistance (TA) grant that has been approved.
 Housing and land markets have not kept pace with rapid urban growth in the Philippines, where half of the population now lives in urban
areas. This figure is expected to reach 60% by 2010. Shelter is not for the poor and more than 40% urban families live in makeshift
dwellings in informal settlements. The Development of Poor Urban Communities Sector Project has three components:
1. Local Government Units (LGUs) will be given funds to develop the sites and to distribute land titles to informal settlers, in
partnership with communities and non-government organizations.
2. Beneficiaries will be given access to micro credit for shelter finance and small enterprise development.
3. The capacity of communities, LGUs and government housing agencies to facilitate community-driven planning will be strengthened
to decentralize shelter delivery.
The six-year housing project will be patterned after ADBs pilot projects for the urban poor in Payatas and Muntinlupa both in Metro
Manila, which have been successful in community mobilization, shelter and infrastructure provisions & financing and livelihood support.
The project operationalizes the “De Soto Principle”, whereby idle and unproductive assets, mainly consisting of squatted land under
government control, are put into use through empowerment of the poor.
Housing during Aquino and Ramos Administration
 Housing took prominence from a 0.37% annual growth rate in the last five years of the Marcos regime, it went up to an average of 3%.
The two administrations pitched in an aggregate of P 485 billion. The increase in shelter production was imminent as government
housing agenda became more brisk.
 Licenses to Sell issued reached 1,411,999. During the Ramos administration it increased at an average rate of 22%. Although figures
in shelter delivery improved, it was not able to cope with a population that has been increasing at an annual average of 2.6%.
Population could grow to 130 million in less than 30 years.
 Momentum in housing delivery was not sustained due to several factors. One is the Asian Contagion, which brought a bust in the
economy and hurt the real estate industry. Others are programs and policies were either not sustained or failed to address the need of
housing stakeholders. Social behavior also added to the problems of housing.
 The programs of both administrations may be considered as producer and market friendly. They were designed to give incentives to
the various players of the housing industry and address the longings of the home seeking public.
 The programs that jump started the housing agenda of both administrations was the Unified Home Lending Program (UHLP) and the
Community Mortgage Program (CMP). They increased house production and encouraged real estate and construction practitioners.
 Housing lost its luster as the initial overwhelming response was replaced by a severe collection problem. The low 45.15% collection
efficiency of UHLP caused cash flow problems to the funding agencies (HDMF, SSS and GSIS) that later pulled their support from the
program. The UHLP was later discontinued. Factors that contributed aside from the insolvency to the ineffectivity of the UHLP are:

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AR 563: HOUSING
LESSON and ACTIVITY PLAN: Week No. 2
Preliminary

1. Formula lending policy did not consider the paying capabilities of borrowers. Borrowers whose houses were not properly
constructed opted not to continue their amortization.
2. Lack of collection windows. Failure to pay of borrowers during weekday’s cause of work and no collection windows on weekends.
3. Resettlement projects failure due to lack of other basic services such as schools, market places, others. Livelihood components
are also ineffective. Squatter syndicates hamper the government’s relocation activities.
4. Paying capacity of most home seekers is incomparable to the escalating cost to build or buy houses. Commercial interest rates
are unaffordable. The dwindling land resources in urban areas bring land prices up. There are many provisions in the RA 7279
(UDHA) which have not yet been implemented. Other provisions are even disincentives e.g. socialized housing tax.
5. The devolution of functions of HLURB to Local Governments (pursuant to the Local Government Code) has slowed down housing.
Many LGUs are still technically inadequate in the review of applications of Development Permits. Socio-demographic factors that
affect housing are: concentration of population in major urban areas, poor peace and order situation in the countryside, agricultural
cartels and other.
Apartment
 Is a self-contained housing unit that occupies only a part of a building. It may be owned by an owner or occupant or rented by tenants.
 Some apartment dwellers own their apartments, either as co-ops, in which the residents own shares of a corporation that owns the
building or development. Most apartments are in buildings designed for the purpose but large houses are sometimes divided into
apartments. The word apartment connotes a residential unit or section of a building.
 Apartments can be classified into several types. One is a Studio, efficiency, bedsit, or bachelor style apartment. These all tend to be
the smallest apartments with the cheapest rents in a given area.
These kinds of apartment usually consist mainly of a large room which is the living, dining and bedroom combined. There are usually
kitchen facilities as part of this central room, but the bathroom is its own smaller separate room.
Moving up from the efficiencies are one-bedroom apartments where one bedroom is a separate room from the rest of the apartment.
Then there are two-bedroom, three-bedoom, and etc. apartments. Small apartments often have only one access. Large apartments
often have two-access, perhaps a door in the front and another in the back.
A garden apartment has some characteristics of a townhouse: each apartment has its own entrance, and apartments are not placed
vertically over one another. However, a garden apartment is usually one-storey high and never more than two-storeys; they are often
one-bedroom and almost never more than two-bedrooms.
Some garden apartment buildings place a one-car garage under each apartment, with pedestrian entrances from a common courtyard
open at one end. The grounds are more landscaped than for other modestly scaled apartments.
Alternately, “garden apartment” can refer to a unit built half below grade, putting its windows at garden level.
 In Philippine setting, when a part of a house is converted for the use of a landlord’s family member, the unit may be known as an in-law
apartment or granny flat, though these (sometimes illegally) created units are often occupied by ordinary renters rather than family
members.
Condominium
 A condominium, or condo, is a form of housing tenure where a specified part of a piece of real estate (usually of an apartment house) is
individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas
is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent
ownership of the whole piece. Colloquially, the term is often used to refer to the unit itself place of the word “apartment”.
 Condominium is the legal term used in the United States and in mist provinces of Canada. In Australia and the Canadian Province of
British Columbia it is referred to as strata title. In Quebec the term syndicate of co-ownership is used. In England and Wales the
equivalent is commonhold, a form of ownership introduced in 2004 and still uncommon in most places.
 Technically, a condominium is a collection of individual home units along with the land upon which they sit. Individual home ownership
is construed as ownership of only air space confining the boundaries of the home. The boundaries of that space are specified by a
legal document known as a Declaration, file of record with the local governing authority. Typically these boundaries will include the
drywall surrounding a room, allowing the homeowner to make some interior modifications without impacting the common area.
Anything outside this boundary is held in an undivided ownership interest by a corporation established at the time of the condominium’s
creation. The corporation holds this property in trust on behalf of the homeowners as a group- it does not have ownership itself.

Architect Dennis C. de Villa, uap, csp

June 29, 2008. November 5, 2013
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