Abstract
Affordability of housing is a critical component of the right to adequate housing. A house is deemed affordable when it is adequate in quality, and its cost does not prohibit the meeting of basic needs or threaten the enjoyment of human rights. Combining economic analysis of longitudinal national data from 2000 to 2015 and case studies of a cited in-city housing program and off-city resettlement life, this paper tackles the affordability of socialized housing for the poorest Filipinos within a human rights framework. The dominant approach of privatized off-city resettlement production has not addressed affordability. The focus on lowering housing prices ignores livelihood displacement, cost of living adjustments, and transportation and social service inaccessibility. For the poorest of the poor, an income-based housing subsidy, combined with urban land reform to regulate land prices and transport-oriented and inclusive urban planning, are critical to ensuring the right to adequate housing and development.
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Notes
- 1.
Republic Act No. 7279, enacted March 24, 1992.
- 2.
Republic Act No. 7160 (as amended by Republic Act No. 8553), enacted October 10, 1991.
- 3.
On February 14, 2019, President Rodrigo Duterte signed the law creating the DSHUD. It was met with hopes and fears among the urban poor and their advocates. Some organizations welcomed the integration of housing to urban land use regulation and its recognition of the people’s planning process. Others, however, are cautious of the powers to enter in public-private partnership agreements in the context of elite-led gentrification that has resulted in the displacement of many urban poor families to off-city resettlement sites (Ortega 2016).
- 4.
For instance, see HUDCC Memorandum Circular No 1, Series of 2018.
- 5.
Defined by the National Economic and Development Authority.
- 6.
This is according to Executive Order 90, Series of 1986. In the last few years, the NHA has ventured into socialized housing provision for calamity survivors in rural areas, and low-ranked police and military personnel.
- 7.
The HGC and the National Home Mortgage and Finance Corporation facilitate fund mobilization for contractors through risk-cover provisions and securitization. The Home Development and Mutual Fund provides housing loans for its members and the formal sector. The Socialized Housing and Finance Corporation offers financial assistance to organized communities located on private lands.
- 8.
I explicate the political economy of the low occupation of socialized housing in another paper, from which some excerpts in this section are lifted (Arcilla 2018).
- 9.
Sources: HUDCC Memorandum Circular 1, Series of 2000; HUDCC Memorandum Circular 2, Series of 2002; HUDCC Memorandum Circular 3, Series of 2005; HUDCC Memorandum Circular 1, Series of 2008; HUDCC Memorandum Circular 1, Series of 2013; HUDCC Memorandum Circular 1, Series of 2018.
- 10.
Transformed into equal annual amortization payments using actual interest rates and following the monthly compounded interest calculations used by the NHA on low-rise buildings in 2014. The interest rates were adjusted from 6.0% to 4.5% in 2013, and lowered to 3% in June 2018. Actual amortizations may vary a little as house construction portions of the lower-value loan are not subjected to the monthly compounded interests.
- 11.
Using 2008 socialized housing price ceiling of PhP 400,000, the SHDA (2013) estimates that at least an annual income of PhP 78,000 is required for a household to afford amortization using the 30% household income allocation on shelter expenditure. Based on these computations, up to about 40 percent of the poorest Filipinos in 2006 do not have this annual income. In 2009, the bottom 30 percent poorest Filipinos registered an average annual income of only PhP 62,000, 20 percent short of the needed minimum annual income. In the same years, the savings rate of the bottom 30 percent was negative to zero raising questions as to their capacity to meet amortization payments.
- 12.
Affordable loan is computed using the monthly compounded interest method used by NHA based on average monthly household rent/rental value payments. Computations noting that the PhP 240,000 loan with a PhP 35,000 subsidy for off-city resettlements where only the lot component is interest bearing did not change affordability levels. When the assumption of a 24-month savings as equity is added similar to the HGC (2005) study, off-city resettlement remains affordable to the fourth decile and up, while the in-city socialized housing valued at the price-ceiling is affordable to the 6th decile up. In an earlier study, Monsod (2016) computed that the PhP 450,000 loan for High Density Housing in-city is not affordable to the poorest 50%, while the NHA resettlement valued at PhP 205,000 is unaffordable to the poorest 20%.
- 13.
The lowest-priced housing loan of PhP 150,000 is from the Home Development and Mutual Fund (HDMF).
- 14.
Using the monthly compounded interest computation and a uniform mortgage schedule.
- 15.
Affordable loan is computed using same methodology of Table 2.
- 16.
Poverty monthly threshold for a family of five in NCR in 2015 was pegged at PhP 10,420. Available income class data does not precisely correspond to poverty threshold cut-off. The actual rental/rental value of house and lot was replaced with the NHA amortizations and the corresponding changes in savings computed.
- 17.
The national monthly poverty threshold for a family of five was set at PhP 9,064 in 2015. In 2018, the NEDA Secretary admitted that incomes equal to the poverty threshold cannot afford a decent living and instead offered ‘a top of mind’ figure of PhP 42,000 in 2018 as decent living monthly income for a family of five (Cordero 2018). At this rate, only the wealthiest 10% of Filipino families have a decent life and thus can afford housing within a HR framework.
- 18.
This is based on declared family income and the Philippine Statistical Authority 2015 provincial poverty threshold.
- 19.
These are respondents who answered ‘none’ to the NAPC survey question on primary occupation.
- 20.
Estimated official poverty rates in the first semester of 2018 ranged from 4.8% to 8.1% in District I and 3 in the National Capital Region, and the provinces of Bulacan, Rizal and Cavite. Official unemployment registered from 5.2% to 7.2%, in the National Capital Region, Region III, and Region IV-A. The differences in the NAPC and PSA methodologies allow only a rudimentary comparison but nonetheless point to higher levels of poverty and unemployment in off-city resettlements.
- 21.
The National Housing Summit on Housing and Urban Development (World Bank 2016) produced broad recommendations on affordable housing.
- 22.
Proclaiming Urban Land Reform in the Philippines and Providing for the Implementing Machinery Thereof.
- 23.
An Act Authorizing the Issues of Free Patents to Residential Land.
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Arcilla, C.A.C. (2023). Ensuring the Affordability of Socialized Housing: Toward Livable and Sustainable Homes for the Filipino Poor. In: Tadem, T.S.E., Atienza, M.E.L. (eds) A Better Metro Manila?. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-19-7804-3_8
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