The Socialized Housing Developers Association (SHDA) has asked the Board of Incentives (BOI) to increase the price ceiling per unit on housing projects entitled to incentives to take into consideration higher costs.
SHDA also urged the agency to review the price caps every three years to reflect the changes in the market.
SHDA urged the BOI to extend the number of years that housing is entitled to incentives from four years to four to six years for new projects and from three years to four for expansion.
In a letter dated April 4 to the BOI, SHDA has expressed support to a 2021 proposal of the National Economic and Development Authority to raise the ceiling to P4.28 million, saying the current P2 million threshold is no longer reflective of the current indices, and the rising costs of construction materials, labor, and land.
“These movements (on costs) added more pressure on supply costs, which were not addressed by the 2017 adjustment. All these point to the need for review and consideration by the Board to increase the current threshold,” SHDA said. The threshold has been adjusted to P2 million in 2017.
SHDA said the zonal values of residential areas in highly-urbanized cities in the country have constantly increased as well.
“…the growing number of inhabitants equates to an increase in the demand for housing; however, the constant increase in the value of land, as well as in construction materials, entails additional cost for the developers of economic and low-cost housing and condominiums which then impacts the ability of developers to meet the housing demand,” SHDA said.
The group said extending the income tax holiday that can be availed by BOI-registered projects will enable developers to offer more affordable payment schemes to its end-users.
The group said typical construction usually takes three years up to its final completion of four to five years for horizontal developments, and around five to six years for vertical developments
The demand for housing, the constant increase in the value of land and the rigid price ceilings, lower incentives, and high socialized housing compliance imposed by the government disincentivize private sectors in participating in the development of economic housing and, thus, impacting the housing backlog in the country.
