THE Housing and Land Use Regulatory Board (HLURB) 7 approved 62 projects in 2018 valued at P16.251 billion.
The figure is lower than in 2017, when the agency approved 83 projects valued at P28.280 billion.
A total of 46 applications for subdivisions projects reached HLURB’s desk from Jan. 1 to Dec. 21 last year, but only 27 projects were approved and were given licenses to sell (LTS).
Approved subdivision projects, valued at P5.6 billion, were composed of 5,763 house-and-lot units and 539 lot-only units.
HLURB 7, likewise, approved 31 condominium projects out of the 50 applications it received last year. These approved condominium projects translate to 3,071 units worth P10.610 billion.
Of the approved projects, 10 condominium projects belong to the open market/medium cost category, 19 in the economic housing segment and two socialized housing projects.
The agency also approved four memorial projects valued at P35.302 million.
In an interview, HLURB 7 Director Francis Ordineza said the decline in the number of projects issued with LTS last year was due to the socialized housing compliance as mandated under Republic Act 10884.
The law states that a condominium project is required to allocate five percent of its development cost, or gross area of the main condominium project, for socialized housing, while a subdivision project is required to allocate 15 percent of the total development cost, or area of their main subdivision project, for socialized housing.
Ordineza said developers encountered difficulty in establishing their socialized housing projects, specifically in Metro Cebu, considering the high acquisition cost of raw land in these areas.
“HLURB will not accept any application for LTS of their main subdivision or condo project without the corresponding approved and accredited socialized housing compliance,” he said.
He added that even if the developers had their own socialized housing project or program, these must still go through accreditation from HLURB’s central office in Manila before it would be credited as their socialized housing compliance.
However, this is only one factor.
Ordineza said the delays in issuance of building permits for condominium projects and the approval of verified survey returns from the Department of Environment and Natural Resources’ Land Management Bureau for subdivision projects are also other factors that contributed to the decline in the issuance of LTS. These are requirements that the HLURB 7 needs to issue an LTS.
But moving forward, HLURB 7 remains bullish about Cebu’s property sector.
“We’re expecting more applications this year,” said Ordineza.
He noted that the new implementing rules and regulations covered by HLURB Memorandum Circular 09-2018 now allows developers to put up an escrow account through a tripartite agreement between HLURB, any bank, and the developers for their socialized housing compliance equivalent to 25 percent of their five percent development cost for condominium project, or 25 percent of their 15 percent development cost for subdivision project.
An escrow is an agreement between the principal buyer and seller to employ the services of a third party to hold their assets for them. This third party keeps such assets, be it title of ownership or cash, until further instructions are given by either party for its release.
It is an arrangement that keeps the assets of the parties safe, and shows serious intent to proceed further with the transaction.
“This is non-recoverable and to be utilized for the socialized housing projects for the local government unit,” said Ordineza.
“This is so far the easiest and fastest way to comply with their socialized housing requirement, and the signatory of the escrow is the regional head only,” he added.
The speedy issuance of LTS is an area that developers want to see progress this year.
“On the government side, the challenge is on how they could fast-track the release of permits,” said Mandani Bay project director Gilbert Ang.
AppleOne Properties president Ray Manigsaca admitted that the high prices of land in Metro Cebu pose a challenge to developers to meet their socialized housing requirements or even erect economic housing projects.
“Raw lots in the city are already expensive, and developers are having difficulty where to erect this kind of project. They don’t also want to take risks to build socialized housing in faraway places when the buyers of this type of project are working in the city,” said property marketer Anthony Gerard Leuterio, founder of Filipino Homes.
He said about 90 percent of the projects for 2018 were not unveiled to the market because some developers were not able to meet some of the requirements, particularly on socialized housing.