AFTER Congress had approved the bill on the professionalization of real estate practice and the President's approval of RA 9646 (the Real Estate Service Act or RESA) on June 30, 2009, we expected the bill on the creation of a Department of Housing and Urban Development (DHUD) follow suit. Up to now, however, the housing bill filed is still with the current 16th Congress being deliberated on.

As a real estate service practitioner and a concerned Filipino, we are one in supporting the passage of the omnibus and comprehensive bill creating and organizing the DHUD which had been pending in the legislative files for the past two decades or so. The creation of the housing department as the highest national body empowered to address housing in its totality by encompassing four major aspects: housing finance, production, regulation and administration is a compelling need.

Primarily the bill must seek to include in its mandate the required funding mechanisms which should be devoted solely to housing production and finance and not to be utilized for its operations. This is to ensure optimum housing delivery and assure an unhampered financing source. The funding measures should include:

1. The DHUD bill shall establish a Centralized Homebuyer Financing Program (CHFP) that will administer and unify all home lending operations coming from the P 100 billion fund from the unused portion of the Agri-Agra funds of banks as mandated by R.A. No. 7835 or CISFA; P20 billion each from SSS and GSIS; and P 70 billion from the Pag-ibig Fund. This will translate to an assured CHFP coffers of P 190 billion.

2. The country must start to operate a long-term Securitization Program to further augment the CHFP fund with the National Home Mortgage Finance Corporation as the lead agency.

3. The Philippines should look up to actively being a participant in the formation of a capital market, its source for long term funds through the already legislated Real Estate Investment Trust (REIT).

4. The amounts set aside for housing by various existing laws must be finally integrated and placed under a Housing and Urban Development Fund to be administered by the department in coordination with various government agencies involved in housing and urban development.

At this point, what is important to be an effective housing department, the agency must be cloth with powers sufficient to ensure:

1. That the Key Shelter Agencies (KSA's), Local Government Units (LGU's) and the private sector operate in a concerted, unified and holistic manner where the Housing Department Secretary possesses adequate administrative and supervisory powers over the KSA's and their governing boards;

2. That the housing and urban development effort is accorded the priority it deserves at the highest levels of government; and

3. That the funding support allocated to housing by virtue of various existing laws are allotted and used judiciously to address the needs of the greater majority of Philippine society.

To allay fears that the housing department will need additional funding for its creation, no funding is necessary to make this come true. The existing appropriation of the present Housing and Urban Development Coordinating Council (HUDCC) under the Office of the President, including personnel and assets will be transferred to the DHUD. The existing regional offices of HUDCC and its attached agencies will be maintained. A simply structured, lean and mean Department would be more appropriate to carry out its mandate.

The pressing need to address the current housing backlog which stands at around 5.5 million units justifies the creation of a housing and urban development department to synchronize efforts along this line. Former NEDA chief Cielito F. Habito observed that Philippine government spends no more than one percent of its total budget for housing, the lowest among the countries in Asia.

Yearly for the next twenty years, the country must build around 500,000 units if we intend to dramatically address, if not totally wipe out, the huge and gigantic housing problem. The success, however, of any government housing program rests on a well-planned and holistic approach of all factors that come into play in ensuring effective, sustained and meaningful housing program implementation. This is where the creation of a full-time well-funded housing department come into play.

The proposed legislation on housing and urban development will provide a tremendous boost to the economy as a whole. If enacted and implemented fully and decisively due to the enormous economic pump-priming impact of housing activity in the country in terms of providing employment and income opportunities for millions, the bill offers great opportunities particularly in the real estate industry.

As the multiplier effect or spark plug of real estate, it shall catalyse business activity for at least 75 other allied industries, attracting real estate investments and building new economic centers, and generating billions in government revenues from taxes and other income sources. In consonance with the real estate industry and practice, the housing department creation will be able to encourage many students to pursue specialization in real estate management and practice, thus, ensuring a steady stream of professionals that the housing department needs.

Let me reiterate the right time for the creation of the housing department: to help solve the existing housing backlog, a holistic and unified approach to ensure a sustained program implementation, increase the present allocation of government spending for housing to more than one percent of its total budget, ensure a secured housing finance schemes and production methods, securitization of its fund, pursue a source of long term funds through an active capital market starting with the enacted Real Estate Investment Trust (REIT) law, and integration of funds generated for housing under a Housing and Urban Development Fund.

On its organizational set-up, the proposed bill will not need additional funds, HUDCC personnel and assets will be transferred to the Department and the existing regional offices will likewise be absorbed. The Housing Department Head will have sufficient powers to coordinate KSA, LGU and private sector efforts, the department is accorded with highest priority in government and funding for housing is utilized judiciously to address the housing backlog.

With the economic opportunities in pursuing housing and urban development lurking in the horizon, we cannot let this situation pass.

The right time for a Housing Department is now. We hope that our honourable legislators see the wisdom in the bill and steer the passage of the DHUD bill soon. Otherwise, this landmark piece of legislation will be no more than a noble concept paper and all efforts to have it become a law will go down the drain.