We in the private sector are fiercely committed to becoming better builders, striving to build a nation that can take its place among other countries with pride and dignity, because it has done right by its people.

Where are we now?
The stark manifestation of urban living in the Philippines today is most eloquent in the “slumification” of its cities: people living in makeshift houses and push carts, on the sidewalks, between industrial buildings, along seawalls, rivers and creeks, and under bridges, flyovers and the light rail transit.

It is reflected in the “extreme commuting” phenomenon characterized by the emergence of sub-urban communities far from places of work and business, subjecting hundreds upon thousands of residents to a grueling two to four hour commute each day, because existing mass transportation and road infrastructure have simply failed to keep up.

Finally, it is visible in the “over-urbanization” of cities: the quadrupling of population densities in the urban centers without corresponding increases in per capita income, spawning yet another set of social, political and economic concerns that further aggravate the already deteriorating living conditions of ordinary people in urban areas.

Indeed, the urban condition today seems untenable. The unabated rural migration to urban areas in search of greener pastures is stretching the limits of both national and local governments to provide more and more resources towards garbage disposal, health and sanitation, water and sewerage upgrading, traffic management, pollution control, flood control programs, and sidewalk vendors clearing, all because of this mistaken notion that the proverbial “pot of gold at the end of the rainbow” lies somewhere in the heart of the city.

Housing and Urban Development
And yet, we cannot even begin to discuss urban development and revitalization without recognizing that decent and affordable housing, or rather the lack of it, is a core issue. For the last ten years, beneficiaries of the National Shelter Program (NSP) numbered just under one million households.

That is why the housing need remains enormous. That is also why we have urban blight. Worse, while the middle-income class has gained access to housing under the NSP, the larger segment of the population composed of low-income earners and the urban poor who are supposed to be the main target beneficiaries still have very limited or no access at all to housing finance. And without the vital access, we can now begin to understand why a great number of our citizens continue to live in the depressing conditions that they do.

For all the government’s good intentions and intricate mechanisms, the impact of their programs has hardly been felt by intended beneficiaries. Informal settlements continue to mushroom and spread in the last 15 years, specifically in urban areas. Although housing conditions have improved in terms of water and toilet facility, decent housing for the urban poor households has lagged behind.

The Traditional Role of Developers
Over the years, private sector developers have increasingly been asked by government to participate actively in its shelter programs, thus emphasizing that the first and most traditional role of the private sector is to be a valuable partner for government-initiated shelter projects.

The government, through the National Housing Authority, implemented joint venture schemes with subdivision and housing developers for urban resettlement or socialized housing projects as full-pledged partners, and not just mere contractors as in the past.

Encouraged by the government, the involvement of NGOs with developers’ socialized housing and Community Mortgage Program (CMP) projects has likewise deepened, especially in the area of community organizing, development, and empowerment. Working in tandem with developers, they provide ways to address the issues on how best to deal with informal settlers in the most humane and peaceful manner, thus allowing developers to participate meaningfully in slum-upgrading and urban revitalization.

Also, more and more LGUs are entering into tripartite agreements with private developers that now includes, as the third important partner, urban poor associations, LGU Employees Unions or Housing Cooperatives, or some other group identified as the primary beneficiaries for local government housing.

New Directions
The prevailing sentiment is that home ownership is the only acceptable means towards decent and affordable housing. But home ownership has little to do with improving one’s quality of life and living standards. Indeed, we can build a case for a government-private sector partnership for the massive development of rental housing using medium-rise buildings (MRBs) under a build-operate-transfer scheme.

The concept is worth pursuing because it provides a win-win situation for everybody. The government wins because its idle land is developed using private sector resources under a rental subsidy scheme that is both quantifiable and finite. The developer wins because, through securitization, he realizes his income at the proper time. The beneficiaries win because they are able to move out of the slums to live in organized communities that are decent, clean, affordable, and near places of work or business. The local government also wins in the form of lower social costs attributed to the decrease in the number of slum dwellers.

But what is truly remarkable about the concept is that within the rental period, the beneficiary is expected to increase his family income to a point where his affordability now makes him ready to finally leave the rental unit, buy a house, and properly assume the responsibilities of amortizing a housing loan. Once that is done, the vacated rental units become available to the next batch of renter-beneficiaries, completing the cycle and perpetuating what we can easily describe as a permanent, never-ending urban revitalization process.

In the area of public infrastructure, the private sector can also be called on to directly manage and fund the maintenance and operations of public facilities like parks, museums, historical landmarks, and even public structures like schools, libraries, roads, bridges in exchange for corporate income tax credits. There is no actual decrease in tax revenues per se. They are merely allocated at its source in a much more efficient, cost-effective and, I dare say, graft-free manner.

Socialized Housing as Beneficiary-Based
Lastly, we need to redefine the concept of socialized housing from being package-based to beneficiary-based. Present rules under RA 7279 require developers a 20% socialized housing component in all housing projects. Unfortunately, the present interpretation restricts compliance building house and lot units to be sold at a maximum of P180,000.00, so that beneficiaries can avail of the lowest possible interest rate. But this puts constraints on the developer and the intended beneficiaries as well.

The underlying concept behind our advocacy for a shift to “beneficiary-based” framework is that the socialized housing beneficiary should be able to avail of the subsidized interest rate, not because he has chosen a P180,000 housing package, but because he is truly entitled to it, irregardless of the type and price of unit he wants to buy. We would honestly like to see a situation where a certified socialized housing beneficiary is allowed to buy a unit, for example, in an in-city MRB project, naturally priced higher than P180,000, and still qualify for the interest rate subsidy.

Working Together
Let me now end my presentation with a quote from one of the most influential architects of the 20th century, Frank Lloyd Wright, who said, “No man can beautify his life without beautifying the life of others. If you think that you can get away with it by something that you do for yourself, you’ve got to guess again, because it won’t work.”

This is why we have to put our heads and hands together to build a housing and urban development program that works for everybody, benefits everyone and excludes no one. The problem of urban decay is not just the problem for the government or the urban poor. In the final analysis, it is everybody’s problem. Because rich or poor, we live in the same environment, together with our children.