SEVENTEENTH CONGRESS __),
REPUBLIC OF THE PHILIPPINES }
Second Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.

“7641

EXPLANATORY NOTE

House Bill No.

The 1987 Constitution, particularly Section 9 of Article XIll, mandated the State to
undertake, in cooperation with the private sector, a comprehensive and continuing program of
urban land reform and housing that would make decent housing and basic services available at
affordable cost to under privileged and homeless citizens in "urban areas and resettlement
areas.” In March 1992, Congress enacted Republic Act No. 7279, otherwise known as the
“Urban Development and Housing Act” or UDHA to put flesh to this Constitutional mandate.
UDHA required all proponents or developers of residential subdivision projects to develop an
area for socialized housing equivalent to at least twenty percent of the total subdivision area or
project cost, at the option of the developer.

For more than two decades from the enactment of UDHA into law, however, most of the
socialized housing compliance produced by private developers have been outside the urban
areas and not within urban areas as primarily mandated by the constitution and UDHA. This
resulted to the current huge housing crisis in informal settlements in Metro Manila and other
highly urbanized areas, which requires changes in policies to speed up the implementation of
housing for the underprivileged, particularly the informal settler families. Hence, amendments to
R.A. 7279 are hereby proposed as follows:

1. Considering the very high cost of land in urban areas, this bill proposes the
introduction of direct subsidy to price down the socialized housing cost affordable to
informal settler families. The current socialized housing price ceiling of Php
450,000.00 is set and adjusted periodically by the Housing and Urban Development
Coordinating Council and the National Economic Development Authority. This direct
subsidy shall be provided primarily by the government from budgetary allocation and
partly from private sector donations (as also proposed to be introduced in this bill) to
NGOs/Foundations or to any of the housing agencies engaged in the delivery of
socialized housing services to informal settler families,

2. To optimize the utilization of the high cost of urban land, this bill proposes the
recognition by government of residential condominiums in the form of medium rise
buildings up to five levels as acceptable and preferred alternative in the production and
delivery of socialized housing compliance by private developers.

3. To fast track the production and delivery of socialized housing to all
intended socialized housing beneficiaries particularly within urban areas, the extension
of fiscal incentives to private developers such as exemptions from project related income
tax, value added tax, donor's tax, among others, is proposed by amendment in this bill to
be facilitated without undue delay by the Bureau of Internal Revenue (BIR). In this
regard, the application for availment of such fiscal incentives by developers is proposed


to be acted upon by the BIR within a maximum period of thirty working days from
submission of complete documents.

Finally, this bill seeks to amend certain definitions of terms in order to minimize conflicts
in interpretation and to ensure that the benefits of affordable socialized housing is redirected to
the most needy, the underprivileged and homeless citizens within urban centers referred to as
the urban poor or informal settler families.

In view of the foregoing explanations, approval of this bill is earnestly sought.

vl ce JR.


‘SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
)

Second Regular Session
HOUSE OF REPRESENTATIVES
Introduced by Representative Maximo B. Rodriguez, Jr.
House BillNo, 7641
AN ACT

AMENDING REPUBLIC ACT NO. 7279, ENTITLED URBAN DEVELOPMENT AND HOUSING
ACT OF 1992, ESTABLISHING THE PROGRAMS AND MECHANISMS TO ENSURE THAT
SOCIALIZED HOUSING UNITS PRODUCED ARE RE-DIRECTED TOWARDS ITS PRIORITY
BENEFICIARIES PARTICULARLY THE UNDERPRIVILEGED HOMELESS IN HIGHLY
URBANIZED AREAS REFERRED TO AS INFORMAL SETTLER FAMILIES WHICH HAVE
REMAINED WITHOUT BENEFIT UNDER RA 7279 EVEN AFTER MORE THAN TWENTY
YEARS OF ITS IMPLEMENTATION

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SEC. 1. Short Title. - This act shall be known as the “Inclusive Socialized Housing Act ’

SEC. 2. Amendatory Provisions. — For purposes of this Act, certain provisions of Republic Act
7279, entitled: "An Act to Provide for a Comprehensive and Continuing Urban Development and
Housing Program, Establish the Mechanism for its Implementation, and for other Purposes,” are
hereby amended to make socialized housing more pro-poor and more relevant to the
affordability of homeless and underprivileged families living in informal settlements within highly
urbanized areas as follows:

1. Article |, Section 2. is amended to read as follows:

“Section 2. Declaration of State Policy and Program Objectives. — It shall be the
policy of the State to undertake, in cooperation with the private sector, a
‘comprehensive and continuing Urban Development and Housing Program,
hereinafter referred to as the Program, which shall:

a) Uplift the conditions of the underprivileged and homeless citizens in HIGHLY
{urban] URBANIZED OR URBANIZABLE areas and in resettlement areas by
making available to them decent housing at affordable cost, PROVIDING FOR
THE PURPOSE, A CONTINUING GOVERNMENT DIRECT AND INDIRECT
SUBSIDY PROGRAM FROM ANNUAL BUDGETARY ALLOCATION
PARTICULARLY FOR URBAN POOR INFORMAL SETTLER FAMILIES, basic
services, and employment opportunities;”

2. Article |, Section 3 (a) is amended to read as follows:
“Section 3. Definition of Terms - For purposes of this Act :
a) “Affordable cost” refers to the most reasonable price of land and shelter based
‘on the needs and financial capability of Program beneficiaries and appropriate
financing schemes REALIZED BY WAY OF GOVERNMENT DIRECT OR
INDIRECT SUBSIDY TO PRICE DOWN THE COST OF SOCIALIZED


HOUSING UNITS AND LOWER THE MONTHLY AMORTIZATION
AFFORDABLE TO PROGRAM BENEFICIARIES,”

3. Article |, Section 3 (r) is amended to read as follows:

“t) “Socialized housing’ refers to housing programs and projects covering houses
and lots, home lots only OR RESIDENTIAL CONDOMINIUM UNITS undertaken
by the Government or the private sector for the underprivileged and homeless
citizens WITH SELLING PRICES SET AT LOWER LEVELS FOR HOUSES AND
LOTS OR LOT ONLY AND AT HIGHER LEVEL FOR CONDOMINIUM UNITS IN
URBANIZED AREAS AS DETERMINED EVERY THREE (3) YEARS BY THE
HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL AND
THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY, which shall
include sites and services development, long-term financing, liberalized terms on
interest payments, and such other benefits in accordance with the provisions of
this Act;”

4. Article |, Section 3 (t) is amended to read as follows:

“t) Underprivileged and homeless citizens” refers to the beneficiaries of this Act
and to individuals or families residing in HIGHLY URBANIZED [urban] and
urbanizable areas INCLUDING INFORMAL SETTLERS whose income or
combined household income falls within the poverty threshold as defined by the
National Economic and Development Authority and who do not own housing
facilities. This shall include those who live in makeshift dwelling units and do not
enjoy security of tenure;”

5. Article 1, Section 3 (y) is added to read as follows:
y) "COST OF RAW LAND" - REFERS TO THE ZONAL VALUE OF THE RAW
LAND PREVAILING AT THE LOCALITY AT THE TIME OF APPLICATION OF
LICENSE TO SELL FOR THE SUBDIVISION PROJECT.

6. Article V, Section 18 is amended to read as follows:

“Sec. 18. Balanced Housing Development. - The Program shall include a system
to be specified in the Framework plan whereby developers of proposed
subdivision projects UNDER PRESIDENTIAL DECREE 957 shall be required to
DIRECTLY INVEST IN ITS OWN PROJECT THE [develop] DEVELOPMENT OF
an area for socialized housing equivalent to at least twenty percent (20%) of the
total LAND subdivision area or total subdivision LAND AND LAND
DEVELOPMENT project cost, at the option of the developer, within ANY
RESIDENTIAL ZONE IN THE COUNTRY [the same city or municipality,
whenever feasible], and in accordance with the standards set by the Housing and
Land Use Regulatory Board and other existing laws. The balanced housing
development as herein required may also be complied with by the developers
concerned in any of the following manner:
a) BY WAY OF INVESTMENT EQUIVALENT TO AT LEAST TWENTY
PERCENT (20%) OF THE TOTAL LAND SUBDIVISION AREA OR TWENTY
PER CENT (20%) OF TOTAL SUBDIVISION LAND AND LAND
DEVELOPMENT PROJECT COST, AT THE OPTION OF THE DEVELOPER
AND SUCH INVESTMENT SHALL BE APPLICABLE TO:

(i) Joint-venture projects with [the] ANY OF the local government units,

for] any of the housing agencies OR ANY SOCIALIZED HOUSING

DEVELOPER ACCREDITED BY THE HLURB,


(i IN SOCIALIZED HOUSING BONDS ISSUED TO THE DEVELOPER
BY ANY OF THE HOUSING AGENCIES AS AUTHORIZED BY THE
HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL;

b) BY WAY OF DONATION EQUIVALENT TO TEN PER CENT (10%) OF THE

TWENTY PERCENT (20%) OF THE MAIN SUBDIVISION LAND AND LAND

DEVELOPMENT PROJECT COST, AND SUCH DONATION SHALL BE

APPLICABLE TO:

() DONATIONS TO THE NATIONAL HOUSING AUTHORITY FOR Slum
upgrading or renewal of areas for priority development either through
zonal improvement programs or slum improvement and resettlement
programs;

(i) DONATIONS TO THE SOCIAL HOUSING AND FINANCE
CORPORATION FOR Participation in the community mortgage program;
(ii) DONATIONS TO ANY LOCAL GOVERNMENT UNIT OR
DEPARTMENT OF EDUCATION FOR THE CONSTRUCTION OF
PUBLIC SCHOOL BUILDINGS AND RELATED EDUCATIONAL
FACILITIES;

(iv) DONATIONS TO ANY NON-GOVERNMENT ORGANIZATION (NGO)
OR FOUNDATION ENGAGED IN THE DEVELOPMENT OF
SUBSIDIZED SOCIALIZED HOUSING PROJECTS FOR THE
UNDERPRIVILEGED AND HOMELESS, PROVIDED SUCH NGOS OR
FOUNDATIONS ARE DULY ACCREDITED/ CERTIFIED BY THE
DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT,
PHILIPPINE COUNCIL FOR NGO CERTIFICATION AND THE
HOUSING AND LAND USE REGULATORY BOARD.

7. Article V, Section 20 is amended to read as follows:
“Section 20. Incentives for Private Sector Participating in Socialized Housing. -
To encourage greater private sector participation in socialized housing and
further reduce the cost of housing units for the benefit of the underprivileged and
homeless, the following incentives shall be extended to the private sector :

a) Reduction and simplification of qualification and accreditation requirements for
participating private developers;

b) Creation of one-stop offices in the different regions of the country for the
processing, approval and issuance of clearances, permits and licenses:
Provided, That clearances, permits and licenses shall be issued within THE
PERIOD PRESCRIBED UNDER EXECUTIVE ORDER NO. 45, SERIES OF
2001, ENTITLED: “PRESCRIBING TIME PERIODS FOR ISSUANCE OF
HOUSING RELATED CERTIFICATIONS, CLEARANCES AND PERMITS, AND
IMPOSING SANCTIONS FOR FAILURE TO OBSERVE THE SAME” AND
UNDER THE APPLICABLE PROVISIONS OF REPUBLIC ACT NO. 9485,
OTHERWISE KNOWN AS THE “ANTI-RED TAPE ACT OF 2007”; [ ninety (90)
days from the date of submission of all requirements by the participating private
developers];

c) Simplification of financing procedures; and

d) Exemption from the payment of the following:

1) Project-related CORPORATE OR income taxes, INCLUDING CREDITABLE
WITHHOLDING TAX (CWT) ON INCOME DIRECTLY REALIZED FROM
DEVELOPMENT AND IMPROVEMENT OF SOCIALIZED HOUSING SITES,
SLUM AREAS, RESETTLEMENT AREAS, AND/OR CONSTRUCTION AND
SALE OF SOCIALIZED HOUSING TO QUALIFIED BENEFICIARIES ;


2) Capital gains tax OR VALUE ADDED TAX AND CREDITABLE
WITHHOLDING TAX on raw lands used for the project;

3) Value-added tax for the project [contractor] concerned;

4) Transfer tax for both raw and completed projects; and

5) Donor's tax for both lands certified by the local government units to have been
donated for socialized housing purposes.

Provided, that upon application for CERTIFICATE AUTHORIZING
REGISTRATION (CAR) [exemption] WITH THE BUREAU OF INTERNAL
REVENUE (BIR), FOR INDIVIDUALLY TITLED/DEVELOPED LOTS, THE
SUPPORTING DOCUMENT REQUIRED SHALL BE A COPY OF THE MOTHER
TITLE/S COVERING THE RAWLAND WITH LIEN ANNOTATED THEREIN
THAT THE RAWLAND SHALL BE DEDICATED TO THE DEVELOPMENT OF A
SOCIALIZED HOUSING PROJECT. ON THE OTHER HAND, UPON
APPLICATION FOR A CERTIFICATE AUTHORIZING REGISTRATION WITH
THE BIR FOR RAWLAND COVERED BY MOTHER TITLE/S, THE
SUPPORTING DOCUMENT REQUIRED SHALL BE A NOTARIZED
UNDERTAKING BY THE APPLICANT DEVELOPER THAT THE RAWLAND
SUBJECT OF THE APPLICATION SHALL BE DEDICATED TO THE
DEVELOPMENT OF A SOCIALIZED HOUSING PROJECT AND SUCH SHALL
BE ANNOTATED AS A LIEN ON THE LAND TITLE UPON TRANSFER IN THE
NAME OF THE DEVELOPER, PROVIDED FURTHER THAT IN BOTH OF THE
FOREGOING CASES, THE BIR SHALL ACT TO APPROVE OR DISAPPROVE
THE APPLICATION WITHIN A MAXIMUM PERIOD OF THIRTY (30) DAYS
FROM DATE OF RECEIPT OF THE APPLICATION. IF DISAPPROVED, A FULL
EXPLANATION IN WRITING SHALL BE INDICATED IN THE LETTER OF
DISAPPROVAL. FAILURE TO ACT ON SUCH APPLICATIONS WITHIN THE
PRESCRIBED PERIOD OF TIME SHALL SUBJECT THE RESPONSIBLE
OFFICER OF THE BIR TO SANCTIONS AS PRESCRIBED UNDER THE ANTI-
RED TAPE ACT AND ITS IMPLEMENTING RULES AND REGULATIONS.

SEC. 3. Implementing Rules and Regulations. - Within sixty (60) days from the effectivity of this
Act, the Housing and Land Use Regulatory Board shall promulgate the appropriate
Implementing Rules and Regulations necessary to effectively implement the provisions of this
Act.

SEC. 4. Separability Clause. - If for any reason, any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue to be valid and in

full force and effect.

SEC. 5. Repealing Clause. - All laws, decrees, executive orders, proclamations, rules and
regulations, and other issuances, or part or parts thereof, which are inconsistent with the

provisions of this Act are hereby repealed or modified accordingly.

SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after the completion of its

publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,