EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

>duced by Representative Rufus B. Rodriguez caren
3798

House Bill No.
EXPLANATORY NOTE

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
resettiement 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

RUFUS #. RODRIGURZ


EIGHTEENTH CONGRESS, )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus 8. Rodriguez
House Bill No. 3798

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


“1) “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 govemment
units, [or] 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 a


(i) 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:

(ii) DONATIONS TO THE SOCIAL HOUSING AND FINANCE
CORPORATION FOR Participation in the community mortgage
program;

(iii) 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);

¢) 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,