The Philippine Housing Industry Roadmap: 2012-2030 BOI PRESENTATION - PowerPoint PPT Presentation

The Philippine Housing Industry Roadmap: 2012-2030 BOI PRESENTATION By the Subdivision & Housing Developers Association, Inc. In Cooperation with

1 Roadmap I. Objectives & Roadmap Framework II. Internal Analysis • Economic Impact: multiplier effect, social benefits • Value Chain: prevailing positive and negative issues III. External Analysis • Factors in addressing the housing needs: production (supply-demand), affordability, policy, regulatory environment IV. Closing the Gap • Vision, Goals & Strategies • Summary & Conclusions

1 Roadmap Objectives & Roadmap Framework • What is the current status of housing need of the country? • How do we address the unmet housing needs of Filipinos? • How can institutions contribute in addressing these needs?

1 Roadmap Objectives & Roadmap Framework

1 Roadmap Objectives & Roadmap Framework Value Chain Best quality at least Cost, Scale, Improve quality of life Infrastructure and utilities Regulatory Support Technology Human resource Financial Institutions Upstream Downstream Marketing Planning Services Property Constr’n Others Sales & Land Mgt

1 Roadmap I. Objectives & Roadmap Framework II. Internal Analysis • Economic Impact: multiplier effect, social benefits • Value Chain: prevailing positive and negative issues III. External Analysis • Factors in addressing the housing needs: production (supply-demand), affordability, policy, regulatory environment IV. Closing the Gap • Vision, Goals & Strategies • Summary & Conclusions

1 Roadmap Internal Analysis P1.0 immediate impact + P0.97 from Production Sector + P1.35 Economic impact consumption-induced for every Job creation multiplier 2.30 jobs P-million For every Value creation multiplier 3.32 pesos Peso For every Household income multiplier 0.47 pesos peso For every peso paid in Tax multiplier (Indirect) 3.90 pesos taxes

1 Roadmap Internal Analysis Value Chain Analysis Positive Negative Regulatory BOI-ITH; Development permits delayed in LGUs; Increased transaction Costs • Enhances Affordability Proposed DHUD Conflicting local & national policies; • Improve productivity from improved passed on to buyers and Redundancy Govt oversight financing agencies Infra and IT Infra projects; Utilities cost absorbed by developers & • More sites gain access to urban areas IT facilities& software buyers; lack of drainage & sewerage; Increase production cost • Improvement of quality of life expensive software Human Availability of highly-skilled Fast turnover; brain drain • Ensures scalability and efficiency of Demand Overseas labor resource Benefits Larger Developers Housing Production Tax incentives; availability of BIR Rulings, Strict bank requirements; Financial Unpredictability of Govt • Facilitates Housing buying & Selling financing uncertainty of ITH; lack of funds for the programs discourages between qualified developers and poor; multiple taxation, pending DOF investment, leaves huge buyers house bill untapped Market

1 Roadmap Internal Analysis Value Chain Analysis Positive Negative Land Computerization of titling; land use Rising land prices; presence of informal Increased transaction Costs Security of Titles and efficient titling available in some areas; land for JV settlers; land conversion issues; lack of process result in land more readily passed on to buyers and CLUP available planning and development financing agencies Planning Availability of experts Incomplete CLUP’s Comprehensive masterplans, Creates instability, land shortages, services Innovative Designs high rawland prices New construction technologies; Increase in costs of other items; lack Construction Construction booms fuels Faster, Cost-effective, scalable inexpensive materials of qualified contractors; increase in production, facilitates business increase in demand and cost process labor costs of labor and raw materials Strong brand campaigns, Restrictive guidelines on selling & Sales & Access to Information promote competitive Limits capacity of an established environment benefitting buyers healthy competition marketing activities pool of brokers & Sellers marketing Presence of professional May lead to low collection efficiency, Absence of institutionalization of Property Enhances living experience of erosion of property values, homeowners property management estate management management deterioration of living experience Companies can tap into housing for CSR & Others HDMF, CSR of companies; Eviction process very tedious and Affects availability of Land for employee benefits; Mechanism for industry associations and NGOs slow; maceda law Stakeholders for consultation, partnership, productive use conflict resolutions

1 Roadmap I. Objectives & Roadmap Framework II. Internal Analysis • Economic Impact: multiplier effect, social benefits • Value Chain: prevailing positive and negative issues III. External Analysis • Factors in addressing the housing needs: production (supply-demand), affordability, policy, regulatory environment IV. Closing the Gap • Vision, Goals & Strategies • Summary & Conclusions

1 Roadmap External Analysis Factors needed to address housing need Need Production Affordability Financing Policy program framework

1 Roadmap External Analysis Housing need can reach 12.5-million in 2030 Source: Projections using SRTC framework; HUDCC

1 Roadmap External Analysis Housing Segments Interest Term* % Loan Segment Price Range **Rate (years) to Housing Price Socialized Housing below 400,000 4.5% 30 100% 4.5% 400,001 1,250,000 8.5% 30 90% Economic Housing Low Cost 1,250,000 3,000,000 10.5% 30 80% 3,000,000 6,000,000 10.5% 30 80% Mid Cost High End 6,000,000 above 10.5% 30 80% Source: SHDA; HUDCC *Term used based on blended average of actual availment **Prevailing Interest Rates used during Study

1 Roadmap External Analysis Matching housing cost with capacity to pay Source: FIES 2009 Source: SHDA; CRC

1 Roadmap External Analysis Housing Supply based on LTS issued

1 Roadmap External Analysis HOUSING DEMAND AND SUPPLY PROFILE 2001-2011 Market Segment Housing demand Surplus/ Housing supply Backlog – 3,087,520 (Households) (Deficit) Socialized Housing 1,143,048 479,765 (663,283) Economic Housing 2,503,990 541,913 (1,962,077) Low Cost Housing 704,406 242,246 (462,160) Mid Cost Housing 72,592 322,995 250,403 High End Housing 18,235 242,246 224,011 Excludes 832,046 households that can’t afford

1 Roadmap External Analysis NEW HOUSING NEED 2012- 2030 Market Segment Price Range Units Needed % Total Need 23.28 Can’t Afford/ Needs Subsidy 400k& below 1,449,854 25.41 Socialized Housing 400k & below 1,582,497 41.58 Economic Housing 400k-1.25m 2,588,897 9.73 Low Cost Housing 1.25m-3m 605,692 Mid Cost Housing 3m-6m No Need High End Housing >6m No Need TOTAL NEED 6,226,940 100.00 Total new need average: 345,941 housing units per year. * Based on ____________

1 Roadmap Those who can’t afford 832,046 TOTAL HOUSING Housing Backlog 2001- 3,087,520 BACKLOG as of 2011 2011 TOTAL 3,919,566 ESTIMATED BACKLOG BY 2030 IF NO SPECIAL HOUSING PROGRAM IS CREATED Particulars Units Per Number of Total Year Years Units Current Housing 3,919,566 Backlog New Housing Need 345,941 18 6,226,540 2012-2030 Housing Production 200,000 18 (3,600,000) Capacity Backlog by 2030 6,546,106

1 Roadmap External Analysis Regulatory Framework: Structure Financing arm SSS, HDMF, GSIS Direct Gov’t Gov’t general NHMFC housing Housing NHA (SHFC & production HUDCC programs BHFI) (EO 90 of 1987) Guarantee for Regulatory & HGC HLURB Gov’t housing quasi-judicial mortgages functions

1 Roadmap External Analysis Lessons from housing programs of selected countries Policy Support Malaysia Brazil Indonesia Thailand • Quality & • Rationalize • Upgrading of slum • Provide all affordable institutions & legal areas and houses necessary infra housing for sale or & regulatory of low-income support for rent framework for households housing projects housing – one • Housing for low- • Planning new sites • Slum upgrading central housing income & for housing and improvement agency informal settlers • Strengthen • Assistance to • Development of • One-shot capital institutions centralize housing formal housing subsidy responsible for agency finance market program delivery • Rehabilitation of • Comprehensive old houses & housing subsidy communities • Reduce barriers to formality of housing & services for the poor

1 Roadmap External Analysis Current policy regime inadequate to address growing housing deficits • Government subsidy programs failed to reach intended beneficiaries, particularly those who cannot afford • Private capital left out of the housing program. Government takes burden and risk of shouldering cost of housing program. • Meeting shelter needs based exclusively on ownership excluding other forms of shelter • Lack of estate management program • Relocation programs may have adversely affected livelihoods of the beneficiaries • Lack of structure and capability of government to monitor, collect and manage fund