Partnership boosts socialized housing
The public-private partnership (PPP) could help the government’s socialized-housing program succeed and, at the same time, benefit Filipinos who belong to the bottom of the pyramid through inclusive growth, said an executive of a property developer that pioneered in the development of economic housing.
Willie Uy, Phinma Properties president and chief executive officer, said the PPP can link up the components and stakeholders of the housing program. He stressed that the underlying problem of socialized housing is that the proponents could not agree on terms, and did not work together.
“Profit margins were understandably low in such ventures, and the process is so complicated that a single misstep could jeopardize the entire effort. Everything, from expensive construction and restrictive price ceilings to the property owner wanting to evict the ISFs [informal-settler families], rendered socialized housing as a business unfeasible, much like a broken wheel missing its spokes. With this in mind, Phinma Properties entered into a PPP with the local government of Quezon City that would result in our socialized-housing program, Bistekville II,” said Uy in his recent address at the Fifth Business Call to Action (BCtA) held in New York City.
Phinma Properties Inc., the property development arm of the Phinma group, led by Chairman Ramon del Rosario Jr., was recognized for its inclusive business practices by the BCtA. Other Filipino speakers in the forum were Rafael Lopa, executive director for the Philippine Business for Social Progress; and Mark Ruiz, managing director of Hapinoy.
BCtA is a global leadership platform for companies committed to inclusive business and is hosted by the United Nations Development Programme.
In partnership with the local government of Quezon City and non-governmental organizations, Uy said Phinma developed Bistekville II for an ISF community in Quezon City occupying privately owned land. As agreed with the landowner, Uy said Phinma bought a portion of the land from the landowner as the development site.
With Phinma’s proprietary “cast in place” construction method, construction was significantly faster and at lesser cost. “We were able to construct affordable and decent housing units to be sold to participating families for only $10,100, which is payable in 30 years, significantly more reasonable compared to industry prices using conventional methods,” Uy said.
Meanwhile, the LGU waived the permit and license fees for the development, and coordinated with other relevant government agencies. The LGU also conducted preliminary consultations with the ISFs regarding the project.
For the families who volunteered to be beneficiaries, the LGU provided some financial assistance. As far as the people who chose to return to their home provinces, the existing government programs provided assistance in their departure. The LGU also handled estate management, educating the new homeowners about the house rules and regulations for maintenance and management of the project.
With the help of the LGU, government financing institutions such as the Home Development Mutual Fund and the Social Housing Finance Corp. also became major players in the project. “Through their assistance, the ISFs could apply for housing loans to help pay for their new homes, with as little as $51 per month and payable in 30 years. Through the families’ amortizations, the government is able to collect real-property tax,” Uy said.
“Through the cooperation of all proponents and stake holders, we fixed the broken wheel and made it turn. Bistekville II ultimately proved a success with 556 ISF families moved in to date, all the units already having beneficiaries and the project expected to be completed this month. Perhaps the project’s most significant value for the families was the quick turnover and its location near their jobs and livelihood; a true “in-city” relocation, one of the first of its kind in the country. The local government is able to collect tax from the families, and their now permanent residences and increased job opportunities solves the issues of illegal settlements,” Uy said.
Source: Rizal Raoul Reyes, Business Mirror, October 21, 2014