FACT: Housing is a key part of the urban economy Housing production is a major

economic activity in most cities. Building housing not only produces the economic
asset of the housing unit itself, but it creates all sorts of secondary economic
activities: laborers get employment and then spend their earnings locally, materials
purchased in the city support industries and supply businesses, and new housing
attracts further investment in the areas where it is built, and tends also to increase
nearby land values. Investment in housing accounts for between 2% and 8% of GNP
and up to 30% of gross capital formation in developing countries. As an asset,
housing is even more important, as it accounts for between 20% and 50% of the
private asset wealth in most countries. House-ownership is a major motivation for
household saving and significantly influences household consumption. In addition,
housing affects inflation, labour mobility and the balance of payments, as well as
government budgets through taxes and subsidies.
1. Households with modest means need safe, suitable housing that they can
afford. When housing
is affordable, low- and moderateincome families are able to put nutritious
food on the table, receive necessary medical care, and provide reliable
daycare for their children. Research has shown that the stability of an
affordable mortgage or rent can have profound effects on childhood
development and school performance (Lubell and Brennan 2007) and can
improve health outcomes for families and individuals
the development of affordable housing increases spending and employment in the
surrounding economy, acts as an important source of revenue for local
governments, and reduces the likelihood of foreclosure and its associated costs.
Without a suffi cient supply of affordable housing, employers and entire regional
economies can be at a competitive disadvantage because of their subsequent
diffi culty attracting and retaining workers. In addition to these proven linkages
between affordable housing and economic development,
During the construction of affordable housing or any kind of housing, for that
matter the local economy benefi ts directly from the funds spent on materials,
labor, and the like.

1. The enactment in the nineties of the Urban Development and Housing Act (UDHA) of
1992 and the Comprehensive Shelter Finance Act (CISFA) of 1994, two pro-poor
housing legislations, greatly changed the Philippines policy on housing the poor.
From a highly centralised and heavily subsidised policy, the government moved to a
market-oriented and participatory approach to housing. Despite these reforms, the
problems with UDHA and CISFA have not delivered housing on the scale or of the
quality that is required.
The National Shelter Program (NSP), which regulates housing production, regulation
and financing, is the Philippines banner program for low-income housing
provision.The NSP divides housing into socialized (valued at less than USD 6,000,

targeted at households up to the 30th income percentile) and economic housing

units (valued at up to USD 40,000, targeted at households up to the 50th income
percentile).
Current housing efforts remain inadequate, with figures showing an acute housing
shortage estimated at over one million units still probably a gross underestimate.
On average, the NSP has only delivered 26 per cent of its target, or less than 10 per
cent of total housing need. Moreover, the housing backlog is likely to worsen,, due to
worsening poverty and increasing urbanisation.
Sixth, housing finance programs have limited outreach. For example, the Social
Housing Finance Corporations Community Mortgage Program has been helpful, but
lacks sufficient funding to expand operations. On the other hand, the Home
Development Mutual Funds Socialized Loan Program, geared towards salaried
workers, has not greatly benefited the poor
2. Other solutions to help housing problems
establishing a national resettlement policy will ensure a common framework for
resettlement approaches, housing packages, and entitlement. NHAs role as lead
agency should be strengthened, with funds from the various resettlement agencies
integrated into a common fund.
Second, a system of incentives should encourage and capacitate LGUs to perform
their roles in shelter as identified in the UDHA. LGUs and the national police should
also be empowered to more effectively curtail squatting syndicates.

he Philippine government should develop a public-private partnership as a

key strategy to resettlement projects. The tax incentive scheme for shelter
needs to rationalised and made more responsive. At the same time, the
government must increase public expenditure on housing, ensuring that the
subsidy scheme is transparent and well-targeted.
the government must ensure the financial health of state-owned housing
finance institutions, and encourage the entry of housing microfinance
institutions, including foreign-based microfinance. Scale and sustainability will
only come through through developed capital markets, not continuously
using government funds. On the demand side, government should try to
improve the bankability of the poor through community and livelihood
development programs.

3. What we really need are jobs for people. However, there is also problem with
culture. We have what they call as professional informal dwellers. They
occupy a property and require payment they vacate but move to another
area to do the same thing. People should not be paid to vacate a place but

move to a new area where they will improve their lives. For people to stay
there has to be jobs.