Condo builders to lose perks

The Board of Investments plans to remove the fiscal incentives granted to high-rise housing and condominium development projects from the annual Investment Priorities Plan for failing to address the country’s housing backlog.

Trade Undersecretary and BoI managing head Elmer Hernandez said the agency was reviewing the incentives as part of an overall audit to determine if housing projects registered with the agency had served the intended beneficiaries.

The BoI was deluged last year with applications of property developers for incentives that translated into a cost reduction of at least P50,000 per unit. The discount would have made units more affordable to a bigger segment of the population.

Hernandez said the government continued to support mass housing projects but cited the need to review them.

“Do they still need incentives? We have to balance that in the sense that government wants to address backlog in housing and incentives to subsidize it. The intention was to provide workers living outside of Metro Manila affordable housing. But is that what happened? Did those projects actually serve the intended beneficiaries?” Hernandez asked.

A number of high-rise projects in Metro Manila secured incentives after the developers classified certain units as mass housing. These projects are being developed by big developers such as the SM Development Corp., Robinsons Land Corp. and DMCI Properties.

Developers in return for the incentives must allocate 20 percent of the entire development for socialized housing to help address the country’s backlog estimated to hit over 3.5 million by 2010.

But since the cost of land in Metro Manila is high, the P3-million cap set by government for low-cost housing could only afford a studio unit with very limited floor area.

The BoI, meanwhile, will continue granting incentives to horizontal housing projects as most of them are located outside Metro Manila and are more affordable. –Elaine Ramos Alanguilan, Manila Standard Today