‘HLURB’s elitist rules and why?’

American economist Murray L. Weidenbaun once made a study which showed that numerous zoning, land-use, building code and other government regulations on housing actually increased the cost of each new housing unit by thousands of dollars – and this was at a time when a lot of people could not afford the price of a home.

This is indeed true in our present situation. Government regulatory agencies use "public welfare" as the reason for increasing or changing rules and regulations. But do these regulations truly work for public interest? The irony is that for lack of thorough studies and consultations with all concerned sectors, some government regulations which are drawn up for the purpose of improving business and industry actually disrupt growth and intervene with productive endeavors.

Of particular concern to the housing industry at present are some of the revised rules and regulations of the Housing and Land Use Regulatory Board or HLURB, the sole regulatory body for housing and land development. Recently, it came up with revised implementing rules and regulations (IRRs) for BP 220, PD 957 and related laws. BP 220 authorizes the HLURB to set minimum standards for socialized and low cost housing projects.

I will be citing a number of these revised IRRs which the Chamber of Real Estate and Builders’ Associations views as "elitist," and baseless, unrealistic, arbitrary or unjust.

Twenty percent actual project completion as a requisite to the issuance of license to sell. This has no basis under PD 957 and BP 220. It is elitist in nature as only the biggest conglomerates in the housing industry would be able to pursue land and housing development projects under this regulation.

In effect, this IRR "frowns" on pre-selling which is a scheme that has worked well for the mutual advantage of both developer and buyer. Pre-selling enables the developer to reduce borrowing, thereby cutting down on interest expense and other financing costs. These savings are passed on to the buyer in the form of a lower selling price of a house package.

HLURB can protect the buyers better by enforcing the performance bond requirement more strictly and exercising its power to forfeit or take over a project from delinquent or unscrupulous developers.

Price ceiling. The HLURB cannot and should not intervene in the pricing of lots and/or house-and-lot packages under BP 220 for the simple reason that one, there is no law that empowers HLURB or any other government agency to do so, and two, the selling price should be what the seller and the buyer mutually agree upon.

There are price ceilings under the government’s homelending program, but these are applicable only to projects enrolled for funding under this program. The HLURB cannot set price ceilings indiscriminately as this act runs contrary to the principle of free enterprise.