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  • Writer's pictureZiggurat Realestatecorp

Housing crisis — A ticking time bomb

“The toughest disincentive to the homebuilders is the acute scarcity of available real estate for housing."


In the 1800s, when the Philippines had a population of 1.89 million living in traditional “bahay kubo” homes iconic to Philippine culture, housing and shelter shortages were unheard of.


Today with 119.1-million Filipinos, a staggering increase of 6,300 percent, we face a housing crisis with a shortage of 6.5-million homes, projected to rise to 22.0 million by 2040. Behind these numbers lie millions of families enduring substandard living conditions in shelters that can hardly be called home.


Various studies conducted by reputable housing development associations attribute this shortage to rapid population growth, urbanization, a surge in informal settlers, limited availability of land for housing, outdated construction processes, slow permit processes, inadequate financial support to developers, high financial costs, low returns, and a myriad of other unsettling challenges plaguing the housing industry.


The toughest disincentive to the homebuilders is the acute scarcity of available real estate for housing which is a finite supply currently estimated at ₱305 trillion and growing.


The Home Development Mutual Fund, popularly known as Pag-IBIG Fund, was established in 1978 with two mandates: first, to assist in providing affordable decent shelter, and second, to generate savings for its members.


The Fund was given the herculean task of assisting all its members to build a home through socialized housing loans.


Pag-IBIG has performed exceptionally well in reducing the housing backlog since its creation with an impressive record in the past three years of releasing housing loans totaling ₱341 billion to build 297,000 units.


However, the housing gap reported at 6.5-million units as of end 2023 prompted PBBM to order Pag-IBIG to accelerate its program by financing one million houses per year until the end of his term.


But the huge housing backlog even before Pag-IBIG was created and the rapidly expanding population will keep the housing shortage a continuing national concern.

This dire housing situation poses a serious threat to the nation’s security and stability, which can only exacerbate the divide between the underprivileged homeless and the affluent homeowners.


Given this, there is a risk the homeless may turn to ideologies like socialism, viewing Karl Marx’s classless society as more desirable than capitalism.


Neglecting the housing crisis could lead to widespread homelessness, forcing families to live on the streets or in inadequate, overcrowded, and unsafe conditions, accentuating further the social inequality and potentially sparking political disorder and social unrest.


Further, the housing shortage will have broader economic implications, affecting employment, consumer spending, and economic growth.


Some experts in the housing industry propose solutions such as rethinking government’s role in housing finance, delinking housing social assistance from finance markets, and addressing fundamental supply side and urban governance issues.


But with our freewheeling and disharmonious multiparty political system where the economic agenda is subordinate to other less meritorious plans, there is always the bleak prospect the housing crisis will just be overlooked in the halls of power.


Time is of the essence in addressing the housing problem, and while we may not have the luxury of solving it overnight, we need to demonstrate to future generations that beginning today we are earnestly committed to providing decent homes for all of our countrymen.


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