THE Department of Justice (DOJ) has cited legal infirmities in provisions of Department of Human Settlements and Urban Development (DHSUD) Order 2021-004, which reduces the required percentage of developers' participation in the Balanced Housing Development Program.
The program is mandated by Republic Act 7279, as amended by RA 10884.
The DOJ asserted in an opinion that incentivized compliance, while not expressly provided under RA 7279, is consistent with the object and purpose of the law.
“However, we noted that D.O. No. 2021-004 suffers from legal infirmities like the effective reduction of the required percentage of participation from the statutory minimum of 15 percent or 5 percent, as the case may be, to only 25 percent thereof,” the DOJ said.
The percentage of participation set under RA 7279 reflects a legislative determination of what constitutes a fair contribution by private developers to socialized housing, the DOJ said.
“By authorizing compliance below this standard, D.O. 2021-004, in effect, substitutes administrative discretion for legislative prerogative. While it may be argued that the nonsalable and nonrecoverable nature of incentivized compliance provides justification for the reduction, the statute itself makes no such distinction,” it said.
It emphasized that until Congress amends the law or expressly authorizes a different scheme, “the DHSUD cannot, through an administrative issuance, modify the prescribed percentage of participation or broaden the allocation of compliance funds.” Records show that earlier this year, the Chamber of Real Estate and Builders’ Associations Inc. (Creba) sought to reduce the incentivized compliance rate from 25 percent to 10 percent of the BHDP.
Creba said incentivized compliance is nonrecoverable.
“It functions as an upfront loss. A 10 percent cap preserved social housing funding while keeping projects financeable. Better 10 percent of many projects than 25 percent of none,” the group said in a statement.
The DHSUD said an order to comply with the DOJ ruling will be issued, noting that developers will be given enough time to comply.
