Housing problem

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January 28, 2026 | 12:00am

In a developing economy like ours with limited capital resources, the government and the private sector should be coordinating investments to produce the biggest return for the country and the economy. Investments must produce the greatest social benefits, not just private profits.

Our property sector is a good example of too much laissez faire allowing our short-sighted elite to aim for short-term gains regardless of what society and the economy needs.

The luxury segment of the market was patronized by the ultra-rich who needed to park their excess money somewhere. The corrupt politicians, DPWH engineers and their favorite contractors also parked their loot in high-end condos.

But there is a lack of affordability of condo units supposedly directed at the middle market. That’s because Metro Manila condominium prices rose by nearly 300 percent (specifically 296 percent–303 percent) between 2015 and 2024, while average family incomes increased by only about 21 percent.

This widening gap led to a significant affordability crisis, resulting in over 70,000-80,000 unsold or vacant condo units as of 2024-2025.

The excess inventory is largely inaccessible for average Filipino households. Property developers are hoping they can clear their inventory over the next three years or more.

A post on Facebook by Pinas Pulse points out a paradox: a high demand for housing but thousands of empty units. These ghost towers are a sign of serious misallocation of land, capital and infrastructure, an outright waste our economy cannot afford.

As Pinas Pulse puts it, “while entire floors sit dark at night, informal settlers remain in danger-prone areas; renters face constant price increases; young professionals are locked into permanent renting and families are pushed farther away from jobs and schools.”

In a more ideal world, the government should have started to regulate the property sector more seriously years ago. We have a housing backlog of over six million units and the government’s efforts to address the problem through the years had been feeble in proportion to the challenge.

Left on its own, our property sector has resisted market forces that should have made them lower prices to match local purchasing power and demand. Many developers choose to hold units off the market rather than give deep discounts to make them affordable. They prefer to wait out the slump.

This is why as I said, it is time for the government to act. If average earners can no longer afford homes in their own country, reform is unavoidable. It may be necessary to cap foreign-driven and corruption-driven speculation that distorts prices. And moderate the greed of developers for quick big profits at the expense of social good.

Pity middle-income Filipinos who are too “rich” for social housing but not wealthy enough to buy the inflated cost of condo units being built. They must endure long drives and heavy traffic every working day.

Our government focused on the optics of “development” such as 60-floor condo towers when it should have imposed penalties when projects sit empty.

Vacancy taxes or occupancy requirements should have been imposed to make developers think through their projects better. Right now, the system rewards asset storage, not housing use.

In Metro Manila, oversupply did not lead to lower prices because banks restructured loans instead of forcing developers to sell and LGUs don’t see a problem because they still collect taxes even if units are empty.

When I posted the Pinas Pulse write-up, my friend Peter Angliongto made a very insightful comment on what’s wrong with the government’s approach to housing.

“Housing is not necessarily home ownership. It is just affordable living within a reasonable lifestyle. In many advanced economies, they don’t even have home ownership, they rent. The solution using affordable rentals should be pushed.

“Incentives could be made for bigger developers to do this and encourage capital market solutions so they can stay within the bandwidth of market expectations. We just need to push the big boys to do it. The top 10 developers can easily produce up to a million units of between 30 and 50 sqm between them within GMA, near new train lines within their townships.”

Gerry Choa, a successful property developer and a colleague at the Foundation for Economic Freedom isn’t one of the big boys but he had been working on something along the lines proposed by Peter.

“I think the housing model should be viewed principally as poverty alleviation to work. Home ownership is not the need of the poor urban settlers, just as land ownership in agrarian reform simply makes the poor even poorer.”

The mismatch of their income earning capability to their living expenses is the issue of poverty, Gerry explains. Rental housing near where jobs are available allows better income generating activities while reducing cost of living.

Gerry is testing a public rental housing model in his development in Tanza, Cavite. A good rental housing project, Gerry explains, should be able “to intervene on both ends of the equation… providing better income generating opportunities while reducing the cost of living.”

Gerry is putting his money where his mouth is and is constructing a proof-of-concept project in Cavite. He hopes to open by 3Q. He is working on a P3,500 monthly rent with five percent annual increment.

Gerry’s project includes a BRT franchise, a PPP between the province of Cavite and the joint venture of Megawide and Gerry’s company. The BRT line will connect Kawit, Imus, General Trias, Tanza, and Trece Martires. It has feeder systems linking to most parts of Cavite.

Shame on the Big Boys of the property sector. If they had an iota of social conscience in their business models, they should have done a long time ago what Gerry is trying to do now. Their CSR projects are meaningless, mere PR efforts massaging their corporate egos if their main business is not socially relevant for the people of this country.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco