The Department of Justice (DOJ) has flagged a 2021 order of the Department of Human Settlements and Urban Development (DHSUD) for legal infirmities, saying it effectively reduced the required contribution of private developers to the government’s socialized housing program.
In a February 3 opinion, the DOJ cited problems in DHSUD Department Order No. 2021-004, which set guidelines for compliance with the Balanced Housing Development Program (BHDP) under Republic Act No. 7279, as amended by Republic Act No. 10884.
Under the law, private developers are required to allocate a portion of their projects—at least 15 percent for subdivisions or 5 percent for condominium developments—for socialized housing.
However, the DOJ said the 2021 department order effectively reduced that statutory requirement by allowing compliance equivalent to only 25 percent of the mandated share.
This, the Justice Department noted, amounted to an administrative modification of a percentage set by Congress.
DHSUD said it will issue a new department order aligned with the DOJ’s findings and give developers sufficient time to comply.
“The DHSUD remains committed to upholding the rule of law while sustaining programs that advance socialized housing for underprivileged and homeless families,” the agency said.
The DOJ opinion stated: “The percentage of participation set under RA No. 7279, as amended, reflects a legislative determination of what constitutes a fair contribution by private developers to socialized housing. By authorizing compliance below this standard, D.O. No. 2021-004, in effect, substitutes administrative discretion for legislative prerogative.”
The Chamber of Real Estate and Builders’ Associations had earlier sought to reduce the incentivized compliance rate from 25 percent to 10 percent of the BHDP, arguing that the compliance is non-recoverable and functions as an upfront loss for developers.
“A 10% cap preserved social housing funding while keeping projects financeable. Better 10% of many projects than 25% of none,” the opinion quoted.
While the DOJ reiterated in Opinion No. 37, s. 2024 that incentivized compliance—though not expressly provided under the law—is consistent with its objectives, it stressed that DHSUD cannot reduce or alter the participation percentage set by statute.
“Until Congress amends RA No. 7279, as amended, or expressly authorizes a different scheme, the Department cannot, through an administrative issuance, modify the prescribed percentage of participation,” the DOJ said.
