Urban Dev't and Housing Act of 1992

State policy and program objectives

The State must undertake, in cooperation with the private sector, a comprehensive and continuing Urban Development and Housing Program (“Program”) (Section 2).
The Program must uplift underprivileged and homeless citizens in urban areas and in resettlement areas by making available decent housing at affordable cost, basic services, and employment opportunities (Section 2).
The Program must promote rational use and development of urban land to achieve equitable utilization of residential lands in urban and urbanizable areas, prioritizing the underprivileged and homeless rather than market forces (Section 2).
The Program must optimize productivity of land and urban resources and develop urban areas conducive to commercial and industrial activities that generate economic opportunities (Section 2).
The Program must reduce urban dysfunctions that adversely affect public health, safety and ecology, and expand access to land and housing by the underprivileged and homeless (Section 2).
The Program must adopt workable policies to regulate and direct urban growth toward a dispersed urban net and more balanced urban-rural interdependence (Section 2).
The Program must provide an equitable land tenure system guaranteeing security of tenure to Program beneficiaries while respecting rights of small property owners and ensuring payment of just compensation (Section 2).
The Program must encourage effective people’s participation and improve the capability of local government units (LGUs) in urban development and housing programs and projects (Section 2).

Key definitions and terms

“Affordable cost” means the most reasonable price of land and shelter based on the needs and financial capability of Program beneficiaries and appropriate financing schemes (Section 3).
“Areas for priority development” means areas declared as such under existing statutes and pertinent executive issuances (Section 3).
“Blighted lands” means areas where structures are dilapidated, obsolete and unsanitary, depreciating land value and preventing normal development and use (Section 3).
“Consultation” means the constitutionally mandated process whereby the public, on their own or through people’s organizations, is given opportunity to be heard and participate in decision-making on matters protecting and promoting legitimate collective interests, including documentation and feedback mechanisms (Section 3).
“Idle lands” are non-agricultural lands in urban and urbanizable areas where no improvements have been made by the owner, as certified by the city, municipal or provincial assessor (Section 3).
“Improvements” include buildings, residential units, walls, fences, structures or fixed-character constructions adhered to the soil, excluding trees, plants, growing fruits, and other fixtures that are mere superimpositions; the value of improvements must not be less than fifty percent (50%) of the assessed value (Section 3).
“Joint venture” is a commitment by two (2) or more persons to carry out a specific business enterprise for mutual benefit by combining funds, land resources, facilities and services (Section 3).
“Land assembly or consolidation” means acquisition of lots with varying ownership by purchase or expropriation for planned and rational development and socialized housing programs without individual property boundary restrictions (Section 3).
“Land banking” means acquisition of land at values based on existing use in advance of actual need to promote planned development and socialized housing programs (Section 3).
“Land swapping” means land acquisition by exchanging land for another piece of land of equal value, or for shares of stock in a government or quasi-government corporation whose book value is of equal value, for planned development and socialized housing where land values are determined based on land classification, market value and assessed value from existing tax declarations; more valuable private lands may be exchanged with less valuable lands to carry out Act objectives (Section 3).
“Land use plan” is the rational allocation of available land resources equitably among competing user groups and for different functions consistent with the development plan and the Program (Section 3).
“On-site development” is upgrading and rehabilitation of blighted and slum urban areas to minimize displacement, with basic services under Section 21 (Section 3).
“Professional squatters” refers to persons/groups occupying lands without express consent of the landowner who have sufficient income for legitimate housing; it also includes those previously awarded homelot or housing units by government who sold, leased or transferred them to settle illegally in the same place or another urban area, and non-bona fide occupants and intruders of lands reserved for socialized housing; it excludes those who simply rent from professional squatters or squatting syndicates (Section 3).
“Resettlement areas” are areas identified by the appropriate national agency or by the LGU within its jurisdiction for relocation of the underprivileged and homeless (Section 3).
“Security of tenure” is the protection afforded to qualified Program beneficiaries against infringement or unjust, unreasonable and arbitrary eviction or disposition by virtue of ownership, lease agreement, usufruct and other contractual arrangements (Section 3).
“Socialized housing” means housing programs and projects for underprivileged and homeless citizens undertaken by government or the private sector that include sites and services development, long-term financing, liberalized interest payment terms, and other benefits under the Act (Section 3).
“Small property owners” are owners whose only real property consists of residential lands not exceeding three hundred square meters (300 sq. m.) in highly urbanized cities and eight hundred square meters (800 sq. m.) in other urban areas (Section 3).
“Underprivileged and homeless citizens” are beneficiaries whose income (or combined household income) falls within the poverty threshold as defined by the National Economic and Development Authority and who do not own housing facilities, including those in makeshift dwelling units and who do not enjoy security of tenure (Section 3).
“Unregistered or abandoned lands” are lands not registered with the Register of Deeds or city/municipal assessor’s office, or uninhabited by the owner and undeveloped/unutilized for any useful purpose, or appearing unutilized for three (3) consecutive years before the issuance and receipt or publication of notice of acquisition as provided in the Act; it excludes land abandoned due to force majeure or fortuitous events, provided it was previously used for useful or economic purpose (Section 3).
“Urban areas” are all cities regardless of population density and municipalities with population density of at least five hundred (500) persons per square kilometer (Section 3).
“Urbanizable areas” are sites and lands that within five (5) years show marked and great potential of becoming urban areas considering present characteristics and prevailing conditions (Section 3).
“Zonal Improvement Program or ZIP” refers to National Housing Authority upgrading and improving blighted squatter areas within Metro Manila cities and municipalities under existing statutes and executive issuances (Section 3).

Coverage and exemptions

The Program covers all lands in urban and urbanizable areas, including areas for priority development, ZIP sites, and SIR sites, and other areas identified by LGUs suitable for socialized housing (Section 4).
Lands covered by Republic Act No. 6657 (Comprehensive Agrarian Reform Law) are exempt from coverage (Section 5).
Lands actually used for national defense and security of the State are exempt (Section 5).
Lands used, reserved or set aside for government offices, facilities and other installations—including those owned by the National Government, its agencies and instrumentalities (including GOCCs) or by LGUs—are exempt, but portions not used for the reserved purpose for the past ten (10) years from effectivity of the Act are covered (Section 5).
Lands used, reserved or set aside for parks, reserves for flora and fauna, forests and watersheds, and other areas necessary to maintain ecological balance or environment protection, as determined and certified by the proper government agency, are exempt (Section 5).
Lands actually and primarily used for religious, charitable or educational purposes, cultural and historical sites, hospitals and health centers, and cemeteries or memorial parks are exempt (Section 5).
Exemptions do not apply when the use or purpose of the exempted lands has ceased to exist (Section 5).

Urban land framework, inventory, and acquisition

A National Urban Development and Housing Framework must be formulated by the Housing and Land Use Regulatory Board under the direction of the Housing and Urban Development Coordinating Council, in coordination with LGUs and other concerned public and private sectors, within one (1) year from effectivity (Section 6).
The Framework is a comprehensive plan for urban and urbanizable areas aimed at achieving the Program objectives (Section 6).
Framework formulation must review and rationalize existing town and land use plans, housing programs, and government/private activities that substantially affect urban land use patterns, transportation and public utilities, infrastructure, environment and population movements, with concurrence of concerned LGUs (Section 6).

Inventory and site identification

Within one (1) year from effectivity, every city and municipal government must conduct an inventory of all lands and improvements within its locality (Section 7).
The inventory must include residential lands; government-owned lands (including those of GOCCs and their subsidiaries); unregistered or abandoned and idle lands; and other lands (Section 7).
LGUs, coordinated with the Housing and Land Use Regulatory Board and assisted by appropriate agencies, must indicate the type of land use, degree of utilization, and other data needed to carry out the Act’s purposes (Section 7).
For planning purposes, each LGU must furnish the Housing and Urban Development Coordinating Council a copy of its inventory updated every three (3) years (Section 7).
After inventory, LGUs in coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the National Mapping Resource Information Authority, and the Land Management Bureau must identify lands for socialized housing and resettlement areas for immediate and future needs, considering availability of basic services, accessibility and proximity to job sites, and number of registered beneficiaries (Section 8).
Government-owned lands under Section 7(b) that have not been used for the reserved purpose for the past ten (10) years from effectivity and are identified suitable for socialized housing must immediately be transferred to the National Housing Authority, subject to approval of the President or the concerned LGU, as applicable, for disposition under the Act (Section 8).

Acquisition priorities and modes

Lands for socialized housing must be acquired in the following order: (1) lands owned by government or its subdivisions/instrumentalities/GOCCs and subsidiaries; (2) alienable public domain lands; (3) unregistered or abandoned and idle lands; (4) lands within Areas for Priority Development, ZIP sites, and SIR sites not yet acquired; (5) BLISS sites not yet acquired; and (6) privately-owned lands (Section 9).
On-site development controls when it is more practicable and advantageous to beneficiaries, making the priority order in Section 9 not apply; LGUs must give budgetary priority to on-site development of government lands (Section 9).
Land acquisition may be done through community mortgage, land swapping, land assembly or consolidation, land banking, donation to government, joint-venture agreement, negotiated purchase, and expropriation (Section 10).
Expropriation is allowed only after other modes of acquisition have been exhausted (Section 10).
Parcels owned by small property owners are exempt from expropriation for purposes of the Act (Section 10).
Abandoned property, as defined in the Act, must revert and be escheated to the State in a proceeding analogous to Rule 91 of the Rules of Court (Section 10).
For socialized housing, government-owned and foreclosed properties must be acquired by LGUs or primarily by the National Housing Authority through negotiated purchase (Section 10).
Qualified beneficiaries who are actual occupants must be given the right of first refusal in negotiated purchase for socialized housing (Section 10).

Expropriation of idle lands

Idle lands must be expropriated and form part of the public domain (Section 11).
Expropriated idle lands must be disposed of or utilized by government for purposes that conform with land use plans (Section 11).
Expropriation proceedings must be instituted if, after lapse of one (1) year following receipt of notice of acquisition, the owner fails to introduce improvements as defined in Section 3(f), except for force majeure and other fortuitous events (Section 11).
Residential lands owned by small property owners or whose ownership is subject of pending litigation are exempt from the one (1) year improvement-trigger expropriation provision (Section 11).

Disposition and valuation rules

The National Housing Authority (for lands belonging to the National Government) and LGUs (for other lands within their localities) must coordinate to formulate and make available alternative schemes for disposition to Program beneficiaries (Section 12).
Disposition schemes must not be limited to transfer of fee simple; they may include lease with option to purchase, usufruct, and other variations expedient for Act purposes (Section 12).
A scheme for public rental housing may be adopted (Section 12).
Equitable land valuation guidelines for socialized housing must be set by the Department of Finance based on market value reflected in zonal valuation, or in its absence, on the latest real property tax declaration (Section 13).
For sites occupied by qualified Program beneficiaries, the Department of Finance must factor in the blighted status certified by the LGU or National Housing Authority (Section 13).

Limits on beneficiary disposition

No land for socialized housing, including improvements or rights thereon, may be sold, alienated, conveyed, encumbered, or leased by any beneficiary except to qualified Program beneficiaries as determined by the government agency concerned (Section 14).
Any unlawful sale, transfer or disposition by a beneficiary is null and void (Section 14).
A beneficiary who unlawfully disposes of the lot or any right must lose the right to the land, forfeit the total amortization paid, and is barred from benefits under the Act for ten (10) years from the date of violation (Section 14).
If the beneficiary dies before full ownership vests, transfer to heirs occurs only upon assumption by heirs of the beneficiary’s outstanding obligations (Section 14).
If heirs fail to assume outstanding obligations, the land reverts to the Government for disposition under the Act (Section 14).

Socialized housing: eligibility, registration, incentives

Socialized housing is the primary strategy for providing shelter for underprivileged and homeless citizens (Section 15).
When a socialized housing program’s tenurial arrangement is leasehold or usufruct, it must be transitory, and beneficiaries must be encouraged to become independent from the Program within a period determined by the implementing agency (Section 15).

Eligibility and registration

To qualify, a beneficiary must be a Filipino citizen, an underprivileged and homeless citizen, must not own any real property in urban or rural areas, and must not be a professional squatter or a member of squatting syndicates (Section 16).
The Housing and Urban Development Coordinating Council, in coordination with LGUs, must design a registration system for qualified beneficiaries consistent with the Framework (Section 17).
LGUs must identify and register all beneficiaries within their localities within one (1) year from effectivity (Section 17).

Balanced housing development requirement

Developers of proposed subdivision projects must develop an area for socialized housing equivalent to at least twenty percent (20%) of total subdivision area or total subdivision project cost at the developer’s option, within the same city or municipality when feasible, and in accordance with standards set by the Housing and Land Use Regulatory Board and other laws (Section 18).
The requirement may be complied with through: (1) development of new settlement; (2) slum upgrading or renewal of priority development areas through ZIP or SIR; (3) joint-venture projects with LGUs or housing agencies; or (4) participation in the community mortgage program (Section 18).

Incentives for housing agencies

The National Housing Authority is exempted from payment of all fees and charges of any kind, including income and real taxes (Section 19).
Documents and contracts executed by and in favor of the National Housing Authority are exempt from documentary stamp tax and registration fees, including fees required for issuance of transfer certificates of titles (Section 19).

Incentives for private sector

Private developers must receive incentives including reduction and simplification of qualification and accreditation requirements, creation of one-stop offices in different regions, simplification of financing procedures, and specified tax exemptions (Section 20).
One-stop offices must issue clearances, permits and licenses within ninety (90) days from date of submission of all requirements by participating private developers (Section 20).
Private sector exemptions apply to: project-related income taxes; capital gains tax on raw lands used for the project; value-added tax for the project contractor concerned; transfer tax for both raw and completed projects; and donor’s tax for lands certified by LGUs as donated for socialized housing (Section 20).
Upon application for exemption, the Register of Deeds must annotate a lien on the title of the land (Section 20).
The tax exemption applies only if the socialized housing development plan has been approved by the appropriate government agencies (Section 20).
Savings resulting from these incentives must accrue in favor of beneficiaries subject to implementing guidelines issued by the Housing and Urban Development Coordinating Council (Section 20).
Implementing guidelines for proper implementation of the tax exemption must be prepared by the Department of Finance, in consultation with the Housing and Urban Development Coordinating Council, within one (1) year after approval of the Act (Section 20).
Property owners who voluntarily provide resettlement sites to illegal occupants are entitled to a tax credit equal to actual non-recoverable expenses incurred in resettlement, subject to implementing guidelines jointly issued by the Housing and Urban Development Coordinating Council and the Department of Finance (Section 20).

Basic services and livelihood

Local government units or the National Housing Authority must provide socialized housing and resettlement areas with basic services and facilities: potable water; power/electricity and adequate distribution; sewerage and efficient solid waste disposal; and access to primary roads and transportation facilities (Section 21).
Other basic services and facilities such as health, education, communications, security, recreation, relief and welfare must be planned and prioritized by LGUs and concerned agencies in cooperation with the private sector and beneficiaries (Section 21).
LGUs, coordinating with concerned national agencies, must ensure these basic services are provided at most cost-efficient rates and set a mechanism to operationally coordinate other agencies’ thrusts, objectives and activities (Section 21).
Socialized housing and resettlement projects must, to the extent feasible, be located near employment-accessible areas; agencies handling livelihood programs and livelihood loans must prioritize Program beneficiaries (Section 22).

Participation and consultation

LGUs must afford beneficiaries or duly designated representatives opportunity to be heard and participate in decision-making over matters protecting and promoting their legitimate collective interests, including documentation and feedback mechanisms, in coordination with the Presidential Commission for the Urban Poor and concerned agencies (Section 23).
Beneficiaries must be encouraged to organize and undertake self-help cooperative housing and other livelihood activities and to assist government in preventing incursions by professional squatters and squatting syndicates (Section 23).
If affected beneficiaries fail to organize or form an alliance within a reasonable period prior to program or project implementation, consultation must be conducted between implementing agency and affected beneficiaries with assistance of the Presidential Commission for the Urban Poor and concerned non-government organizations (Section 23).
Adequate consultation opportunities must be accorded to the private sector involved in socialized housing projects (Section 24).

Priority development benefits and support

Occupants of Areas for Priority Development, ZIP sites, and SIR sites must receive, in addition to benefits under existing laws and related issuances, priority in all government projects initiated under the Act (Section 25).
They must also receive support services: land surveys and titling at minimal cost; liberalized terms on credit facilities and housing loans; one hundred percent (100%) deduction from every homebuyer’s gross income tax of all interest payments on documented loans incurred for construction or purchase of the homebuyer’s house; exemption from documentary stamp tax, registration fees and other fees for issuance of transfer certificate of titles; basic services under Section 21; and other benefits arising from implementing the Act (Section 25).

Urban renewal, eviction, and demolition controls

Urban renewal covers rehabilitation and development of blighted and slum areas and resettlement of Program beneficiaries in accordance with the Act (Section 26).
On-site development must be implemented whenever possible to ensure minimum movement of occupants of blighted lands and slum areas (Section 26).
Resettlement from existing places of occupancy must be undertaken only when on-site development is not feasible and after compliance with eviction procedures in Section 28 (Section 26).

Action against professional squatters

LGUs must, in cooperation with the Philippine National Police, the Presidential Commission for the Urban Poor (PCUP), and PCUP-accredited urban poor organizations, adopt measures to identify and curtail professional squatters and squatting syndicates (Section 27).
Persons or groups identified as professional squatters or squatting syndicates must be summarily evicted and their dwellings or structures demolished, and must be disqualified from availing benefits of the Program (Section 27).
A public official who tolerates or abets the commission of these acts must be dealt with under existing laws (Section 27).
Professional squatters or members of squatting syndicates face a penalty of six (6) years imprisonment, or a fine of not less than P60,000 but not more than P100,000, or both, at the discretion of the court (Section 27).

Eviction and demolition rules

Eviction or demolition as a practice must be discouraged, but may be allowed only in the following situations: (1) occupation of danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks, roads, parks and playgrounds; (2) when government infrastructure projects with available funding are about to be implemented; or (3) when there is a court order for eviction and demolition (Section 28).
Mandatory requirements for eviction/demolition involving underprivileged and homeless citizens include:
- Notice to affected persons or entities at least thirty (30) days before eviction/demolition (Section 28).
- Adequate consultations on resettlement with duly designated representatives and affected communities in relocation areas (Section 28).
- Presence of local government officials or representatives during eviction/demolition (Section 28).
- Proper identification of all persons taking part in demolition (Section 28).
- Execution only during regular office hours Mondays to Fridays and during good weather unless affected families consent otherwise (Section 28).
- No use of heavy equipment except for structures that are permanent and concrete (Section 28).
- Proper uniforms for Philippine National Police members who must occupy the first line of law enforcement and observe proper disturbance control procedures (Section 28).
- Adequate relocation, temporary or permanent (Section 28).
For evictions/demolition pursuant to a court order involving underprivileged and homeless citizens, relocation must be undertaken by the LGU and National Housing Authority with assistance of other government agencies within forty-five (45) days from service of notice of final judgment, after which the order must be executed (Section 28).
If relocation is not possible within forty-five (45) days, LGUs must extend financial assistance equal to the prevailing minimum daily wage multiplied by sixty (60) days (Section 28).
The Department of the Interior and Local Government and the Housing and Urban Development Coordinating Council must jointly promulgate rules and regulations to carry out these eviction provisions (Section 28).

Resettlement and prohibition on new illegal structures

Within two (2) years from effectivity, LGUs in coordination with the National Housing Authority must implement relocation and resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks, roads, parks and playgrounds (Section 29).
LGUs must provide relocation or resettlement sites with basic services and facilities and access to employment and livelihood opportunities sufficient to meet basic needs of affected families (Section 29).
Constructing any structure in danger areas covered in Section 29 becomes unlawful (Section 30).
After effectivity, barangay, municipal and city governments must prevent the construction of illegal dwelling units/structures within their respective localities (Section 30).
Any LGU head who allows, abets or tolerates construction in violation of Section 30 must face administrative sanctions under existing laws and penal sanctions under the Act (Section 30).

Community Mortgage Program

The Community Mortgage Program (CMP) is a mortgage financing program of the National Home Mortgage Finance Corporation that assists legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under community ownership (Section 31).
The CMP’s primary objective is to assist residents of blighted or depressed areas to own lots they occupy or where they choose to relocate to, and eventually improve neighborhoods and homes within affordability limits (Section 31).

CMP incentives and eviction protection

Government-owned or-controlled corporations and LGUs may dispose of idle lands suitable for socialized housing under the CMP through negotiated sale at prices based on acquisition cost plus financial carrying costs (Section 32).
Properties sold under the CMP are exempted from capital gains tax (Section 32).
CMP beneficiaries are not to be evicted or dispossessed of lands or improvements unless they incur amortization arrearages for three (3) months (Section 32).

Beneficiary organization and association rules

CMP beneficiaries must organize into associations to manage subdivisions/places of residence, secure housing loans under the CMP and other beneficial projects (Section 33).
Associations organized under the Act may collectively acquire and own lands covered by the Program, subject to rules and regulations promulgated by the National Home Mortgage Finance Corporation (Section 33).
If beneficiaries fail to form an association, the National Home Mortgage Finance Corporation must initiate organization in coordination with the Presidential Commission for the Urban Poor and concerned LGUs (**Section 33