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Cost has always been a major stumbling block for ordinary citizens to reach their dreams of owning their own house. In truth, most of the buyers of houses and lots are overseas Filipino workers (OFWs), financed by relatives from abroad, or given houses by their foreign spouses. Locals hardly earn enough for other basic needs, much less have money for expensive housing.
There is an alternative, though: cooperatives. In principle, cooperatives are owned by all its members. None of the members, no matter how big the monetary contribution to the organization, may dominate the decision making of the group.
Most importantly, cooperatives live by the principle of moderating, if not eliminating, greed by not allowing themselves to retain surplus earnings. That is, they do not allow themselves to have big profits as regular businesses do.
It does not mean that the members’ assets do not grow. It just means that they do not allow the assets to grow at the expense of their responsibilities to society.
Living by these principles, housing cooperatives come as a very real and viable alternative to market-led and profit-driven housing projects. Being not market led, cooperatives can cater to housing needs of sectors often left out by profit-driven companies that perceive certain market segments to bring them less earnings. Mostly, these are the poorer sectors where risk of default of payments is higher and profit margins are usually lower.
Cost is kept to a minimum following its commitment to minimize profit. Because of this, cooperatives have generally low interest rates. Many of the cooperatives’ products and services are also free from tax. This is most certainly true in housing.
Natcco
The National Confederation of Cooperatives (Natcco), based in Metro Manila, is a tertiary cooperative, which means that it is a national federation of regional federations of cooperatives all over the Philippines. Natcco offers such affordable housing opportunities to its members through its National Housing Cooperative Resource Center.
Roger Calfoforo, Natcco’s Housing Cooperative Development manager, was recently in Cebu to talk to some of the local cooperatives here regarding their housing program. Calfoforo explained that they have already four projects in conceptual and development stages. Two of them are in Manila, one in Iloilo, and another in Abuyog, Leyte.
One of the Manila projects is an 8-story building in Project 4, Quezon City. There will be 23 available units for this project with sizes between 30 to 90 sqm. The building actually stands on only a 230-sqm lot.
The other Metro Manila project is in Kalayaan, also in Quezon City, near the city hall. It is a 7-story building with 66 units available, with 40 sqm floor areas each. This one was initiated by the staff of a certain NGO who formed their own cooperative.
In Iloilo, a primary cooperative is building 50 single detached homes under Natcco’s scheme. The houses are only 30 sqm but are high enough to put a mezzanine. The lots are between 60 to 100 sqm. This project is actually the second phase, the first phase is being implemented solely by the primary cooperative.
The project in Abuyog, Leyte was the first for Natcco. It is a mixed development with duplex and single detached units and a medium rise building. Five hundred units are up for grabs. Abuyog is a mere one hour away from Tacloban.
Technology
One of the cost saving practices of Natcco is their use of a technology which they borrowed from many sources, one of which is the Habitat for Humanity. They use what is called concrete interlocking blocks (CIB). It is stacked like Lego blocks and requires minimal-sized bars for support. A four-story building using this technology, for example, requires only 12 mm bars. This means big savings for the construction.
With the use of CIB plus a steel framing technology also of Habitat, less curing time is required compared to conventional construction methods. Much time is saved in construction. This lessens labor cost, among others. Thus for a medium-rise building, only 4 to 6 months is required to finish the construction, as is the case of the Project 4 property.
Low prices
The prices for these housing projects are unbelievably low. They are in fact less than half the cost of commercially built houses. Condominiums in Cebu cost P55,000 to P100,000 per square meter. This translates to P1.32 million for a 24-sqm unit, at the very least. In the case of a cooperative-run building, such as those in Metro Manila, one can buy the units at only P18,000 per square meter to P20,000 per sq m. Thus, for P1.32 million, one can already occupy 73 square meters of space, or you can buy a 24-sqm unit for only P432,000. Actually, in Abuyog, Leyte, the medium-rise units cost only between P300,000 and P400,000 per unit.
In Iloilo, the 30 square meter unit in a 60 square meter lots starts at P180,000. Compare that to low cost houses in the outskirts of Metro Cebu which have a floor area of 25 square meters and a 32 square meter lot at P380,000 or so. Even considering the higher value of land in Cebu, the price of a cooperative-run project would be significantly lower than that of any commercial project.
Payment schemes
Aside from the low prices, payment schemes are made easier by the cooperative. The equity, which is 30 percent of the unit cost, is the most difficult portion of the payment for any buyer. The equity is to be paid within six months. The co-op uses the concept of "sweat equity" in which members give time to help in the construction of their house as part of the equity given its equivalent cost. In the case of Leyte, their sweat equity was equivalent to 400 hours of work. This resulted in a significantly lowered actual monetary equity requirement for the buyers.
As for the monthly amortization of the 70 percent balance, Natcco has partnered with Pag-Ibig Fund. This assures the buyer of the availability of low interest rates. Pag-Ibig currently offers interest rates as low as 6 percent for loans below P300,000. These are payable up to 30 years so that monthly amortizations are really low.
Next week, learn how to avail of this very affordable housing scheme offered by Natcco.
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(Tuts Paradela is a licensed real estate broker, who helps a nongovernment organization in livelihood development. His website is www.ceburealestates.com.)
