Housing Board Approves Cap on Rent Increase

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The National Human Settlements Board (NHSB) has recently approved a new policy that sets a 4 percent increase limit for residential rental rates of P10,000 and below. This decision, which will take effect on January 1, 2024, aims to address the issue of unwarranted increases in rental rates among lower-income families.

The policy was implemented based on the recommendation of the National Economic and Development Authority (NEDA), which emphasized the need for a uniform maximum percentage increase. By setting this limit, the NHSB aims to ensure that rental rates remain affordable for lower-income households, preventing any undue burden on their finances.

To arrive at this decision, the Department of Human Settlements and Urban Development (DHSUD) reviewed and revised the policy in accordance with the latest empirical studies. These studies, such as the Annual Family Income and Expenditure Survey and Census of Population and Housing, provided valuable insights into the current rental landscape and its impact on lower-income families.

According to data from the 2020 Census of Population conducted by the Philippine Statistics Authority (PSA) and released in August 2023, a significant 81 percent of households in the country rent their housing units. This highlights the importance of ensuring fair and reasonable rental rates for a large portion of the population.

Furthermore, the average income of Filipino families from January to December 2021 was estimated at P307,000. These figures serve as a crucial reference point for determining the appropriate increase limit. By considering the income levels of households, the NHSB aims to strike a balance between protecting the interests of tenants and maintaining the viability of the rental market.

DHSUD Undersecretary Henry Yap emphasized that these data-driven insights guided the decision-making process of the multi-agency NHSB. The board aimed to arrive at the most sound, feasible, and fair figure to represent the cap in rental increase. Through this careful consideration, the NHSB seeks to ensure that the policy benefits both tenants and landlords, fostering a more sustainable rental market.

It is important to note that this policy applies specifically to residential rental rates of P10,000 and below. For rental rates above this threshold, different regulations and considerations may come into play. However, the NHSB’s focus on addressing the needs of lower-income families sets a positive precedent for future discussions and potential extensions of the policy.

In conclusion, the approval of the 4 percent increase limit for residential rental rates by the NHSB marks a significant step towards promoting fair and affordable housing for lower-income families. By basing the decision on empirical studies and considering the income levels of households, the NHSB aims to strike a balance that benefits both tenants and landlords. This policy serves as a testament to the government’s commitment to creating a sustainable and inclusive housing market.

Source: The Manila Times

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