REPUBLIC ACT NO.

7279

AN ACT TO PROVIDE FOR A COMPREHENSIVE AND

CONTINUING URBAN DEVELOPMENT AND HOUSING
PROGRAM, ESTABLISH THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES.

ARTICLE I
TITLE, POLICY, PROGRAM AND DEFINITION OF TERMS

Section 1. Title. This Act shall be known as the "Urban

Development and Housing Act of 1992." chan robles virtual law library

Sec. 2. Declaration of State Policy and Program Objectives.

It shall be the policy of the State to undertake, in
cooperation with the private sector, a comprehensive and
continuing Urban Development and Housing Program,
hereinafter referred to as the Program, which shall:

(a) Uplift the conditions of the underprivileged and homeless

citizens in urban areas and in resettlement areas by making
available to them decent housing at affordable cost, basic
services, and employment
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opportunities;
(b) Provide for the rational use and development of urban
land in order to bring about the following:
(1) Equitable utilization of residential lands in urban and
urbanizable areas with particular attention to the needs and
requirements of the underprivileged and homeless citizens
and not merely on the basis of market forces;
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(2) Optimization of the use and productivity of land and

urban resources;
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(3) Development of urban areas conducive to commercial and

industrial activities which can generate more economic
opportunities for the people;

(4) Reduction in urban dysfunctions, particularly those that

adversely affect public health, safety and ecology; and

(5) Access to land and housing by the underprivileged and

homeless citizens;

(c) Adopt workable policies to regulate and direct urban

growth and expansion towards a dispersed urban net and
more balanced urban-rural interdependence;
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(d) Provide for an equitable land tenure system that shall

guarantee security of tenure to Program beneficiaries but
shall respect the rights of small property owners and ensure
the payment of just compensation;
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(e) Encourage more effective people's participation in the

urban development process; and

(f) Improve the capability of local government units in

undertaking urban development and housing programs and
projects.

Sec. 3. Definition of Terms. For purposes of this Act:

(a) "Affordable cost" refers to the most reasonable price of

land and shelter based on the needs and financial capability
of Program beneficiaries and appropriate financing schemes;
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(b) "Areas for priority development" refers to those areas

declared as such under existing statutes and pertinent
executive issuances.
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(c) "Blighted lands" refers to the areas where the structures

are dilapidated, obsolete and unsanitary, tending to
depreciate the value of the land and prevent normal
development and use of the area. chanrobles virtual law library

(d) "Consultation" refers to the constitutionally mandated

process whereby the public, on their own or through people's
organizations, is provided an opportunity to be heard and to
participate in the decision-making process on matters
involving the protection and promotion of its legitimate
collective interest, which shall include appropriate
documentation and feedback mechanisms;

(e) "Idle lands" refers to non-agricultural lands urban and

urbanized areas on which no improvements, as herein
defined, have been made by the owner, as certified by the
city, municipal or provincial assessor; chan robles virtual law library

(f) "Improvements" refers to all types of buildings and

residential units, walls, fences, structures or constructions
of all kinds of a fixed character or which are adhered to the
soil but shall not include trees, plants and growing fruits,
and other fixtures that are mere superimpositions on the
land, and the value of improvements shall not be less than
fifty percent (50%) of the assessed value of the property; chan robles virtual law library

(g) "Joint venture" refers to the commitment or agreement

by two (2) or more persons to carry out a specific or single
business enterprise for their mutual benefit, for which
purpose they combine their funds, land resources, facilities
and services;

(h) "Land assembly or consolidation" refers to the acquisition

of lots of varying ownership through purchase or
expropriation of the purpose of planned and rational
development and socialized housing programs without
individual property boundary restrictions; chan robles virtual law library

(i) "Land banking" refers to the acquisition of land at values

based on existing use in advance of actual need to promote
planned development and socialized housing programs;

(j) "Land swapping" refers to the process of 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 to the land
being exchanged, for the purpose of planned and rational
development and provision for socialized housing where land
values are determined based on land classification, market
value and assessed value taken from existing tax
declarations: Provided, That more valuable lands owned by
private persons may be exchanged with less valuable lands
to carry out the objectives of this Act;

(k) "Land use plan" refers to the rational approach of

allocating available resources as equitably as possible among
competing user groups and for different functions consistent
with the development plan of the area and the Program
under this Act;

(l) "On-site development" refers to the process of upgrading

and rehabilitation of blighted slum urban areas with a view
of minimizing displacement of dwellers in said areas, and
with provisions for basic services as provided for in Section
21 hereof;

(m) "Professional squatters" refers to individuals or groups

who occupy lands without the express consent of the
landowner and who have sufficient income for legitimate
housing. The term shall also apply to persons who have
previously been awarded homelots or housing units by the
Government but who sold, leased or transferred the same to
settle illegally in the same place or in another urban area,
and non-bona fide occupants and intruders of lands reserved
for socialized housing. The term shall not apply to
individuals or groups who simply rent land and housing from
professional squatters or squatting syndicates;
(n) "Resettlement areas" refers to areas identified by the
appropriate national agency or by the local government unit
with respect to areas within its jurisdiction, which shall be
used for the relocation of the underprivileged and homeless
citizens;

(o) "Security of tenure" refers to the degree of protection

afforded to qualified Program beneficiaries against
infringement or unjust, reasonable and arbitrary eviction or
disposition, by virtue of the right of ownership, lease
agreement, usufruct and other contractual arrangements;

(p) "Slum Improvement and Resettlement Program or SIR"

refers to the program of the National Housing Authority of
upgrading and improving blighted squatter areas outside of
Metro Manila pursuant to existing statutes and pertinent
executive issuances;

(q) "Small property owners" refers to those 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;

(r) "Socialized housing" refers to housing programs and

projects covering houses and lots or homelots only
undertaken by the Government or the private sector for the
underprivileged and homeless citizens which shall include
sites and services development, long-term financing,
liberalized terms on interest payments, and such other
benefits in accordance with the provisions of this Act;

(s) "Squatting syndicates" refers to groups of persons

engaged in the business of squatter housing for profit or
gain;

(t) "Underprivileged and homeless citizens" refers to the

beneficiaries of this Act and to individuals or families
residing in urban and urbanizable areas 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. This shall include those who live in makeshift
dwelling units and do not enjoy security of tenure;chan robles virtual law library

(u) "Unregistered or abandoned lands" refers to lands in

urban and urbanizable areas which are not registered with
the Register of Deeds, or with the city or municipal
assessor's office concerned, or which are uninhabited by the
owner and have not been developed or devoted for any useful
purpose, or appears unutilized for a period of three (3)
consecutive years immediately prior to the issuance and
receipt of publication of notice of acquisition by the
Government as provided under this Act. It does not include
land which has been abandoned by reason of force majeure
or any other fortuitous event: Provided, That prior to such
event, such land was previously used for some useful or
economic purpose; chan robles virtual law library

(v) "Urban areas" refers to all cities regardless of their

population density and to municipalities with a population
density of at least five hundred (500) persons per square
kilometers;

(w) "Urbanizable areas" refers to sites and lands which,

considering present characteristics and prevailing
conditions, display marked and great potential of becoming
urban areas within the period of five (5) years; and

(x) "Zonal Improvement Program or ZIP" refers to the

program of the National Housing Authority of upgrading and
improving blighted squatters areas within the cities and
municipalities of Metro Manila pursuant to existing statutes
and pertinent executive issuances.

ARTICLE II
COVERAGE AND EXEMPTIONS
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Sec. 4. Coverage. The Program shall cover all lands in

urban and urbanizable areas, including existing areas for
priority development sites, and in other areas that may be
identified by the local government units as suitable for
socialized housing. chanrobles virtual law library

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Sec. 5. Exemptions. The following lands shall be exempt

from the coverage of this Act:

(a) Those included in the coverage of Republic Act No. 6657,

otherwise known as the Comprehensive Agrarian Reform
Law;
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(b) Those actually used for national defense and security of

the State;
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(c) Those used, reserved or otherwise set aside for

government offices, facilities and other installations,
whether owned by the National Government, its agencies
and instrumentalities, including government-owned or-
controlled corporations, or by the local government units:
Provided, however, That the lands herein mentioned, or
portions thereof, which have not been used for the purpose
for which they have been reserved or set aside for the past
ten (10) years from the effectivity of this Act, shall be
covered by this Act;

(d) Those used or set aside for parks, reserves for flora and
fauna, forests and watersheds, and other areas necessary to
maintain ecological balance or environmental protection, as
determined and certified to by the proper government
agency; and

(e) Those actually and primarily used for religious,

charitable, or educational purposes, cultural and historical
sites, hospitals and health centers, and cemeteries or
memorial parks.

The exemptions herein provided shall not apply when the

use or purpose of the abovementioned lands has ceased to
exist. chanrobles virtual law library

ARTICLE III
NATIONAL URBAN DEVELOPMENT AND HOUSING
FRAMEWORK
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Sec. 6. Framework for Rational Development. There shall

be a National Urban Development and Housing Framework to
be formulated by the Housing and Land Use Regulatory
Board under the direction of the Housing and Urban
Development Coordinating Council in coordination with all
local government units and other concerned public and
private sectors within one (1) year from the effectivity of
this Act. chanrobles virtual law library

The framework shall refer to the comprehensive plan for

urban and urbanizable areas aimed at achieving the
objectives of the Program. In the formulation of the
Framework, a review and rationalization of testing town and
land use plans, housing programs, and all other objectives
and activities of government agencies and the private
sectors which may substantially affect urban land use
patterns, transportation and public utilities, infrastructure,
environment and population movement shall be undertaken
with the concurrence of the local government units
concerned. chanrobles virtual law library
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ARTICLE IV
LAND USE, INVENTORY, ACQUISITION AND DISPOSITION
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Sec. 7. Inventory of Lands. Within one (1) year from the

effectivity of this Act, all city and municipal governments
shall conduct an inventory of all kinds and improvements
thereon within their respective localities. The inventory
shall include the following:

(a) Residential lands;

(b) Government-owned lands, whether owned by the National

Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or-controlled
corporations and their subsidiaries;
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(c) Unregistered or abandoned and idle lands; and chan robles virtual law library

(d)Other lands.

In conducting the inventory, the local government units

concerned, in coordination with the Housing and Land Use
Regulatory Board and with the assistance of the appropriate
government agencies, shall indicate the type of land use and
the degree of land utilization, and other data or information
necessary to carry out the purposes of this Act. chanrobles virtual law library

For planning purposes, the Housing and Urban Development

Coordinating Council shall be furnished by each local
government unit a copy of its inventory which shall be
updated every three (3) years. chanrobles virtual law library

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Sec. 8. Identification of Sites for Socialized Housing.

After the inventory the local government units, 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, shall identify lands for socialized
housing and resettlement areas for the immediate and future
needs of the underprivileged and homeless in the urban
areas, taking into consideration and degree of availability of
basic services and facilities, their accessibility and
proximity of jobs sites and other economic opportunities,
and the actual number of registered beneficiaries. chanrobles virtual law library

Government-owned lands under paragraph (b) of the

preceding section which have not been used for the purpose
for which they have been reserved or set aside for the past
ten (10) years from the effectivity of this Act and identified
as suitable for socialized housing, shall immediately be
transferred to the National Housing Authority subject to the
approval of the President of the Philippines or by the local
government unit concerned, as the case may be, for proper
disposition in accordance with this Act. cralaw

Sec. 9. Priorities in the Acquisition of Land. Lands for

socialized housing shall be acquired in the following order:

(a) Those owned by the Government or any of its

subdivisions, instrumentalities, or agencies, including
government-owned or -controlled corporations and their
subsidiaries;
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(b) Alienable lands of the public domain;

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(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority

Development, Zonal Improvement Program sites, and Slum
Improvement and Resettlement Program sites which have
not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or

BLISS sites which have not yet been acquired; and

(f) Privately-owned lands.

Where open-site development is found more practicable and

advantageous to the beneficiaries, the priorities mentioned
in this section shall not apply. The local government units
shall give budgetary priority to on-site development of
government lands. chanrobles virtual law library

Sec. 10. Modes of Land Acquisition. The modes of

acquiring lands for purposes of this Act shall include, among
others, community mortgage, land swapping, land assembly
or consolidation, land banking, donation to the Government,
joint-venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall
be resorted to only when other models of acquisition have
been exhausted: Provided, further, That where expropriation
is resorted to, parcels of land owned by small property
owners shall be exempted for purposes of this Act: Provided,
finally, That abandoned property, as herein defined, shall be
reverted and escheated to the State in a proceeding
analogous to the procedure laid down in Rule 91 of the Rules
of Court. chan robles virtual law library

For the purpose of socialized housing, government-owned

and foreclosed properties shall be acquired by the local
government units, or by the National Housing Authority
primary through negotiated purchase: Provided, That
qualified beneficiaries who are actual occupants of the land
shall be given the right of first refusal. cralaw

Sec. 11. Expropriation of Idle Lands. All idle lands in

urban and urbanizable areas, as defined and identified in
accordance with this Act, shall be expropriated and shall
form part of the public domain. These lands shall be
disposed of or utilized by the Government for such purposes
that conform with their land use plans. Expropriation
proceedings shall be instituted if, after the lapse of one (1)
year following receipt of notice of acquisition, the owner
fails to introduce improvements as defined in Section 3(f)
hereof, except in the case of force majeure and other
fortuitous events. Exempted from this provision, however,
are residential lands owned by small property owners or
those the ownership of which is subject of a pending
litigation. cralaw

Sec. 12. Disposition of Lands for Socialized Housing. The

National Housing Authority, with respect to lands belonging
to the National Government, and the local government units
with respect to other lands within their respective localities,
shall coordinate with each other to formulate and make
available various alternative schemes for the disposition of
lands to the beneficiaries of the Program. These schemes
shall not be limited to those involving transfer of ownership
in fee simple but shall include lease, with option to
purchase, usufruct or such other variations as the local
government units or the National Housing Authority may
deem most expedient in carrying out the purposes of this
Act.cralaw

Consistent with this provision, a scheme for public rental

housing may be adopted. cralaw
Sec. 13. Valuation of Lands for Socialized Housing.
Equitable land valuation guidelines for socialized housing
shall be set by the Department of Finance on the basis of the
market value reflected in the Zonal valuation, or in its
absence, on the latest real property tax declaration. cralaw

For site already occupied by qualified Program beneficiaries,

the Department of Finance shall factor into the valuation
the blighted status of the lands as certified by the local
government unit or the National Housing Authority. cralaw

Sec. 14. Limitations on the Disposition of Lands for

Socialized Housing. No land for socialized housing,
including improvements or rights thereon, shall be sold,
alienated, conveyed, encumbered or leased by any
beneficiaries as determined by the government agency
concerned. cralaw

Should the beneficiary unlawfully sell, transfer, or otherwise

dispose of his lot or any right thereon, the transaction shall
be null and void. He shall also lose his right to the land,
forfeit the total amortization paid thereon, and shall be
barred from the benefits under this Act for a period of ten
(10) years from the date of violation. cralaw

In the event the beneficiary dies before full ownership of the

land is vested on him, transfer to his heirs shall take place
only upon their assumption of his outstanding obligations.
In case of failure by the heirs to assume such obligations,
the land shall revert to the Government for disposition in
accordance with this Act.
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ARTICLE V
SOCIALIZED HOUSING
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Sec. 15. Policy. Socialized housing, as defined in Section

3 hereof, shall be the primary strategy in providing shelter
for the underprivileged and homeless. However, if the
tenurial arrangement in a particular socialized housing
program is in the nature of leasehold or usufruct, the same
shall be transitory and the beneficiaries must be encouraged
to become independent from the Program within a given
period of time, to be determined by the implementing
agency concerned. chanrobles virtual law library
Sec. 16. Eligibility Criteria for Socialized Housing Program
Beneficiaries. To qualify for the socialized housing
program, a beneficiary:

(a) Must be a Filipino citizen;

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(b) Must be an underprivileged and homeless citizen, as

defined in Section 3 of this Act;
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(c) Must not own any real property whether in the urban or
rural areas; and

(d) Must not be a professional squatter or a member of

squatting syndicates.

Sec. 17. Registration of Socializing Housing Beneficiaries.

The Housing and Urban Development Coordinating Council,
in coordination with the local government units, shall
designed a system for the registration of qualified Program
beneficiaries in accordance with the Framework. The local
government units, within one (1) year from the effectivity of
this Act, shall identify and register all beneficiaries within
their respective localities.
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Sec. 18. Balanced Housing Development. The Program

shall include a system to be specified in the Framework plan
whereby developers of proposed subdivision projects shall be
required to develop an area for socialized housing equivalent
to at least twenty percent (20%) of the total subdivision area
or total subdivision project cost, at the option of the
developer, within the same city or municipality, whenever
feasible, and in accordance with the standards set by the
Housing and Land Use Regulatory Board and other existing
laws. The balanced housing development as herein required
may also be complied with by the developers concerned in
any of the following manner:

(a) Development of new settlement;

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(b) Slum upgrading or renewal of areas for priority

development either through zonal improvement programs or
slum improvement and resettlement programs;
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(c) Joint-venture projects with either the local government

units or any of the housing agencies; or

(d) Participation in the community mortgage program.

Sec. 19. Incentives for the National Housing Authority.
The National Housing Authority, being the primary
government agency in charge of providing housing for the
underprivileged and homeless, shall be exempted from the
payment of all fees and charges of any kinds, whether local
or national, such as income and real taxes. All documents or
contracts executed by and in favor of the National Housing
Authority shall also be exempt from the payment of
documentary stamp tax and registration fees, including fees
required for the issuance of transfer certificates of titles. chanrobles virtual law library

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Sec. 20. Incentives for Private Sector Participating in

Socialized Housing. To encourage greater private sector
participation in socialized housing and further reduce the
cost of housing units for the benefit of the underprivileged
and homeless, the following incentives shall be extended to
the private sectors:

(a) Reduction and simplification of qualification and

accreditation requirements for participating private
developers;
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(b) Creation of one-stop offices in the different regions of the

country for the processing, approval and issuance of
clearances, permits and licenses: Provided, That clearances,
permits and licenses shall be issued within ninety (90) days
from the date of submission of all requirements by the
participating private developers;
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(c) Simplification of financing procedures; and

(d) Exemption from the payment of the following:

(1) Project-related income taxes;

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(2) Capital gains tax on raw lands used for the project;
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(3) Value-added tax for the project contractor concerned;

(4) Transfer tax for both raw completed projects; and

(5) Donor's tax for lands certified by the local government

units to have been donated to socialized housing purposes.

Provided, That upon application for exemption, a lien on the

title of the land shall be annotated by the Register of Deeds:
Provided, further, That the socialized housing development
plan has already been approved by the appropriate
government agencies concerned: Provided, finally, That all
the savings acquired by virtue of this provision shall accrue
in favor of the beneficiaries subject to the implementing
guidelines to be issued by the Housing and Urban
Development Coordinating Council.
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Appropriate implementing guidelines shall be prepared by

the Department of Finance, in consultation with the
Housing and Urban Development Coordinating Council, for
the proper implementation of the tax exemption mentioned
in this section within one (1) year after the approval of this
Act. chanrobles virtual law library

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Property owners who voluntarily provide resettlement sites

to illegal occupants of their lands shall entitled to a tax
credit equivalent to the actual non-recoverable expenses
incurred in the resettlement, subject to the implementing
guidelines jointly issued by the Housing and Urban
Development Coordinating Council and the Department of
Finance. chanrobles virtual law library

Sec. 21. Basic Services. Socialized housing or

resettlement areas shall be provided by the local government
unit or the National Housing Authority in cooperation with
the private developers and concerned agencies with the
following basic services and facilities:

(a) Potable water;

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(b) Power and electricity and an adequate power distribution

system;
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(c) Sewerage facilities and an efficient and adequate solid

waste disposal system; and

(d)Access to primary roads and transportation facilities.

The provisions of other basic services and facilities such as

health, education, communications, security, recreation,
relief and welfare shall be planned and shall be given priority
for implementation by the local government unit and
concerned agencies in cooperation with the private sector
and the beneficiaries themselves. chanrobles virtual law library

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The local government unit, in coordination with the

concerned national agencies, shall ensure that these basic
services are provided at the most cost-efficient rates, and
shall set as mechanism to coordinate operationally the
thrusts, objectives and activities of other government
agencies concerned with providing basic services to housing
projects. chanrobles virtual law library

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Sec. 22. Livelihood Component. To extent feasible,

socialized housing and resettlement projects shall be located
near areas where employment opportunities are accessible.
The government agencies dealing with the development of
livelihood programs and grant of livelihood loans shall give
priority to the beneficiaries of the Program. chan robles virtual law library

Sec. 23. Participation of Beneficiaries. The local

government units, in coordination with the Presidential
Commission for the Urban Poor and concerned government
agencies, shall afford Program beneficiaries or their duly
designated representatives an opportunity to be heard and
to participate in the decision-making process over matters
involving the protection and promotion of their legitimate
collective interest which shall include appropriate
documentation and feedback mechanisms. They shall also be
encouraged to organize themselves and undertake self-help
cooperative housing and other livelihood activities. They
shall assist the Government in preventing the incursions of
professional squatters and members of squatting syndicates
into their communities. cralaw

In instances when the affected beneficiaries have failed to

organized themselves or form an alliance within a reasonable
period prior to the implementation of the program of
projects affecting them, consultation between the
implementing agency and the affected beneficiaries shall be
conducted with the assistance of the Presidential
Commission for the Urban Poor and the concerned
nongovernment organization. cralaw

Sec. 24. Consultation with Private Sector. Opportunities

for adequate consultation shall be accorded to the private
sector involved in socialized housing project pursuant to
this Act.
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ARTICLE VI
AREAS FOR PRIORITY DEVELOPMENT, ZONAL
IMPROVEMENT PROGRAM SITES AND SLUM IMPROVEMENT
AND RESETTLEMENT PROGRAMS SITES
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Sec. 25. Benefits. In addition to the benefits provided

under existing laws and other related issuance to occupants
of areas for priority development, zonal improvement
program sites and slum improvement and resettlement
program sites, such occupants shall be entitled to priority in
all government projects initiated pursuant to this Act. They
shall also be entitled to the following support services:

(a) Land surveys and titling at minimal cost;

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(b) Liberalized terms on credit facilities and housing loans

and one hundred percent (100%) deduction from every
homebuyer's gross income tax of all interest payments made
on documents loans incurred for the construction or
purchase of the
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homebuyer's house;
(c) Exemption from the payment of documentary stamp tax,
registration fees, and other fees for the issuance of transfer
certificate of titles;

(d) Basic services as provided for in Section 21 of this Act;

and

(e) Such other benefits that may arise from the

implementation of this Act. chan robles virtual law library

ARTICLE VII
URBAN RENEWAL AND RESETTLEMENT
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Sec. 26. Urban Renewal and Resettlement. This shall

include the rehabilitation and development of blighted and
slum areas and the resettlement of Program beneficiaries in
accordance with the provisions of this Act. On-site
development shall be implemented whenever possible in
order to ensure minimum resettlement of the beneficiaries
of the Program from their existing places of occupancy shall
be undertaken only when on-site development is not feasible
and after compliance with the procedures laid down in
Section 28 of this Act.
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Sec. 27. Action Against Professional Squatters and

Squatting Syndicates. The local government units, in
cooperation with the Philippine National Police, the
Presidential Commission for the Urban Poor (PCUP), and the
PCUP-accredited urban poor organization in the area, shall
adopt measures to identify and effectively curtail the
nefarious and illegal activities of professional squatters and
squatting syndicates, as herein defined. chanrobles virtual law library

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Any person or group identified as such shall be summarily
evicted and their dwellings or structures demolished, and
shall be disqualified to avail of the benefits of the Program. A
public official who tolerates or abets the commission of the
abovementioned acts shall be dealt with in accordance with
existing laws. chanrobles virtual law library

For purposes of this Act, professional squatters or members

of squatting syndicates shall be imposed the penalty of six
(6) years imprisonment of a fine of not less than Sixty
thousand pesos (P60,000.00) but not more than One hundred
thousand pesos (P100,000), or both, at the discretion of the
court. cralaw

Sec. 28. Eviction and Demolition. Eviction or demolition

as a practice shall be discouraged. Eviction or demolition,
however, may be allowed under the following situations:

(a) When persons or entities occupy danger areas such as

esteros, railroad tracks, garbage dumps, riverbanks,
shorelines, waterways, and other public places such as
sidewalks, roads, parks, and playgrounds;
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(b) When government infrastructure projects with available

funding are about to be implemented; or
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(c) When there is a court order for eviction and demolition. chanrobles virtual law

library

In the execution of eviction or demolition orders involving

underprivileged and homeless citizens, the following shall be
mandatory:

(1) Notice upon the effected persons or entities at least

thirty (30) days prior to the date of eviction or demolition;
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(2) Adequate consultations on the matter of settlement with

the duly designated representatives of the families to be
resettled and the affected communities in the areas where
they are to be relocated;
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(3) Presence of local government officials or their

representatives during eviction or demolition;

(4) Proper identification of all persons taking part in the

demolition;

(5) Execution of eviction or demolition only during regular

office hours from Mondays to Fridays and during good
weather, unless the affected families consent otherwise;
(6) No use of heavy equipment for demolition except for
structures that are permanent and of concrete materials;

(7) Proper uniforms for members of the Philippine National

Police who shall occupy the first line of law enforcement and
observe proper disturbance control procedures; and

(8) Adequate relocation, whether temporary or permanent:

Provided, however, That in cases of eviction and demolition
pursuant to a court order involving underprivileged and
homeless citizens, relocation shall be undertaken by the
local government unit concerned and the National Housing
Authority with the assistance of other government agencies
within forty-five (45) days from service of notice of final
judgment by the court, after which period the said order
shall be executed: Provided, further, That should relocation
not be possible within the said period, financial assistance in
the amount equivalent to the prevailing minimum daily
wage multiplied by sixty (60) days shall be extended to the
affected families by the local government unit concerned.

This Department of the Interior and Local Government and

the Housing and Urban Development Coordinating Council
shall jointly promulgate the necessary rules and regulations
to carry out the above provision. chanrobles virtual law library

Sec. 29. Resettlement. Within two (2) years from the

effectivity of this Act, the local government units, in
coordination with the National Housing Authority, shall
implement the relocation and resettlement of persons living
in danger areas such as esteros, railroad tracks, garbage
dumps, riverbanks, shorelines, waterways, and in other
public places as sidewalks, roads, parks, and playgrounds.
The local government unit, in coordination with the National
Housing Authority, shall provide relocation or resettlement
sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet
the basic needs of the
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affected families.

Sec. 30. Prohibition Against New Illegal Structures. It

shall be unlawful for any person to construct any structure
in areas mentioned in the preceding section. chanrobles virtual law library

After the effectivity of this Act, the barangay, municipal or

city government units shall prevent the construction of any
kind of illegal dwelling units of structures within their
respective localities. The head of any local government unit
concerned who allows, abets or otherwise tolerates the
construction of any structure in violation of this section
shall be liable to administrative sanctions under existing
laws and to penal sanctions provided for in this Act.
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ARTICLE VIII
COMMUNITY MORTGAGE PROGRAM
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Sec. 31. Definition. The Community Mortgage Program

(CMP) is a mortgage financing program of the National Home
Mortgage Finance Corporation which assists legally
organized associations of underprivileged and homeless
citizens to purchase and develop a tract of land under the
concept of community ownership. The primary objective of
the program is to assist residents of blighted or depressed
areas to own the lots they occupy, or where they choose to
relocate to, and eventually improve their neighborhood and
homes to the extent of their affordability.

Sec. 32. Incentives. To encourage its wider

implementation, participants in the CMP shall be granted
with the following privileges or incentives:

(a) Government-owned or -controlled corporations and local

government units, may dispose of their idle lands suitable
for socialized housing under the CMP through negotiable
sale at prices based on acquisition cost plus financial
carrying costs;
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(b) Properties sold under the CMP shall be exempted from

the capital gains tax; and
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(c) Beneficiaries under the CMP shall not be evicted nor

dispossessed of their lands or improvements unless they
have incurred arrangements in payments of amortizations
for three (3) months. chanrobles virtual law library

Sec. 33. Organization of Beneficiaries. Beneficiaries of

the Program shall be responsible for their organization into
associations to manage their subdivisions or places of
residence, to secure housing loans under existing
Community Mortgage Program and such other projects
beneficiaries to them. Subject to such rules and regulations
to be promulgated by the National Home Mortgage Finance
Corporation, associations organized pursuant to this Act
may collectively acquire and own lands covered by this
Program. Where the beneficiaries fail to form an association
by and among themselves, the National Home Mortgage
Finance Corporation shall initiate the organization of the
same in coordination with the Presidential Commission for
the Urban Poor and the local government units concerned.
No person who is not a bona fide resident of the area shall be
a member or officer of such association. chanrobles virtual law library

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ARTICLE IX
RELATED STRATEGIES
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Sec. 34. Promotion of Indigenous Housing Materials and

Technologies. The local government units, in cooperation
with the National Housing Authority, Technology and
Livelihood Resource Center, and other concerned agencies,
shall promote the production and use of indigenous,
alternative, and low-cost construction materials and
technologies for socialized housing. chanrobles virtual law library

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Sec. 35. Transport System. The local government units,

in coordination with the Departments of Transportation and
Communications, Budget and Management, Trade and
Industry, Finance, and Public Works and Highways, the
Home Insurance Guaranty Corporation, and other concerned
government agencies, shall device a set of mechanisms
including incentives to the private sector so that a viable
transport system shall evolve and develop in the urban
areas. It shall also formulate standards designed to attain
these objectives:

(a) Smooth flow of traffic;

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(b) Safety and convenience of travel;

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(c) Minimum use of land space;

(d) Minimum damage to the physical environment; and

(e) Adequate and efficient transport service to the people

and goods at minimum cost.

Sec. 36. Ecological Balance. The local government units

shall coordinate with the Department of Environment and
Natural Resources in taking measures that will plan and
regulate urban activities for the conservation and protection
of vital, unique and sensitive ecosystems, scenic landscapes,
cultural sites and other similar resource areas. chanrobles virtual law library

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To make the implementation of this function more effective,

the active participation of the citizenry in environmental
rehabilitation and in decision-making process shall be
promoted and encouraged. The local government units shall
recommend to the Environmental and Management Bureau
the immediate closure of factories, mines and transport
companies which are found to be causing massive pollution. chanrobles

virtual law library

Sec. 37. Population Movements. The local government

units shall set up an effective mechanism, together with the
appropriate agencies like the Population Commission, the
National Economic and Development Authority and the
National Statistics Office, to monitor trends in the
movements of population from rural to urban, urban to
urban, and urban to rural areas. They shall identify measures
by which such movements can be influenced to achieve
balance between urban capabilities and population, to direct
appropriate segments of the population into areas where
they can have access to opportunities to improve their lives
and to contribute to national growth and recommend
proposed legislation to Congress, if necessary.

The Population Commission, the National Economic and

Development Authority, and the National Statistics Office
shall likewise provided advanced planning information to
national and local government planners on population
projections and the consequent level of services needed in
particular urban and urbanizable areas. This service will
include early-warning systems on expected dysfunctions in a
particular urban area due to population increases, decreases,
or age structure changes. cralaw

Sec. 38. Urban-rural Interdependence. To minimize rural

to urban migration and pursue urban decentralization, the
local government units shall coordinate with the National
Economic and Development Authority and other government
agencies in the formulation of national development
programs that will stimulate economic growth and promote
socioeconomic development in the countryside.
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ARTICLE X
PROGRAM IMPLEMENTATION
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Sec. 39. Role of Local Government Units. The local

government units shall be charged with the implementation
of this Act in their respective localities, in coordination with
the Housing and Urban Development Coordinating Council,
the national housing agencies, the Presidential Commission
for the Urban Poor, the private sector and other
nongovernment
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organizations.

They shall prepare a comprehensive land use plan for their

respective localities in accordance with the provisions of
this Act. chanrobles virtual law library

Sec. 40. Role of Government Housing Agencies. In

addition to their respective existing powers and functions,
and those provided for in this Act, the hereunder mentioned
housing agencies shall perform the following:

(a) The Housing and Urban Development Coordinating

Council shall, through the key housing agencies, provide
local government units with necessary support such as:
(1) Formulation of standards and guidelines as well as
providing technical support in the preparation of town and
land use plans;
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(2) In coordination with the National Economic and

Development Authority and the National Statistics Office,
provide data and information for forward-planning by the
local government units in their areas, particularly on
projections as to the population and development trends in
their localities and the corresponding investment programs
needed to provide appropriate types and levels of
infrastructure, utilities, services and land use patterns; and
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(3) Assistance in obtaining funds and other resources needed

in the urban development and housing programs in their
areas of responsibility. chanrobles virtual law library

(b) The National Housing Authority, upon request of local

government units, shall provide technical and other forms of
assistance in the implementation of their respective urban
development and housing programs with the objective of
augmenting and enhancing local government capabilities in
the provision of housing benefits to their constituents;

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(c) The National Home Mortgage Finance Corporation shall

administer the Community Mortgage Program under this Act
and promulgate rules and regulations necessary to carry out
the provisions of this Act; and
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(d) The Home Insurance Guaranty Corporation shall design

an appropriate guarantee scheme to encourage financial
institutions to go into direct lending for housing. chanrobles virtual law library

Sec. 41. Annual Report. The Housing and Urban

Development Coordinating Council and the local government
units shall submit a detailed annual report with respect to
the implementation of this Act to the President and the
Congress of the Republic of the Philippines. chanrobles virtual law library

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ARTICLE XI
FUNDING
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Sec. 42. Funding. Funds for the urban development and

housing program shall come from the following sources:

(a) A minimum of fifty percent (50%) from the annual net

income of the Public Estate Authority, to be used by the
National Housing Authority to carry out its programs of land
acquisition for resettlement purposes under this Act;
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(b) Proceeds from the disposition of ill-gotten wealth, not

otherwise previously set aside for any other purpose, shall
be applied to the implementation of this Act shall be
administered by the National Home Mortgage Finance
Corporation;
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(c) Loans, grants, bequests and donations, whether from

local or foreign sources;

(d) Flotation of bonds, subject to the guidelines to be set by

the Monetary Board;

(e) Proceeds from the social housing tax and, subject to the
concurrence of the local government units concerned, idle
lands tax as provided in Section 236 of the Local
Government Code of 1991 and other existing laws;

(f) Proceeds from the date or disposition of alienable public

lands in urban areas; and

(g) Domestic and foreign investment or financing through

appropriate arrangements like the build-operate-and-transfer
scheme.
Sec. 43. Socialized Housing Tax. Consistent with the
constitutional principle that the ownership and enjoyment
of property bear a social function and to raise funds for the
Program, all local government units are hereby authorized to
impose an additional one-half percent (0.5%) tax on the
assessed value of all lands in urban areas in excess of Fifty
thousand pesos (P50,000).

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ARTICLE XII
TRANSITORY PROVISIONS
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Sec. 44. Moratorium on Eviction and Demolition. There

shall be a moratorium on the eviction of all program
beneficiaries and on the demolition of their houses or
dwelling units for a period of three (3) years from the
effectivity of this Act: Provided, That the moratorium shall
not apply to those persons who have constructed their
structures after the effectivity of this Act and for cases
enumerated in Section 28 hereof. chanrobles virtual law library

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ARTICLE XIII
COMMON PROVISIONS
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Sec. 45. Penalty Clause. Any person who violates any

provision of this Act shall be imposed the penalty of not
more than six (6) years of imprisonment or a fine of not less
than Five thousand pesos (P5,000) but not more than One
hundred thousand pesos (P100,000), or both, at the
discretion of the court: Provided, That, if the offender is a
corporation, partnership, association or other juridical
entity, the penalty shall be imposed on the officer or officers
of said corporation, partnership, association or juridical
entity who caused the violation. chanrobles virtual law library

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Sec. 46. Appropriations. The amount necessary to carry

out the purposes of this Act shall be included in the annual
budget of implementing agencies in the General
Appropriations Act of the year following its enactment into
law and every year thereafter. chanrobles virtual law library

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Sec. 47. Separability Clause. If for any reason, any
provision of this Act shall be included in the annual budget
of implementing agencies in the General Appropriations Act
of the year following its enactment into law and every year
thereafter.
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Sec. 48. Repealing Clause. All laws, decrees, executive

orders, proclamations, rules and regulations, and other
issuances, or parts thereof which are inconsistent with the
provisions of this Act, are hereby repealed or modified
accordingly.

Sec. 49. Effectivity Clause. This Act shall take effect

upon its publication in at least two (2) national newspapers
of general circulation. chan robles virtual law library

Approved: March 24, 1992