Vice President Jejomar Binay. INQUIRER FILE PHOTO
MANILA, Philippines –The Rent Control Act of 2009, which puts a 7-percen rent raise cap every year on residential units, has been extended by the Housing and Urban Development Coordinating Council (HUDCC) for another two years, Vice President and concurrent HUDCC chairman Jejomar Binay said on Wednesday.
The law was set to expire on December 31, 2013.
The rent raise cap applies to residential units in the National Capital Region and other highly urbanized cities whose monthly rent does not exceed P10,000, and those in other areas with rental rates up to P5,000 a month.
Under the law, rents on the said housing units should not be increased by more than seven percent annually as long as the units are occupied by the same lessees.
“We want to help renting families have a breathing room given the recent increases in power rates and the natural calamities we experienced,” Binay said in a separate statement.
Section 6 of the law grants HUDCC the authority “to continue the regulation of the rental of certain residential units, to determine the period of regulation and its subsequent extension if warranted, to determine the residential units covered and to adjust the allowable limit on rental increases per annum.”
Binay said the decision to extend the rent law until December 2015 was based on the initial results of a study commissioned by the agency.
The study was conducted by the Statistical Research and Training Center (SRTC), an attached agency of the National Economic and Development Authority (NEDA).
Binay said preliminary results of the study showed that about 1.5 million households or 7.2 percent of the total 21.5 million households nationwide are renters. Of this, 97 percent pay P10,000 and below monthly, he said.
In 2012, the monthly average family income of renters in the country was P23,968, with P27,246 for NCR and P20,794 for other areas. Families in NCR spend about 12.4 percent of their income for house rent.
But the above findings, Binay said, have to be validated as the final figures on housing from the 2010 Census of Population and Housing were still not available.
The study also needs additional data such as the Wholesale Price Index for Construction Materials, Real Estate Price Index and Depreciation Costs, among others, to provide a comprehensive analysis on rental regulation.
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