2021 DHSUD edict flagged for infirmities

The Department of Justice (DoJ) has flagged a Department of Human Settlements and Urban Development (DHSUD) order issued in 2021 stipulating the guidelines on balanced housing compliance and its utilization.

In an opinion dated 3 February 2026, the DoJ cited legal infirmities in DHSUD’s Department Order (DO) 2021-004, particularly on provisions that effectively reduced the required percentage of developers’ participation in the Balanced Housing Development Program (BHDP) under Republic Act 7279, as amended by RA 10884.

Recently, the Chamber of Real Estate Builders Association (CREBA) sought to “reduce incentivized compliance rate from 25 percent to 10 percent of the BHDP. 

It must be recognized that the incentivized compliance is non-recoverable. It functions as an upfront loss. 

A 10 percent cap preserved social housing funding while keeping projects financeable. Better 10 percent of many projects than 25 percent of none.”

In its opinion, the DoJ reiterated and declared that, “in DoJ Opinion 37, s. In 2024, we advised that the incentivized compliance, while not expressly provided under Republic Act (RA) 72793, as amended by RA 10884, is consistent with the object and purpose of the law. 

Executive overreach

However, we noted that DO 2021-004 suffers from legal infirmities regarding the effective reduction of the required participation percentage from the statutory minimum of 15 percent or 5 percent, as the case may be, to only 25 percent thereof. 

To explain further, the participation percentage set under RA 7279, as amended, reflects a legislative determination of what constitutes a fair contribution by private developers to socialized housing by authorizing compliance below this standard. DO 2021-004, in effect, substitutes administrative discretion for legislative prerogative. 

While it may be argued that the non-salable and non-recoverable nature of incentivized compliance justifies the reduction, the statute itself makes no such distinction.”

The opinion further stated that until Congress amends RA 7279, as amended, or expressly authorizes a different scheme, the department cannot, through an administrative issuance, modify the prescribed percentage of participation or broaden the allocation of compliance funds.

The DHSUD remains committed to upholding the rule of law while sustaining programs that advance socialized housing for underprivileged and homeless families. 

A department order in compliance with the DoJ findings will be issued, and developers will be given sufficient time to comply with its provisions.   DT