Even the dogs know

Transgenders

Savages and barbarians

ROTC

Rizal, Roco and Robin

*My articles on housing ("Even the Dogs Know" and "Home is Where the Heart Is")referred to Hernando De Soto's "The Mystery of Capital".  Apparently, the President has read the book as well and is now using it for her housing plans.   I saw copies of the book at Page One in the Rockwell center.  If they've sold out, place an order with one of our bookstores.  The publisher is Basic Books (New York). 

Home is where the heart is

M. L. Tan

The other day I saw a woman alighting from a jeep with a bag that had these words cross-stitched, "Home is where the heart is." Unfortunately for some 3 million Filipino families, that’s about it in terms of a home, a place in the heart. These are the families who have to pay rents that consume so much of their income that the dreams to own a house and lot will have to remain dreams.

Last Tuesday I wrote about the chaotic land titling system we have and how this prevents many Filipinos from acquiring property. I referred to a book by Hernando De Soto, entitled "The Mystery of Capital", emphasizing the need to help the poor to acquire property. De Soto says that western countries started out like many Third World countries today with widespread poverty but was eventually able to develop capitalism by expanding home ownership, both in rural and urban areas. This happens because people can use their property as collateral for bank loans to start new ventures and to allow capital to grow.

De Soto’s research included a study of the Philippines and the researchers found that squatters and the urban poor will invest in housing, even if their land is disputed. They estimate that this "untitled real estate" in the Philippines has a value of about US$133 billion in the Philippines, seven times the value of total deposits in our commercial banks!

But all this is dead capital because no bank will accept such housing as collateral. That’s US$133 billion worth of stagnant assets. As I read De Soto I realized it was more than the squatters’ investments that go to waste. For the legal land owners, a piece of property with squatters is also useless. You can’t build on it and you can’t use it as collateral with banks. The squatters won’t leave, and the landowners are unwilling to give up the land, hoping the land prices will go up. (That of course isn’t happening because we’re just moving from one crisis to another). Everyone loses.

There are so many other problems that come out of our system, which do not appear in De Soto’s book. Paying rent is like burning money, consuming resources that could have been used for a family’s other economic and social investments. I’ve seen this in other developing countries – if housing is assured either through low rents or affordable purchase schemes, even low income families get to afford important perks, getting a child to learn a musical instrument for example, or buying more books, or taking a family vacation.

There are other consequences resulting from this massive disenfranchisement of people’s right to a home. A depressed housing sector, like we have today where no one’s buying, affects many sectors, from suppliers of construction supplies to the interior decorators. But the ones who suffer the most are again the poor, from whose ranks come the construction workers.

Other losses may not always be as obvious. Many years back when I was handling health projects with the Catholic church's social action programs, older colleagues warned me it was next to impossible to start health programs in urban poor areas. Without land tenure, they explained, the urban poor were unwilling to "invest" in long-term programs such as health. Why build toilets or organize health groups when you might be ejected next week or next month?

My colleagues were right. Today Metro Manila is one big dump, people who don’t care about the environment because they have no stakes in it. Without a sense of a home, you can’t expect people to think of the neighborhood or community, much less the nation.

It’s not a hopeless situation. Drive around Tondo and you can tell who owns their homes. These are the areas where militant urban poor organizations were able to fight for land ownership. Just like our subdivisions, these communities are very conscious about their environment, from sanitation concerns to peace and order. The houses are small but they exude the warmth of families proud of their homes.

Even socialist China has recognized the importance of home ownership. In the past government provided public housing with very low rents. Now they’re raising the rents, pointing out to families that with a little more money they can afford monthly amortizations that will eventually lead to ownership of the homes.

It makes sense. Even in China, where home ownership is in the form of a long-term lease, people are encouraged to go for that home because they can pass on the property to their children. This gives them incentive to save more, to pay the amortizations and to go for home improvements.

I wrote in my last column that Gloria Macapagal has a chance to leave a lasting legacy by working on housing projects. I am always amazed at how the poor will go, "Ang laki!" when they see apartments with a floor area of 40 to 50 square meters. The poor’s dreams are so minimal, and yet so beyond their reach.

De Soto makes a good point about the development of capitalism by ensuring people’s ownership of a home. But there’s more to this than economics. Provide sound housing with green areas for recreation and you create a future for many Filipinos. You’ll see crime rates go down as the young grow up in a healthier environment and the adults themselves become more conscious about preventing crime in the neighborhood. You’ll see cleaner cities as people maintain and improve their homes. I suspect, too, you’ll find productivity going up as people have more incentives to work hard, knowing their money goes toward that house, a place one can return to at the end of the day, a home where the heart is.