The Department of Justice (DOJ) has thrown a legal wrench into how property developers meet their socialized housing obligations, declaring key portions of a 2021 housing department order legally infirm.
In a February 3, 2026 opinion, the DOJ said the Department of Human Settlements and Urban Development (DHSUD) overstepped when it effectively lowered developers’ compliance requirements under the Balanced Housing Law.
Republic Act 7279, as amended by RA 10884, mandates that developers allocate a fixed percentage of project cost or area to socialized housing. But DHSUD Department Order No. 2021-004 expanded the use of “incentivized compliance,” a mechanism the DOJ said allowed firms to meet obligations below the statutory minimum.
That, the DOJ stressed, crosses a bright legal line.
While acknowledging that incentivized compliance may support the spirit of the law, the opinion made clear that administrative issuances cannot amend what Congress has set in stone. Only legislation — not department orders — can revise compliance rates or redefine how housing funds are deployed.
The ruling lands amid industry pressure to ease requirements. The Chamber of Real Estate Builders Association (CREBA) had pushed to cut incentivized compliance from 25 percent to 10 percent, arguing the current framework is non-recoverable and threatens project viability.
For developers, the message is blunt: statutory quotas still rule.
DHSUD said it will craft a new department order aligned with the DOJ opinion and provide a transition period for the industry. At the same time, the agency reaffirmed its commitment to boosting housing access for underprivileged and homeless families.
The reset signals tighter guardrails ahead — and fewer shortcuts — in balancing profit and public housing mandates.
