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Cebu's Housing Crisis: A Facade of Progress

People take to the streets to protest, with signs expressing their anger at being forced out of their neighborhood.

People take to the streets to protest, with signs expressing their anger at being forced out of their neighborhood.

The New Cebu City

Roaming the streets of Cebu City, whether by jeepney, bus, or taxi, you can’t miss the tall buildings lined up lording over the skies. On sunnier days, their glass windows glisten and amplify the glare. And on cloudier ones, their massive figures cast shadows turning the landscape gray.

As a child tourist 20 years ago, there weren’t that many developments when I visited Cebu. I remember seeing long, unoccupied urban blocks from side to side as my father breezed through metro traffic across the cities of Cebu, Mandaue, and Lapu-Lapu with our pickup truck.

Today, as a full-fledged adult resident, "traffic" has become more accurate in its meaning—there are no empty city blocks, there are skyscrapers at every turn, and the roads are always jammed.

And the "progress" that local politicians keep boasting about seems to be predicated on a worsening social divide.

I don’t pretend to know Cebu, its rise to glory, and its understated infamy. But I am able to view it through a lens that many who have lived here, especially locals, have for at least the last decade—especially shortly after The Great Recession.

The financial crisis of 2008 shook the entire world, and the Philippines was no exception. But the recession worked out well for developing countries, as many companies in Western countries offshored more jobs to reduce costs.

And a few years later, outsourcing to major cities in countries with cheap labor—outsourcing to Cebu—took off. Exponential growth in this sector became the norm, but silently, something else was growing in Cebu.

A Simplified History of Cebu

To have a better context of the social effects of Cebu’s drastic urban development, we need a quick history lesson. Here’s a condensed timeline of Cebu’s "progress," which gave way to transforming it into the metropolis we know today:

1521: Ferdinand Magellan arrives in Cebu (Lapu-Lapu), setting the stage for Spanish colonialism.

1565: Cebu is founded as a Spanish colony, grabbing its title as the Philippines’ oldest city. This is also when Colon Street, the oldest road in the country, is built.

1595: University of San Carlos, the oldest school in the Philippines, is established.

1860: Cebu is opened to foreign trade.

1901: Cebu becomes a municipality.

1937: Cebu becomes a chartered city.

1938: The Cebu Landing Field, or the Lahug Cebu National Airport, is designated by President Quezon as a military airport. Several decades later its grounds would be the home of Cebu I.T. Park (formerly Asiatown I.T. Park), where today the offices of international brands and their call centers reside—the likes of UnitedHealth, JPMorgan Chase & Co., Accenture, NCR Corporation, Concentrix, Cognizant, TeleTech, and many others.

1956: The United States Air Force builds the runway for an emergency airport known as the Mactan Air Base. The place it was built on would later become the Mactan-Cebu International Airport.

1979: Cebu is classified as a highly urbanized city.

1989: Cebu Business Park is founded, a 50-hectare commercial development where many offices of international brands such as Accenture, Amazon, and IBM reside today. This is also the year former Cebu City mayor Tommy Osmeña proposes the idea of the 300-hectare reclamation project that would be known as the South Road Properties (SRP), where the largest bridge in the country, CCLEX, can be found today.

1995: Tommy Osmeña secures funding for the SRP reclamation project.

2001: The 27-hectare Cebu I.T. Park is officially granted special economic zone status, a year after it was recognized as an information technology park.

2003: The National Economic Development Authority (NEDA) approves the construction of the SRP.

2021: Cebu province tallies over PHP 215 billion (~3.8 billion USD) in assets, bagging the title of richest province in the Philippines for the 8th straight year.

Property Development in Cebu

There’s much that can be said about Cebu’s urban development, and I notably missed to mention on my simplified timeline the improvements made to Cebu’s seaports. The seaport development side of Cebu’s history is another important tale, and is perhaps better saved for another day.

The harsh reality about Cebu’s breakneck pace of property development is that it follows a pattern from many places around the world where local officials are drunk with the taste of foreign investment. The theory is that if you can attract enough takers willing to hose their stream of cash onto your land, you can have your very own "global city."

After all, economic production can be summed up with a simple formula:

Production = Land + Labor + Capital

The land, Cebu has solved with reclamation projects and abandoned military camps. The labor, it gets from an endless supply of local immigrants. And the capital is there because the first two factors are there in abundant supply and hard to pass up for any investor.

That said, continuously improving a city is not a process rooted under evil intentions. Because of the many wealthy companies who’ve set up shop here, more high-income jobs are available for the taking.

This has translated into more chances for ordinary people—especially those who come from poor backgrounds—to lift themselves out of poverty. All sorts of Filipinos from far-flung forgotten barrios, with or without a college degree, have found work in Cebu.

It’s a labor-driven local migration. And it’s mutually beneficial—for a city like Cebu who needs labor to keep progressing, and for the people who can’t find enough opportunities back home. Still, here's the question that keeps bugging me:

All of these high-infra developments—the malls, the long bridges, the condominiums, the casinos—just who are all of these buildings for?

Hopefully, answering the questions that follow can enlighten us some.

Cebu Reality Check FAQs

Looking up at the rows of condominiums around the city, it’s hard for me not to think about gentrification. Is gentrification happening in Cebu? Are the living spaces supposedly built for the benefit of the whole populace anywhere close to what an ordinary person can afford?

How much does it cost to live in Cebu condominiums?

I’ve been looking up condo prices in Cebu every year since 2019. They’ve fluctuated here and there, especially during the pandemic when there was a short-lived mass exodus, a time when workers were allowed to work remotely full-time.

A 2022 ballpark figure is that the low-end monthly rent for a studio unit is at PHP 12,000 (roughly 210 USD). And this is rent for a place from a distance of a 15-minute taxi to urban hubs like the Cebu Business Park and the I.T. Park. If you want to live in these places or at least walking distance, the lowest monthly rent comes to PHP 15,000 (~260 USD).

The high-end condominiums, those with 1–2 bedrooms and usually within walking distance from activity centers, cost 18,000 pesos at the lowest end. Some cost as much as 30,000 pesos a month, and I’ve seen listings worth 60,000 in newer, "luxury" condominiums.

Can an ordinary worker afford living in Cebu condominiums?

According to Indeed, in 2022 figures, the average monthly salary for an office worker in Cebu is 12,000 pesos. This figure, however, is hard to believe. Some sites like peg it at 50,600 pesos, which is more believable, and you can corroborate it by doing a casual scroll in JobStreet.

Also, in JobStreet you can find that roughly 5% of the postings advertise jobs with six-figure monthly salaries. But these are hardly for those looking for entry level positions, not even those with intermediate experience.

Comparing the numbers here vs. the numbers on the previous question, you can infer that no, the ordinary worker can’t afford to live inside the condominiums that keep sprouting up all over the city.

And as a frame of reference, from my previous job where most of my colleagues were R&D designers and engineers, I learned that many of them didn’t live in condos. The vast majority stayed in boarding houses or studio units inside mixed-use buildings, while others chose to continue living in their house from 1–2 cities away. They chose to bear the brunt of a two-hour daily ride to the office.

Who can afford to live in these highly developed urban areas?

Cebu, in some ways, is a miniature type of New York. Strictly speaking, it’s far from being the melting pot of culture and diversity that is New York City (disclaimer: I haven’t been there). But somehow, this idea of "New York" where you open up your city to people from around the world because of money, seems to be the direction Cebu is heading.

If ordinary people, typical wage earners, local immigrants, or Cebuanos can’t afford to live anywhere inside these rows of condos, then I have to assume that a particular class of people have chosen to settle down here—and transplanted their lives into these cereal box buildings.

Once you’ve learned to look, you’ll start noticing them everywhere—foreigners in shorts, usually in their seventies. They hardly take the jeepneys that ply the roads all day, probably because they can’t fit inside them. If they don’t ride taxis, they’re content on walking dirty sidewalks—so long as they don’t have to brush elbows and knees inside cramped multi-cabs.

It’s safe to say they occupy these expensive condos an ordinary worker can’t touch, and they likely rent it out when they take a vacation overseas.

But they’re not the only ones. We don’t see them as much, except inside posh malls where they dine at fancy restaurants—they’re an elite class of Chinese Filipinos. Americans or Westerners aren’t the only business moguls living in the oldest Filipino city that is Cebu.

Due to the fact that foreigners have limited ownership rights in the Philippines, it’s instead a wealthy group of Filipinos who own the hospitals, the malls, the resorts, and the casinos.

Normally, you only hear of Gokongwei, Sy, and Tan when you think of the elite Chinese-Filipino class, but in Cebu, it goes deeper than that. Rabbit holes will need to be dug for you to see the paper trail, but it’s all there.

A Classic Case of Gentrification

And what is the silent, but gradually degrading effect of having all these real estate developments pop up, with only foreigner retirees and elite citizens being able to afford them? Social tension. Unrest.

The Guardian compiled the following testimonies of gentrification from around the world. They sound like horror stories of what’s to come in Cebu.

  • Amsterdam, the Netherlands: “Waiting time for a house in this neighborhood used to be eight years, now it is 18 years. The biggest ruling party has even worse plans; they want to give the social houses only to working people, saying jobless people should leave the city.”
  • Silicon Valley, U.S.: “Every time there’s a boom in Silicon Valley, something like six times more jobs are created than homes built. People are casually displaced every day and $1,000 a month rent hikes are not uncommon.”
  • Bath, UK: “The prospect of seeing our lovely peaceful village-type estate being demolished and replaced with upmarket homes at top market prices is creating anxiety and illness.”
  • Lisbon, Portugal: “Entire block of homes are being converted to short-term rental apartments and hostels. Landlords are evicting people to start a touristic business every day.”
  • Chicago, U.S.: “As a lifelong resident of the north-west side of Chicago, I’m afraid of there coming a day when I don’t recognize my neighborhood, when the stores, the people, the library are all gone. That gets to the root of gentrification: this loss of familiarity and home.”
  • Berlin, Germany: “An acquaintance has rented four flats at a low rate, and rents them all out through Airbnb. It’s become a very profitable full-time job for him.”
  • Somerville, U.S.: “Property values are increasing at an average of 10% per year, condo conversion and rent increases are rampant, and new development is pricing out small businesses and contributing to displacement of low-income and immigrant residents.”
  • Mexico City, Mexico: “Displacement of poor people out of gentrified neighborhoods is a serious issue here: people have to move to housing projects that are located 50km away from the city centre.”
  • Portland, U.S.: “The cult of efficiency, unchecked and ungrounded is the universal salve that greases the way to community destruction and dislocation.”

At some point, hopefully not too late, rent caps and adequate social housing need to be in place for the benefit of Cebu’s regular citizens.

Consequences For Ordinary Cebu Citizens

Seemingly endless urban development is a sign that a local economy is booming. But it’s also a symptom of social class segregation. Tourism is just the appetizer for foreigners who ultimately find that a city like Cebu is a livable and affordable place of residence for the income they already have. They’ll think: "Why not settle down here? Everything’s cheap, the beaches are nice, the malls are fancy and new."

But what about those people who come here to earn income? Will there be enough boarding houses and shady rented-out spaces in slums to live in? It's likely that they’ll be forced to live far away from the city—a city that has gradually become exclusive for retirees and elites.

But hating on these one-percenters would be missing the point. Because policies and conditions are simply there allowing for all of this to happen. Instead, what Cebu needs are measures to safeguard the right of ordinary citizens to affordable housing.

And as long as the insatiable appetite for investment continues without diet, or at the very least a quick pause to look in the mirror, then we might be in for consequences beyond our imagination.

This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.

© 2022 Greg de la Cruz