A friend of a friend was planning to convert their farm into a residential subdivision for financial purposes. Subdivision lots definitely is much higher in value than a farm lot. However, they encountered a problem with the DENR (department of Environment and Natural Resources). Not all lands can be made into residential lots because there are so many requirements to satisfy. First is the natural waterway that cannot be blocked nor diverted. Second is the presence of trees, they will be counted and the number of trees should be retained. You can guess that the conversion did not push through.
Suссеssfully subdividing yоur lаnd intо rеsidеntiаl lоts саn hаvе mаny bеnеfits, inсluding prоviding а lаndоwnеr bоth inсrеаsеd prоfits аnd flеxibility. If yоu аrе buying оr аlrеаdy hаvе а lаrgе pаrсеl оf lаnd fоr sаlе, оr еvеn а hоmе lоt thаt hаs “еxtrа” lаnd аrеа, yоu mаy wish tо соnsidеr whеthеr subdividing yоur lаnd саn hеlp yоu mаximizе yоur rеаl еstаtе rеsоurсеs, sоmеthing thаt mаny lаndоwnеrs аrе еvаluаting in thе сurrеnt mаrkеt соnditiоns.
I think converting a large parcel of land into a residential subdivision is a good business idea but it also entails a big amount of budget and paper works to be able to do it. The first thing that really needs to be considered is the approval and clearance of the DENR for a person to be able to cut the trees even in his own property and other factors that need to be considered. I remember a controversial parking lot project in a famous mall where I live. The mall owns the lot but until now the project hasn't pushed through because of disapproval from residents despite the clearance they secured from DENR. With this, I sometimes think to myself, "what's the use of owning a land then if you don't really have the freedom to do whatever you want with it?" I just think it's also unfair at times for the land owner who only wants to benefit from a land he/she has also worked hard to buy.
You have to be mindful of existing real estate laws before converting a farm land into a residential area or subdivision. In fact, farm lands have more land area than the biggest residential lots in the country. If you notice, in the Philippines, lands are cheaper and you can own more farm lands than you can own residential lots. That's because farm lands are usually found in rural areas and the cost of living there is low. You cannot own hectares of residential land in big cities because that would be detrimental to urban development. You need to ask permission from the government in order to convert farm lands to subdivisions and this usually comes with a hefty price tag. The price of the land doubles up as well. You cannot pay the usual farm land rate. You will have to pay for the commercial rate.
You are right on that - there are many permits required for converting farm lands into residential subdivision. First is the local community called barangay, their clearance is needed before you can negotiate with the government agencies particularly the LRA (land registration authority) and the DENR (department of environment and natural resources). From an experience that I know, working on the permits would need 6 months and a substantial amount for fees and incidental expenses.
In actual fact, I could classify the division and conversion of arable land into residential plots to be an emergency of sorts. The world is experiencing food price hikes while this is going on. I think such developments should embrace the policy of decentralization which involves creating nucleus industries in marginal lands which would not impact on food production.
