Developers pocketing subsidies: Minister<\/p>\n
JAKARTA (JP): Many developers of small and very small basic
\nhouses have pocketed some of the government subsidy designated
\nfor buyers of low-cost houses, Minister of Agrarian Affairs Soni
\nHarsono said yesterday.<\/p>\n
Soni, who is also chairman of the National Land Agency, said
\nhis office has subsidized the fees of land certificates for
\nsimple and very simple houses.<\/p>\n
The intended use of the subsidy is to reduce the sales price
\nof small houses so that those who are entitled to buy the houses
\ncan benefit indirectly from the subsidy.<\/p>\n
However, Soni said, the end users can hardly enjoy the subsidy
\nbecause the house prices continue to increase. He alleged that
\nthe subsidy is enjoyed by developers who build the small houses.<\/p>\n
\"What then is the point of a subsidy for the needy if the
\nsubsidy is enjoyed by the developers, not by the buyers?\" Soni
\nqueried at a seminar on community-based housing organized by
\nstate-owned Bank Tabungan Negara.<\/p>\n
Soni admitted that the rise in small house prices is due to
\nthe rise in prices of building materials.<\/p>\n
However, Soni said developers often enjoyed abnormally high
\nprofits by raising sales prices disproportionally to the costs of
\nbuilding materials.<\/p>\n
He said the prices of houses built by developers in Greater
\nJakarta stands at 360 percent of the prices of houses built by
\nfirms which do not obtain subsidies from his office.<\/p>\n
Soni explained that the prices of small houses built by
\ndevelopers in Greater Jakarta should average Rp 300,000 (US$131)
\nper square meter. However, several developers often charge
\ncustomers between Rp 400,000 and Rp 750,000 per square meter.<\/p>\n
\"Those developers must be forced to give cross subsidies to
\nlow-income buyers. Otherwise, low-income people will never be
\nable to buy even tiny houses,\" Soni said.<\/p>\n
The government has required all developers to build six small
\nlow-cost houses and three medium-size houses for each luxury
\nhouse they construct. However, critics have said that many
\ndevelopers have not complied with the ruling. (rid)<\/p>",
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