Rising land prices in Java slowing housing program<\/p>\n
JAKARTA (JP): Soaring land prices in Java are hampering the
\ngovernment's effort to build inexpensive houses, according to
\nState Minister of People's Housing Akbar Tanjung.<\/p>\n
Akbar told reporters after reporting to President Soeharto at
\nBina Graha presidential office yesterday that the government's
\nhousing program is progressing according to schedule in all parts
\nof Indonesia except on Java.<\/p>\n
He explained that about two-thirds of the inexpensive houses
\nwhich the government hopes to build in the current Sixth Five
\nYear Development Plan (Repelita VI) are on Java.<\/p>\n
The government, he added, could only afford to pay up to Rp
\n7,000 or Rp 8,000 a square meter for the land on which to build
\ninexpensive houses. This means that on Java, it could only build
\nin areas far from the urban centers.<\/p>\n
The government is counting on the help of private developers
\nto realize its ambitious Rp 2.9 trillion ($1.38 billion) program
\nto build 500,000 units of inexpensive houses during the Repelita
\nVI which began on April 1.<\/p>\n
It is compelling developers to build six "Very Simple Houses"
\nfor every three "Middle Houses" and one "Luxury House".<\/p>\n
Akbar said a number of developers in Jakarta and Surabaya have
\npledged to abide by this program, but they are having problems
\nnow because the high land prices are eating into their already
\nsmall profit margins.<\/p>\n
The selling prices of inexpensive houses are set by the
\ngovernment.<\/p>\n
The government is now looking at ways of overcoming the
\nproblems of soaring land prices, Akbar said.<\/p>\n
Alternative<\/p>\n
One alternative being considered is to give developers greater
\nleeway in using the credits they receive from the state owned
\nbank BTN. If they are presently allowed to use up to 50 percent
\nof the credit to clear the land, this ceiling could be raised to
\n75 percent, he said. This is being discussed with the bank.<\/p>\n
The government is also pondering ways to stabilize the price
\nof cement, which is also a main component in the cost, and for
\nthis Akbar said his office is setting up a "Cement Team" to
\ncoordinate the supply of cement throughout Indonesia.<\/p>\n
Another suggestion, this one by President Soeharto, is using
\ntimber seized from smugglers and illegal loggers which is now
\npiling up, according to Akbar.<\/p>\n
The minister said he is still optimistic that the government's
\nhousing program will be realized despite the problems in the
\nfield.<\/p>\n
The demand is already there and it will continue to increase
\nespecially now that the terms for the home ownership loan scheme
\nfor civil servants have been eased and that those who have
\nalready worked for five years are entitled to apply.<\/p>\n
For Jakarta and other cities like Medan and Surabaya, the
\ngovernment is encouraging the construction of low cost apartments
\ninstead of houses because of severe land shortages, Akbar said.<\/p>\n
He said the state housing developer Perum Perumnas is now
\ndiscussing with the Real Estate Indonesia, the association of
\ndevelopers, the prospect of building low cost apartments.<\/p>\n
Most of the apartments that are now being built in Jakarta and
\nSurabaya are destined chiefly for the wealthier members of
\nsociety. (emb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rising-land-prices-in-java-slowing-housing-program-1447893297",
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