'Better coordination vital in building cheap houses'

'Better coordination vital in building cheap houses'

JAKARTA (JP): Better coordination between government bodies
and the Association of Indonesian Developers is needed to enforce
rules on building cheap housing, a property consultant said
Friday.

At least 23 developers in Jakarta, Bogor, Tangerang and Bekasi
have yet to build cheap houses in line with government rules,
said the Center for Indonesian Property Studies (PSPI) research
director Panangian Simanungkalit.

These developers, which have 92,000 hectares have used just
200 hectares each, he said.

Panangian said the State Ministry of Public Housing and the
Association of Indonesian Developers should do their "homework"
and urge developers to fulfill their obligations.

These institutions should be firmer and coordinate closely to
act against developers who do not build the cheap houses,
Pangangian said

"Withdraw their licenses if necessary," he said.

Cheap homes usually cover 21 to 36 square meters.

According to a 1992 city rule, developers must allocate 20
percent of their land for cheap houses. A 1995 government rule
states developers must build six cheap homes to every three
middle-priced houses and one luxurious house.

The government has set the price of 21-square-meter homes at
Rp 4.9 million (US$2.1 million) and 36 square-meter homes at Rp
6.9 million.

In comparison a 36-square-meter house built by a private
developer in Bekasi, for instance, is Rp 45 million.

The government has ruled developers building cheap homes do
not need building permits. This is to cut costs. But this ruling
is yet to be effective. Weak enforcement was also caused by
several bureaucrats were also being developers, Panangian said.

At an earlier congress of the developers association city
branch, executives said several bureaucrats in various ministries
had set up foundations.

These foundations, set up for different purposes, sometimes
work with developers to build property as part of their fund
raising activities, executives said.

High cost

Developers have complained of the high costs involved in
building cheap homes.

Last week, developers association chairman Edwin Kawilarang
urged the government to cut taxes, fees and levies by 28 percent
to enable private developers to reduce the cost of cheap houses.

The 28 percent comprised of 10 percent taxes, 5 percent for
legal documents, three percent in fees and 10 percent for permits
and levies, Bisnis Indonesia reported yesterday.

The state public housing firm, Perumnas, has announced it will
build 10,000 low cost houses in greater Jakarta but this is not
nearly enough to meet demand.

A Perumnas executive said there were 23,000 people listed for
Perumnas homes in Parungpanjang, Bogor, while the firm only
planned to build 3,000 units there next year.

Perumnas is expected to fulfill the housing needs of low
income earners including low level civil servants. Civil servants
of level IIA who have worked for five years, for instance, earn
Rp 150,500 a month. There are 235,068 public employees of levels
I and II. (anr)