'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)