Cheap house prices to law: Perumnas

JAKARTA (JP): State-owned housing company Perumnas appealed to the government yesterday to raise the price of cheap houses.

Perumnas chairman Srijono said the prices of cheap houses were being outstripped by rising production costs.

He told a hearing of House Commission V for transportation, telecommunications and housing that profit margins were being squeezed by rising land prices.

A 21-square-meter house on a 60-square-meter plot costs Rp 4.9 million (US$2,075) and a 36-square-meter house on a 100-square- meter plot costs Rp 6.9 million.

The government provides subsidies to developers building houses of these sizes.

He said that, despite the subsidy, the prices were too high for poor people and too low for developers.

"Most people still cannot afford the houses, and their purchasing power is not increasing," he said.

The minister of public housing said earlier that prices should be reviewed because of developers' rising costs.

Developers of cheap houses say that rising land prices are pushing up costs, and that cheap housing should be built on land worth Rp 5,000 a square meter, which is unobtainable in Greater Jakarta.

Srijono said provincial governments must provide land so that more cheap houses could be built according to the state's target.

"Right now, we receive very little support from provincial administrations," he said.

Perumnas built 139,604 houses and apartments between 1994 and the end of last year, below the 250,000 target set by the office of minister of public housing.

The company planned to build 68,438 houses this year, and 21,388 more in the first quarter of next year, he said. (02)