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