Developers will be required to speed up house construction

JAKARTA (JP): The government will require real estate developers to accelerate the construction of houses to meet increasing demand, State Minister of Public Housing Akbar Tandjung said here yesterday.

"Developers, under a new ruling currently being prepared by the government, will be required to finish the construction of houses within five years of receiving building licenses," he told Commission V of the House of Representatives (DPR) in a hearing.

Akbar said the lack of regulations requiring developers to accelerate the construction of houses has given them leeway to delay their projects.

During the recently completed Fifth Five-Year Development Plan (Repelita V) period, the government originally set a target of 450,000 new houses to be constructed by developers. However, even though the target was reduced to 350,000 houses, only 321,770 units were constructed between April 1989 and March 1994.

Of the new houses, 86,104 units were constructed by the state- owned Perum Perumnas, and the rest by private developers.

Akbar blamed high interest rates for the delays in housing construction during the last five years, besides the lack of regulations on the acceleration of housing construction.

The minister said construction acceleration is necessary because developers are expected to construct no less than 500,000 houses during the current Repelita VI period.

Procedures

Akbar said that to support the acceleration of housing construction, the government will simplify procedures for the issuance of licenses needed for housing projects.

Members of the commission, which deals with transportation, public works, tourism, post, telecommunications and public housing, want the government to set a deadline of five years for developers to complete the construction of houses after they receive building permits.

"I suggest that developers complete housing projects within five years once building permits are obtained." Marsinggih Marnadi, a legislator from the Indonesian Democratic party (PDI) said.

Marsinggih said a long delay in the construction of housing complexes will encourage developers to begin speculating on the land, which would result in an increase in land prices.

Akbar, when asked, declined to say whether the new regulation will impose sanctions on developers failing to meet the housing construction deadlines.

Marsinggih said the government should revoke the licenses of developers failing to meet the deadlines.(02)