Govt prepares land ownership guideline rules

JAKARTA (JP): The government is working on guidelines to regulate land ownership and the location of housing complexes and industrial estates, a minister said here Tuesday.

State Minister of Housing and Settlement Theo L. Sambuaga said the guidelines would not only affect future housing projects but would also apply to existing projects which had been issued permits.

"Based on the principle of function, efficiency and fairness, the government is currently formulating guidelines to adjust the ownership of large plots and to control land ownership in the future," he said in a hearing with the House of Representatives.

The new guidelines will regulate land allocation and acquisition, and will limit land ownership, he told House Commission IV for public works, transportation, communications and public housing.

He said this would also enable the government to control the development of housing and industrial complexes according to city planning.

Theo said all commercial projects must comply with city planning and must provide social justice to surrounding communities.

Many housing developments in Jakarta are located close to poor neighborhoods and exclude themselves from the less prosperous communities surrounding them.

Most large properties in Greater Jakarta which are controlled by big private developers have triggered social problems in their communities, he said.

For example, they contribute little to the welfare of the people in their neighborhood and offer few job opportunities to local residents, he said.

Theo said the government might also review permits which had already been issued to see whether they comply with city planning, land allocation and other regulations and whether they generate social justice in their surroundings.

Theo said developers who had not developed their properties must abide by the government's recent regulation which requires owners of unused land to allow the unemployed to grow crops on their property.

Land which cannot be used to grow crops could be used as public sports areas according to the regulation, Theo said.

The property sector is one of the hardest hit sectors since the rupiah plunged by over 80 percent in value against the U.S. dollar this past year.

Along with declining purchasing power, property sales have plunged dramatically, while developers are mired deep in dollar- denominated debts.

Property consultant Panangian Simanungkalit estimates that outstanding loans issued to the country's property sector reach Rp 40 trillion (US$3.64 billion), 25 percent of the country's total outstanding bank loans of Rp 180 trillion.

Most of the loans were used by developers to aggressively develop commercial property projects and to finance land acquisitions.

Panangian said 87,000 hectares of land in Greater Jakarta currently lay idle.

Many companies are also no longer able to proceed with their initial development plans because prices of construction materials had soared dramatically. (das)