Housing board to get tough with delinquent developers
JAKARTA (JP): The newly established National Housing Board announced that it plans to get tough with cunning developers.
The board has plenty of homework to do. Many developers have neglected the obligation of building low cost houses. House buyers have also complained about dishonest developers.
The housing board, a non-structural agency overseen by State Minister of Public Housing Akbar Tandjung, held its first meeting on Thursday. Its members include the ministers of public works, home affairs, social services and the state ministers of national development planning (chairman of the National Development Planning Board or Bappenas) and Agrarian Affairs (chairman of the National Land Agency).
Akbar told reporters after the meeting that the mechanism to supervise private, state-owned and cooperative developers would be established without interfering in the companies' activities.
"We have to make sure the companies don't do anything disadvantageous to their clients," he stressed.
The meeting studied the possibility of improving the implementation of the "balanced housing" concept and redefined the role and responsibility of the Board.
The "balanced housing" concept, which was signed in Nov. 1992 by the ministers of home affairs and public works and the state minister of public housing, stipulates that for every luxury house developers build they must also build six "very low-cost" houses and three "medium" houses.
The board is entrusted with finding and securing the plots needed to implement the program, called the 1:3:6 plan.
Akbar explained that the Board has stipulated the plots must be at least 200 hectares to enable the concept to be implemented.
Within this area, he said, the very low-cost, medium and luxury houses are grouped to enable their tenants "to establish a sense of social solidarity."
Regulations
Akbar admitted, however, regulations for the concept, which is expected to be carried out and monitored by the provincial and city governments, have yet to be formulated.
"In the future, the whole concept will be reflected in the city's site plan, in the requirements to obtain a building permit and in other rulings," he said.
Ever since the concept has been announced, however, developers appear reluctant to comply with it and many refuse to build the very low-cost houses, largely because of the low profit margin.
The government up to now has only gone as far as threatening to punish errant developers but has failed to state exactly what type of punishment would be imposed.
"We will figure that out later... punishments can range from warnings, fines to a cancellation of their business permits," he said, adding that he would personally handle recalcitrant developers and question their failure to fulfill their obligation.
Akbar explained that with less than 200 hectares of land, the 1:3:6 concept can still be implemented, with part of the houses -- mostly the very low-cost types -- built in another area.
"A 200-hectare plot can ensure that the government gets a low price for the land, which in turn will allow cross-subsidization of funds from the luxury houses to the very low-cost and medium units," he reasoned.
During the meeting, State Minister of National Development Planning Ginandjar Kartasasmita also explained the current situation of cement supplies.
Cement prices have now eased with the arrival of the first imports. The prices soared in September because of shortages, fanned further by stockpiling.
Many developers said they simply ceased construction of low cost houses because the higher cement prices slashed the small profit margin they were allowed by the government.
Prices have now dropped but are still higher than the "official reference price" and the housing construction business has not fully recovered.
"The government will allocate second-class, lower grade cement for the construction of very low-cost and medium houses... the good-quality, locally-produced cement will be exported," Akbar said, quoting Ginandjar.(pwn)