Increasing prices of land hamper housing development
Increasing prices of land hamper housing development
JAKARTA (JP): Problems related to land acquisition are
hampering the development of low cost housing for civil servants
under a compulsory savings scheme, Minister of Public Housing
Akbar Tanjung says.
In a hearing with Commission V of the House of Representatives
(DPR) here yesterday, the minister said that only Rp 4.3 billion
(US$1.98 million) out of Rp 352.81 billion in funds collected had
been used for home development, as of August.
The funds are now deposited at Bank Tabungan Negara (BTN), the
state-owned bank specializing in housing loans.
The minister admitted that the land price increase was a major
constraint to administering the funds, which are supposed to
finance the development of low-cost housing for civil servants.
He said he had appealed to local authorities throughout the
country to help provide plots of land at low prices for
developers of low-cost housing.
"Besides that, the bank will look into the possibility of
increasing the credit ceiling for land appropriation given to
developers, from 50 to 75 percent of the total land appropriation
costs," he said.
Widigdo Sukarman, the president of Bank Tabungan Negara, said
yesterday that his bank will lower each of the interest rates on
its low-cost housing loans by one percent, to a range of 15
percent and 16 percent per annum. The change will go into effect
next month.
Widigdo said that the planned reduction of the interest rates
is also aimed at encouraging developers to build low-cost
housing.
He acknowledged that developers generally faced difficulties
in providing low-cost housing due to high interest rates and the
increasing land values.
The government has cut civil servants' monthly salaries by
between Rp 3,000 and Rp 10,000 ($1.38 and $4.61) each to collect
funds for their housing facilities since early last year.
The government expects to collect Rp 457 billion by and until
the end of the second semester of this fiscal year, from around
four million civil servants across the country.
Some 60 percent of the collected funds will be provided for
housing facilities, while the rest will be deposited into finance
programs for the improvement of civil servants' future
welfare.(05)