Land acquisition problems are threatening the government's ambitious five-year project to secure 1.3 million subsidized housing units through the construction of apartments and houses in cities.
Expensive land prices provoked by legal battles over land acquisitions have impeded the construction of the projects, State Minister of Public Housing Yusuf Asy'ari said Monday.
"It will be difficult to realize the planned target because of the expensive lands needed to be cleared by the government," said Yusuf during a meeting with the House of Representatives' Commission V overseeing housing, public works and transportation.
He said the Ministry of Finance and the Ministry of Public Works should revise several regulations related to the taxable value of property (NJOP), which is used as a benchmark to determine land value.
"We have to come up with a decision immediately, otherwise the projects could be delayed," he said.
Numerous infrastructure and public housing projects in Indonesia have run aground due to land acquisition problems, while government efforts to resolve the problems have come up short.
According to the Ministry of Finance, the government is currently financing the construction of 75 towers consisting of 45,000 units in Greater Jakarta, as well as 44 units of houses to be rented in densely-populated regions.
The government targets 1,000 towers to be built by 2011.
"We have provided Rp 468.3 billion (US$50.3 million) to construct the towers and rented houses in the first half of this year," Yusuf said, adding that his office had allocated Rp 760 billion for the second half of the year.
The country's major property developers have recently voiced their reluctance to participate in the projects unless the government resolves land acquisition problems and provides tax incentives as promised earlier by the Finance Ministry.
The public apartments and housing projects were launched in 2006 as part of a project initiated by the Susilo Bambang Yudhoyono administration to help resolve housing problems in cities.
During the hearing, Yusuf spoke of difficulties in securing electricity and water supply for new apartments and houses due to complicated bureaucracy within related ministries.
Yusuf said many people from outside Java were reluctant to buy subsidized apartments or houses because they often faced blackouts and water shortages.
"However, we will keep on building new towers and houses because by the time they are completed, the (electricity and water) supply problems will have been solved, and people will be able to move in," he said.
Low-income people are also facing difficulties in trying to buy the apartments as they can not afford down payments required by banks to secure mortgages.
"Amid a period of declining public purchasing power, there should be certain regulations passed by the related agencies to help low-income people easily get mortgages," said Yusuf, who is also a senior member of the Justice and Prosperous Party (PKS). (ewd)
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