'Lifting land-use ban may cause speculation'

JAKARTA (JP): Land speculation and black market trading of land-use permits will become rampant following the withdrawal of the National Land Agency's ban on issuing land permits in Bogor, Tangerang and Bekasi, an observer said.

Panangian Simanungkalit was responding to a circular issued by the agency, headed by State Minister of Agrarian Affairs Soni Harsono, canceling the policy introduced last year.

The agency announced in October that local authorities could not issue land permits until permits issued to develop 92,298 hectares had been evaluated. Only 13,276 hectares out of the 92,298 had been developed.

"The announcement of the policy discouraged speculators," Panangian said yesterday.

The halt on permits, Panangian said, "was a strategic start to control land prices, although it was somewhat late".

The agency withdraw the policy on Feb. 18 after an evaluation on land-use permits.

"The withdrawal reflects inconsistency in public policy, and developers with small capital will have more difficulty in access to land," Panangian said

This was because land prices would soar again, and so would the illegal, but common, trading of land-use permits, the head of the Indonesian Study Center on Property said.

"The black market of land-use permits is no secret, and they are expensive because of the various levies attached to them," Panangian said.

Land for low-cost housing will become even more scarce, he said, while there would be even more idle land.

"There is no way small developers can buy enough land for low- cost housing needs up to 33 years," he said.

The inconsistency further shows a lack of integrated urban policy by housing, land and banking authorities.

"It still shows sectoral egoism," he remarked.

A source at the agency confirmed yesterday that land use permits could be reissued to developers on several conditions. These include permits for those appropriating land of not more than 200 hectares and those who agree to develop plots within 10 years.

Former chairman of the Indonesian Developers Association Mohamad S. Hidayat said the agency should halt permits for town- scale development to enable control of land-use permits.

But Panangian said what was more important was law enforcement on developers to prevent more instances of idle land.

"The government should immediately allocate idle land to new developers," Panangian said.

He added there should be strict enforcement of the regulation for developers to build six cheap homes to every three middle- scale homes and one luxury home.

Land for housing is considered enough until 2018.

Shortly after the instruction to stop land permits was announced, Soni agreed to the Indonesian Developers Association's request that developers building cheap housing would still be issued permits. (anr)