Low-cost houses built away from urban centers
Low-cost houses built away from urban centers
By Ridwan M. Sijabat
TANGERANG, West Java (JP): The national government said yesterday that the soaring prices of land and construction materials means that in the future low-cost houses can only be built in areas well outside urban centers.
"The high price of land and construction materials is making it impossible for the government to build cheap houses and apartments in big cities, such as Jakarta, Surabaya and Medan," said State Minister of People's Housing Akbar Tanjung, whose portfolio includes managing the government's low-cost housing program.
The low-cost housing program relies on the availability of cheap land, he said. "That's almost impossible in urban areas."
While construction of low cost houses is mainly carried out by private contractors, the government sets the prices, allowing the developers only a small profit margin.
"The non-availability of cheap land and the high price of construction materials makes housing developers reluctant to build simple housing and apartments in urban areas," the minister said.
Akbar was speaking after laying the first stone at a housing project for employees of the Ministry of Manpower in this city.
Like many government agencies, the Ministry of Manpower has been forced to look for sites for its employees' housing further away from its Jakarta office. Civil servants are among the lowest paid workers in Indonesia.
The government's housing program was dealt another blow this month when the government raised the reference prices of cement by an average of 40 percent to reflect market shortages. The government followed up the move by raising the prices of its "modest houses" by up to 14 percent.
Akbar said that, given the way prices were soaring, low cost houses were only feasible in areas located 50 to 60 kilometers outside urban centers. He said to make the houses affordable, the government could only pay Rp 5,000 per square meter for the land.
He suggested that residents of housing complexes form cooperatives to arrange transportation to and from work each day.
The minister stressed, however, that the government was committed to providing more houses for people with low incomes and would assist them on the financial side.
The advisory board for the housing of civil servants, chaired by President Soeharto, has decided to increase by around 100 percent the subsidy offered to lower level civil servants buying their own houses.
"For Grade 1 civil servants, the subsidy will be raised from Rp 600,000 to Rp 1.2 million and for Grade 2, it will be increased from Rp 750,000 to Rp 1.5 million," Akbar said.
The funds are made available as interest-free loans for the down payment in purchasing houses.
The program is financed through a compulsory savings scheme imposed on civil servants. Contributions range from Rp 3,000 to Rp 7,000, depending on grade, which is automatically taken out of workers' monthly salary.
Following the success of the home ownership scheme for civil servants, Akbar disclosed that the government was now considering one for workers in the private sector.
He suggested that private firms cooperate with housing developers and PT Astek, the state-owned workers insurance company, in organizing such a scheme.
He noted that some contractors had already built low cost houses for private sector workers close to industrial centers in Jakarta, Bogor, Tangerang and Bekasi.
Asked about low-cost apartments, Akbar said that at this stage they were not feasible because they costed more to build than houses. "Constructing 1,000 simple houses is more efficient than building 1,000 apartment units."