Neglected land to be used for simple housing: Soni

JAKARTA (JP): The government will hand over "neglected" land in Botabek, which includes Bogor, Tangerang and Bekasi, to developers who want to build simple houses and houses for expatriates, State Minister of Agrarian Affairs/Chairman of the National Land Agency Soni Harsono said early this week.

The minister said his office was making an inventory of neglected land and would ask the developers with location permits for the land if they would build simple houses or houses for expatriates there.

"If they are unwilling, their location permits would be handed over to developers who are willing to build simple houses and houses for expatriates," he was quoted by Antara as saying.

The minister said that neglected land meant land which had not been appropriated by developers although the government had given the developers permits to do so long ago. The permit is called a location permit

Since October, the ministry has not and will not issue any new permits for housing projects in Botabek.

Soni said the policy was taken because enough housing-project permits had been issued to meet demand for houses in Jakarta and Botabek until the end of the Twenty-five-Year Long Term Development Plan in 2018.

Many developers with location permits had not started their projects. They might have financial problems or they applied for the location permits for speculation, hoping to make money by selling the permits, he said.

Soni said the ministry had issued 1,592 location permits for housing projects Jakarta and Botabek, covering 121,629 hectares in total: 16,609 hectares had been developed, 41,759 hectares had been appropriated, 46,639 hectares were being appropriated and the remainder had been neglected by the developers.

He said the ministry would only reissue location permits for simple houses on up to 50 hectares of neglected land.

Developers who wanted to build simple houses on more than 50 hectares would be denied location permits, he said.

Priority

The ministry would give priority to developers wanting to build houses for government officials and military staff, he said.

The 50-hectare housing development limitation was introduced to encourage developers to build on the land sooner.

The chairman of the Indonesian Developers Association, Edwin Kawilarang, welcomed Soni's policy to limit housing development in Jakarta and Botabek to simple housing projects of up to 50 hectares.

That would give small developers a chance to progress, he said.

But he criticized the levies and bribes which developers had to pay to government officials when building simple houses.

The levies and bribes, which represented 28 percent of total development costs, included various taxes (10 percent), fees for various licenses (10 percent), costs to process housing credit (5 percent) and official and unofficial donations, including those for schools and cemeteries, (3 percent), he said.

The government had also planned to add a 5 percent ownership- transfer tax soon, he said.

A bill on ownership-transfer taxes is being discussed at the House of Representatives.

"This would discourage developers from building simple houses," he said.

He said developers would compensate by raising the price of simple houses.

Simple houses now cost between Rp 4.9 million (US$2,076) and Rp 15 million. (jsk)