Subsidy proposed to lower land prices

Subsidy proposed to lower land prices

DILI, East Timor: State Minister of Public Housing Akbar
Tandjung said the government intends to give housing development
in the youngest province higher priority.

After meeting with 13 regents and one East Timorese mayor on
Thursday, Akbar called on the provincial administration to back
the government up with flexible housing regulations.

"The local administration should encourage the private sector
to develop houses in the province," he said.

He also called on the government and housing developers to
assist government employees and low-income people in the purchase
of low-cost houses.

"The local administration can help by reducing the interest
rate for low-cost houses as well as by simplifying the procedures
for housing loan applications," he said.

He also suggested that the local administration nullify the
loan agreement clauses which stipulate that applicants should
have served in government for a certain period of time.

State-owned housing development company Perum Perumnas and
local private housing developers have noted an increasing demand
for low-cost houses in the province.

Sondang P. Gultom, the East Timor head of Perumnas'
construction division, said that Perumnas is currently working to
complete the construction of 991 low-cost houses in the province.

"Even now the rising demand is more than we can meet," she
said.

People in the market for houses are both local and migrants
from other provinces, which, according to Sondang, indicates a
similar level of welfare between the two groups.

Antonio da Silva, chairman of the East Timor office of the
Indonesian Real Estate Association (REI), said that private
developers can build only 500 houses in every regency, while
demand exceeds 700 houses annually.

Akbar also visited a housing development project in Liquisa
regency. He was accompanied by REI's executive chairman
Enggartiasto Lukita, Perumnas chairman Srijono, and deputy
chairman of state-owned Bank Tabungan Negara Pandamsih.

One of the ways to control the ever rising housing prices in
big cities, Akbar said, is for the government to subsidize land
acquisitions for housing projects.

He said "political will" on the part of the government was the
only way to deal with the high price of houses, as construction
and cement costs are nearly impossible to push down.

"Housing construction costs in Java are very difficult to
control," he said. "And it's very difficult for the government to
control cement prices because they depend on market supply."
(imn)