INDONESIA TO LAUNCH ONE-MILLION HOUSE DEVELOPMENT PROGRAM

By Andi Abdussalam

Jakarta, April 13 (Antara) -- The government must prioritize low-income people in its one million housing development program, which will be launched at the end of the month.          The Public Works and Public Housing Ministry and state-owned housing developer PT Perumnas will team up to carry out the government program of building one million units of houses over the next five years.          Public Works and Public Housing Minister Basuki Hadimuljono said that his ministry will start work this year to reduce the big backlog in the implementation of the housing program.      According to Hadimuljono, the government already set aside Rp13 trillion from the state budget and Rp500 million from the Social Security Management Agency (BPJS) for the program to build one million units of houses.          It has also allocated Rp220 billion in the revised State Budget 2015 for assistance in the down payment for housing credits. Those entitled to the financial assistance are buyers of modest houses who earn a maximum salary of Rp4 million per month and buyers of modest apartments who earn a salary of Rp7 million per month.          So far, low-income people have been forgotten in the development of public housing. Therefore, the Indonesian Property Watch has urged the government to give priority to this group of people.            "The Indonesian Property Watch has urged the government to continue the implementation of the one million housing program, taking the supply factor, in particular, into consideration," Executive Director of Indonesia Property Watch Ali Tranghanda stated.          To aim the development of the one million houses program at people in the lower-income bracket, housing expert Enggartiasto Lukito suggested that the government design a house zoning development system.          He pointed out that the government, through the Public Works and Public Housing Ministry, needed to apply a zoning system to ensure the success of its one million houses development program, which will commence at the end of the month.          "The government should apply a zoning system if it wants to expedite the realization of the housing program," Lukito remarked here on Monday, April 13.          He added that the zoning system was needed to allow the program to favor low-income people, wherein the government should decide on a zone for the construction of low-cost houses.          Lukito, who is also a politician of the National Democratic Party (NasDem), believes that to overcome funding problems, the government could consider the housing credit scheme of state-owned bank BTN, which focuses on the housing sector.          "If the government is serious about developing low-cost houses for people, funds that are already available with a number of institutions could be saved in BTN. This is because so far, only BTN has been serious about developing public housing," he explained.          Until now, people of the lower income bracket have faced issues related to housing facilities. They are often considered as not bankable, as a result of which they faced difficulties in obtaining funding from banks.          Based on data available at the National Development Planning Board (Bappenas), about 70 percent of Indonesian families developed or obtained their own homes with their own money; 12 percent obtained them with banks' housing ownership credit scheme (KPR); and 18 percent gained their homes with financing installment facilities other than the KPR scheme.          It is believed that large number of people developing their own houses without financial assistance, as is indicated in the 70 percent figure, has the potential to lead to the emergence of slum settlements. This is because the houses they build do not involve much planning and have lesser funds available.          Therefore, the government needs to aim its one million housing development scheme at low-income groups. Even though this program can be hard to implement, it can be carried out if serious efforts are made.          Furthermore, Vice President Jusuf Kalla earlier said that the program to develop one million houses for the people is, indeed, an important one to realize, but with good cooperation from different parties, it can be implemented.          "The one million housing development program is, admittedly, a heavy thing to carry out, but it must be realized," the vice president noted at a press conference at the office of the Ministry of Public Works and Public Housing on Tuesday last week.          He added that it was important to realize the housing development program to reduce slum settlements in the country.          Therefore, the government, through cooperation with various parties, is optimistic that the program, which will be launched by President Joko Widodo on April 30, will be successful.          "I am optimistic because the program is supported by the House of Representatives (DPR). All funding problems can be settled if we maintain good coordination and understanding with Commission V, which oversees public housing affairs, of the DPR. Apart from that, we also have coordination and synergy with housing institutions," Maurin Sitorus, the acting director general of Financial Affairs of Public Housing of the Ministry of Public Works and Public Housing, affirmed.          Besides, the government and Real Estate Indonesia are also expected to develop a synergy to realize the project.         "The one million housing development program designed by the government cannot be realized if there is no synergy and unity for its realization," Public Works and Public Housing Minister Basuki Hadimuljono pointed out.          In addition, the government is expected to provide subsidies for interest on credits obtained to buy houses. The interest rate is also expected to be reduced from 7.25 percent to 5 percent annually for a period of 20 years.     ***3*** (T.A014/INE/B003) EDITED BY INE (T.A014/A/BESSR/Bustanuddin) 13-04-2015 19:44: