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Permit incentive will have insignificant effect on property costs: Indef
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Institute for Development of Economics and Finance (Indef) executive director Enny Sri Hartati (finansial.bisnis.com/via tribunnews.com)
T
he latest economic policy package, aimed at simplifying the permit process for the construction of affordable housing (MBR) for low-income people, will not significantly lower the cost of property development, according to the Institute for Development of Economics and Finance (Indef).
Undermining the government’s optimism that the 13th package will lead to a 70 percent cut in licensing costs, Indef executive director Enny Sri Hartati said permit costs contributed only 10 percent to the total cost of property development.
"More important [factors] in property pricing are land availability and infrastructure facilities. The land must not be too far from people’s workplaces, and mass transportation facilities such as trains must be available," she told The Jakarta Post on Friday in Jakarta.
If the location of low-cost housing is remote with a lack of public transportation, then lower prices will not be enough to attract people, Enny said. Therefore, she recommended the government strengthen coordination to ensure the low-cost housing program worked with a real affordable price.
"The Public Works and Public Housing Ministry acts as the regulator, state-owned Perumnas builds the houses, state-owned construction companies build the facilities and regional governments work on the administration," she said.
Local administrations must prevent people from buying two or more low-cost houses by creating a local database of buyers in the program, Enny added. (ags)
