Jakarta. Indonesia will soon release a presidential regulation as a legal basis to set up a land bank entity next year as part of the government's efforts to address a land deficit for housing, a minister said on Tuesday (14/11).
The forthcoming land bank, which will repossess any piece of land left unused by their owners after a certain period, is designed to prevent land prices from skyrocketing due to speculation.
"Hopefully by the end of 2017 or early next year we will have the land bank," Agrarian Affairs and Spatial Planning Minister Sofyan Djalil said.
According to Sofyan, the regulation on land bank is now awaiting a signature from President Joko "Jokowi" Widodo.
The government is still preparing more details on the land bank entity's organization and its budget, Himawan Arief Sugoto, the head of land bank formation team at the ministry, said.
According to Himawan, the Indonesian land bank will serve as a state-owned entity to acquire vacant properties such as abandoned houses, forgotten buildings and empty lots so that they can be repurposed.
He estimates there are 78,000-hectares of abandoned land, 23,000-hectares of which has been acquired by the government to be used by the National Police, the Indonesian Armed Forces and civilians for social purposes.
"The land can also be used for industrial area or [building] new cities," he said.
"The [abandoned] land should be handed over to the land bank and then we plan, design so there won't be any chance for land speculators to spur the land price."
The Ministry of Public Works and Housing said Indonesia's housing backlog — or the difference between housing needs and its availability on the market — reached 13.5 million units this year. Each year, Indonesians need about 800,000 unit of housing but developers can only provide as much as 500,000 units a year.