Government Rolls Out Red Carpet for Property Developers With Simpler Licensing
Jakarta. Property developers cheered the government's latest economic policy package for allowing them to supply more houses to consumers at a faster pace, and at the same time to spend less on development.
"Complicated licensing is one of the problems that needed solving in the public housing sector," Theresia Rustandi, Indonesian Developers' Association (REI) deputy chairman for communication, told the Jakarta Globe on Friday (26/08).
She said the new policy package — the current government's thirteenth — will also allow low-income earners to also own houses.
As previously reported, the government on Wednesday scrapped several licensing requirements to build much-needed low-cost housing and bundled them into simple permit packages.
"This policy will be very helpful if effectively applied, especially in villages," she said.
According to Theresia, the government had worked together with the association in preparing this latest policy package.
Chief Economic Minister Darmin Nasution said the government will release a government regulation for the policy package no later than 10 days since the announcement on Wednesday.
Previously, a developer has to apply for at least 33 permits before they could start developing a property, a process that could take more than three years (981 working days).
The policy package will cut the requirement into just 11 permits in 44 working days.
The change will also cut 70 percent of the current permit-related costs for each development, Darmin said.
The permits that the government had deemed unnecessary and decided to scrap include permits for location, land elevation recommendation, site plan drawing confirmation, environmental impact and traffic analysis.
The government also simplified the required proposal from developers, still requiring them to produce certificates of title, proof of payment of the latest land and buildings tax (PBB) and confirmation that the land they are building on is not in dispute, but bundling it into one application instead of having to submit it in separate ones.
President Joko "Jokowi" Widodo set an ambitious target of developing one million houses for low-income residents last year.
Indonesia still has a long housing backlog, mostly because supply of houses in the country simply cannot meet demand amid growing population, higher urbanization and improving economy.
Data from the Central Statistics Agency (BPS) showed that housing backlog in Indonesia reached 11.4 million units in 2015, already falling from 13.5 million units in 2010, but still considerably high compared to its Asean neighbors.
The government wants the housing backlog to fall to 6.8 million units by 2019.
The data also show the current homeownership rate — the ratio of owner-occupied property to total available property — had reached 78.7 percent, meaning more than 20 percent of households are living in a rented house.
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