Govt to Set Up Holding Company for Housing

The government is preparing to establish a state-owned enterprise (SOE) that will serve as a holding company in the housing sector to provide decent homes for low-income people.

The state-owned holding company would serve as a parent company, draft plans and develop houses.

“The revitalization of state-owned companies in the housing sector, including setting up a holding company in the sector, has been stipulated in the national development plan 2015-2019,” Nugroho Tri Utomo, the National Development Planning Board’s (Bappenas) housing and settlements director, said on Thursday.

Aside from developing new houses for low-income people, the holding company could also provide suitable homes by buying houses from SOEs or private developers and then selling them to people through a subsidy scheme, Nugroho said as quoted by Antara news agency.

He said the plan was not yet final, but he hoped it could be finalized soon so that low-income people’s need for appropriate housing could be promptly met. In addition, the holding company would be allowed to carry out land banking, especially for community housing. 

Nugroho said the move was stipulated in a 2011 government regulation on providing people with the housing loan liquidity facility (FLPP), interest margin subsidy and advanced subsidy.

However, the facility can only be utilized by workers in the formal sector. For those in the non-formal sector, a housing subsidy finance program is being prepared and is targeted to be implemented in 2017. 

The procurement of homes for low-income communities is stipulated in a 2015 government regulation on state-owned housing developer Perum Perumnas.

Meanwhile, Institute for Development of Economics and Finance (Indef) economist Enny Sri Hartati said the government needed to strengthen institutions in the housing sector if it wanted to realize its one-million houses program.

To realize the program, there should be ease of access for potential buyers such as taxation relief, Enny said, adding that about 600,000 low-income people did not have adequate houses because of poor purchasing power. Data from the Central Statistics Agency’s national social economy survey (Susenas BPS) shows that only 15 percent of Indonesians can pay monthly installment of Rp 500,000 or less for a house.

She added that it was currently harder for low-income people to find affordable housing as almost 60 percent of people bought houses not to occupy them, but to resell them at a higher price, making house prices rise rapidly.

“For example, many houses are sold at Rp 1 million per square meter when they are launched, but after just a week, the price can rise to Rp 5 million per square meter,” Enny said.

Thus, it was necessary for the government to establish a policy on people buying houses to live in, not to resell at higher prices, she added.

Source:, 15/04/2016

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