The government has announced that it will cut out unnecessary processes and reduce 70 percent of the costs involved in building low-cost housing as part of its 13th economic stimulus package, in the hope of increasing the availability of affordable housing.
“[Developers] currently require 33 permits to build affordable housing for low-income earners and we decided to reduce those to just 11,” Chief Economic Minister Darmin Nasution told reporters in the State Palace in Jakarta on Wednesday (24/08).
“The permit reduction will cut costs by 70 percent. We’ve calculated the costs with input from the Indonesian Real Estate Association [REI],” Darmin said. He noted that the multitude of permits usually require up to 981 days to process.
The minister estimates that it will now only take 44 working days to secure all the necessary permits.
According to the latest policy package, the government will no longer require unnecessary permits, such as location permits, elevation recommendations, site plan drawing confirmations, environmental impact assessments and traffic analyses.
The policy package will also see several permits being bundled into one, for example, the land certificate; proof of payment of land and building tax; and statement of non-dispute on the land will be combined into the developer’s proposal.
The government will release a regulation within the next 10 days that will form the legal basis of the new policy package, Darmin said.
The policy package is part of the President Joko “Jokowi” Widodo’s bureaucratic reforms aimed at improving the investment climate in the country and boost economic growth.