Developers shun low-cost apartments: REI<\/p>\n
JAKARTA (JP): Developers are not interested in investing in
\nlow-cost apartments as it is considered a money losing business,
\nan executive of the Indonesian Real Estate Association (REI)
\nsays.<\/p>\n
Enggartiasto Lukito, chairman of REI, told reporters over the
\nweekend that it is next to impossible to build low-cost
\napartments because the construction costs for low-cost apartments
\nis the same as that of luxurious apartments.<\/p>\n
"The construction cost for an apartment cannot be less than Rp
\n800,000 per square-meter," Enggartiasto told reporters at a
\nmeeting between members of the Jakarta branch of REI and
\napartment developers.<\/p>\n
Enggartiasto said the only way to provide low-cost vertical
\nhousing, which is being aggressively promoted by the city
\nadministration as part of its drive to improve the welfare of
\nslum dwellers, is through a cross-subsidy system, which is
\nstipulated in a gubernatorial decree.<\/p>\n
The decree, which stipulates that developers of luxurious
\napartments are required to build low-cost apartment buildings in
\nthe city as well, was issued to solve the problem on the scarcity
\nof funds.<\/p>\n
Previous head of the City Housing Office, Ongky Sukasah, said
\nthe city's promotion of low cost apartments is hindered by a
\nfinancial problem.<\/p>\n
Under the cross-subsidy system, part of profits registered
\nfrom the sales of their luxurious apartments should be set aside
\nfor financing the construction of low-cost ones, he said.<\/p>\n
He added that the decree is the best way to support the
\nimplementation of the vertical housing program.<\/p>\n
Low-cost apartments built under such a cross-subsidy system
\ninclude those built in Bidaracina, East Jakarta, on Jl.
\nPenjernihan, Central Jakarta and in the Tebet area, South
\nJakarta.<\/p>\n
In a related development, Thamrin Djamain, president of the
\ncity owned housing developer PD Sarana Jaya, said that his
\ncompany is currently managing 2,996 leased apartments in the
\ncity's five mayoralties.<\/p>\n
Of the 2,996 units, 1,382 are located in Penjaringan, 490 in
\nTambora, 124 in Cengkareng, 360 in Karang Anyar, 152 in Jati
\nRawasari, 152 in Cipinang, 125 in Pondok Bambu and another 150 in
\nPondok Kelapa, he said.<\/p>\n
In the period between 1990 and 1995, PD Sarana Jaya has
\nfurnished over Rp 2.3 billion (US$1.04 million) for the
\nmanagement of the facilities.<\/p>\n
He explained that the rental system is considered to be the
\nmost applicable to help solve the problems of housing for people
\nwith incomes of between Rp 150,000 and Rp 250,000 per month.
\n(yns)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/developers-shun-low-cost-apartments-rei-1447893297",
"image": ""
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"sponsor_url": "https:\/\/okusiassociates.com"
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