Administration to review decree on developers
Administration to review decree on developers
JAKARTA (JP): The city administration is reviewing a loop-hole
riddled gubernatorial decree stipulating that developers must
build low cost apartments.
The Assistant City Secretary for Administrative and
Development Affairs, Prawoto Danoemihardjo, said yesterday that
Decree No. 540/1990 does to have the legal clout necessary to
force developers of luxury apartments to set aside 20 percent of
the commercial site for low-cost apartments.
Prawoto said that the decree does not clearly define what a
commercial site is. The decree only stipulates that housing
developers should provide 20 percent of their commercial sites
for low-cost apartments.
Prawoto said the use of the word "commercial" has weakened the
decree. Usually shops and other business sites are defined as
commercial sites. But now, many people consider houses as
commercial sites because they can be sold.
"So now the city administration is trying to formulate a
decree that contains a clearer definition of commercial sites,"
he said.
The review is being carried out by the office of the deputy
governor for economic and development affairs.
Prawoto did not mention when the process will be completed.
He said the administration has tried to be flexible by
allowing developers to build the low-cost apartments on locations
outside of the luxury apartment complexes they build.
However, many developers continue to be reluctant to build
low-cost apartment houses. They see the decree as a burden and
source of financial losses.
The administration has ruled that low-cost apartments be sold
at 50 percent less than the construction costs in an effort to
help the needy obtain housing.
There are 70 developers who have been operating in Jakarta in
since 1991, but only four have abided by the decree. They have
constructed a total of 988 apartments for low-income people.
The four developers are PT Danayasa Arthatama with 240 units
in Tambora, West Jakarta; PT Catur Swasakti Utama with 160 units
in Penjaringan, West Jakarta, and PT Kuningan Persada with 292
units in Tanah Tinggi and another 296 units in Bendungan Hilir,
Central Jakarta.
PT Mandara Permai is currently building 3,000 low-cost
apartments in Pantai Indah Kapuk, West Jakarta. The project is
scheduled for completion by the end of 1997.
The private developers' contribution of providing low-income
people with apartments is vital because the administration can
build only 3,150 units per year, or 30 percent of the total
demand. The total demand is projected at 10,500 units per annum.
A total of 7,163 low-cost apartments have been built in the
capital since 1985. Their sizes vary, ranging from 18 square
meters to 54 square meters. (yns)