Apartment proposed for city slum areas

JAKARTA (JP): About 2,700 hectares of the city's slum areas should be turned into cheap apartments, a real estate expert said Friday evening.

Speaking after the opening of a housing exhibition at the Jakarta Convention Center on Friday night, the chairman of the Indonesian Real Estate Association's (REI) city branch, Yan Mogi, said the slum areas that could be improved were in Pademangan, Tambora and Tamansari.

Governor Surjadi Soedirdja and REI's secretary-general, Agusman Effendi, attended the seminar.

"REI hopes for the city's cooperation in improving the city's slum areas to help make the city's program to build cheap apartments a success," Mogi was quoted by Antara as saying.

Under such a cooperation more cheap apartments could be built, he said.

He said private developers were reluctant to build cheap apartments because of high land prices and development costs.

"If developers force themselves to build low-cost apartments, the prices won't be affordable to low-income people," Mogi said.

Built without any cooperation with the municipality, the retail price of a 21-square-meter apartment can reach Rp 30 million (US$12,244), he said.

Construction costs alone are between Rp 450,000 and Rp 550,000 a square meter.

He said he was optimistic more developers would soon want to build cheap apartments using better technology.

"And the improvement of economic welfare will enable more people to buy low-cost apartments," Yogi said.

In his speech Governor Surjadi said the building of cheap apartments showed the municipality's determination to help solve Jakarta's housing problems.

He said the city aimed to build 280,000 cheap apartments by 2000.

The municipality has built only 3,150 cheap apartments a year because of a lack of money. This is well below demand for cheap apartments which is about 10,500 a year.

The city has so far built 12,356 cheap apartments for slum residents.

In an effort to meet demand, the governor issued decree No. 540/1990 requiring developers to set aside 20 percent of commercial sites for cheap apartments.

The City Housing Agency's data shows that each year, there is demand for 70,000 new homes.

But because there is not enough land, housing officials say 30 percent -- or about 23,000 homes -- should be highrises.

So far, 50 percent of highrise apartments have been built by private developers but most of these are expensive apartments. (ste)