Build quality low-cost houses, President says

Build quality low-cost houses, President says

JAKARTA (JP): President Soeharto yesterday warned real estate
developers not to cut corners in building low-cost housing,
stressing that the quality of the houses is as important as the
number being built.

The chairman of the Indonesian Real Estate association (REI),
Edwin Kawilarang, told journalists after meeting Soeharto here
yesterday that the President had stressed the importance of
providing not only cheap housing but also housing that is
hygienic and suitable to live in.

"Bapak President said that people should be able to live in
better housing than in the past," Edwin said.

The government has entrusted REI with the construction of 40
percent of the 600,000 low cost houses due to be built in the
sixth Five-year Development Plan period in 1994-1999.

According to Edwin, so far REI has built over 166,000 units.
He expressed confidence that the target of 240,000 can be reached
by the deadline.

In an attempt to provide affordable housing for a majority of
Indonesians, the government requires real estate developers to
erect six low-cost houses and three medium-cost houses for every
luxury house they build.

While acknowledging the importance of providing inexpensive
housing, Edwin pointed out that the problem often lies in the
"mass-production" of these low-cost houses.

"The core of the problem is that low-cost houses are mass
produced. As with anything that is mass produced, there are bound
to be defects," he said.

Edwin explained that solutions depended on how far developers
were willing to correct defects after the houses have been
constructed.

He again quoted the President as calling on the developers to
use as many domestic services and materials as possible, and
reduce dependence on foreign consultants, contractors or
materials.

When asked about deceptive advertising used by a number of
developers, Edwin said that in many cases the advertisers were
exploiting the tricks of the marketing trade to lure potential
buyers.

There are housing advertisements which tend to be misleading,
he conceded. "However, these are marketing tricks," he said.

Unfortunately, there are as yet no laws to regulate such acts,
he pointed out.

In response to questions about the existence of "fictitious
developers" who scheme to make money under the guise of providing
housing for the consumer, Edwin maintained that on many occasions
it was just a matter of mismanagement .

He said there were developers who were really trying to steal
money from consumers, but that there were others who had pure
intentions but ran into financial problems half-way through.

Of the 10 biggest cases of such fraud in the past year, eight
involved REI members.

Edwin stressed that many of the developers failed to fulfill
their obligations because of problems with capital and land
appropriation. (mds)