City called on to issue ruling on cheap apartments

JAKARTA (JP): City councilors urged the administration yesterday to issue a regulation on low-cost apartments in an effort to protect the city's investment as well as apartment owners.

Bandjar Marpaung, chairman of the council's Commission D for development affairs, deemed it necessary for the administration to issue a ruling which stipulates the mechanism to sell the apartments.

"Up to now, a regulation has not been issued regarding the sale of apartments. This will put the administration at a disadvantage, because not only is its chief objective in building low-cost apartments doomed to failure, but it is also losing its investment," Bandjar said.

He said the low-cost apartment program was launched by the city administration to eliminate slum areas in the city by relocating the residents to better housing complexes.

The city administration helps residents of slum areas to acquire the apartments by selling them cheaper than the costs of their construction, he said.

"The administration covers half of the construction costs. But this is of no use if the residents sell their apartments to people who intend to make money from the property," Bandjar said.

Lukman F. Mokoginta, chairman of the Indonesian Democratic Party faction, said the city administration should do something about this.

"If such a practice continues unabated, it only means that all the efforts of the administration in constructing low-cost apartments -- to provide decent housing for the poor -- did not serve their purpose. Instead, it is the rich who take advantage of the apartments at the expense of the needy," Lukman said.

He said a decree is important to regulate the sale of the apartments because it is impossible to prohibit the owners from selling their property.

Lukman said the regulation would help protect the original owners of the apartments.

"The administration should protect them, because it is possible that the buyers are taking advantage of the owners' financial problems. In the end, the owners will not make any profits," he said.

Lukman said this might force the owners back to slum areas because they cannot afford to buy land to build decent houses.

He also urged the city administration to tighten control of its officials, especially those who work at the city housing agency. "We have to be aware of any collusion committed by city officials," he said.

The councilors raised the issue following media reports that most of the low-cost apartments in Bendungan Hilir, Central Jakarta that were inaugurated last May were sold to other parties who rented them out.

Each 21-square-meter apartment was sold at a price set between Rp 20 million (US$8,695) and Rp 40 million. The buyers were to pay for their apartments in monthly installments to the bank.

The new owners have been renovating the apartments and leasing them for Rp 4.8 million per year, or Rp 450,000 per month.

Since the inauguration of the apartments in May, Governor Surjadi Soedirdja has been urging their owners not to sell them to other people. (yns)