City developers fail to fulfill commitments

The Jakarta Post, Jakarta

Most real estate developers in the capital have ignored their obligation to construct low-cost apartments for disadvantaged families in Jakarta.

According to data provided by the Jakarta Housing Agency, 301 out of 367 developers that received permits to construct luxury residential facilities from 1999 to 2005 failed to fulfill their obligation to build low-cost apartments.

From 1999 to 2005, developers should have build low-cost apartments on around 380,521 square meters of land as a requirement for building luxury apartments, but so far they have not fulfilled their obligation.

"As the first step to force developers to fulfill their obligation, the governor will summon them next week. We will take firmer actions if they still ignore their obligation," city secretary Ritola Tasmaya said on Friday.

Gubernatorial Decree No. 540/1990 requires all developers constructing residences on 5,000 square meters of land or a larger area in the city to construct low-cost apartments on at least 20 percent of that land.

The developers, however, may construct the low-cost apartments at other locations or pay a certain fee to the city administration.

Ritola said the city administration would punish developers, who still ignored their obligation after being warned. The punishment could be the suspension of their permits or stopping on-going projects, according to Ritola.

The housing agency has estimated that there are some 40,000 poor families in the city, which should be relocated from city slums or riverbanks.

The city has long planned to build some 3,000 units of low- cost apartments, but it faces difficulty in acquiring land for such projects. According to the draft of the city's budget for 2006, the city has allocated some Rp 360 billion for low-cost apartments.

The Jakarta Housing Agency is tasked to acquire 20,000 square meters of land this year in the city, but up until August 2005, the agency had not acquired any land in the capital, according to a progress report.

Data from the agency also shows that there are some 20,000 low-cost apartments in the city built by a number of agencies, including state housing company PT Perumnas, the Jakarta Housing Agency and city developer Prasarana Jaya.

Many of those low-cost apartments are, however, not occupied by low-income families as they are rented out to middle-class employees by their owners.

Governor Sutiyoso has repeatedly said that his administration would concentrate on the construction of low-cost apartments here in order to eliminate slums in the city.

He stressed the need for stronger supervision of low-cost apartments to make sure that they are not occupied by middle- class people.