City running out of funds to construct cheap apartments

JAKARTA (JP): The city administration will be able to build only 3,150 low cost apartments per year, 30 percent of the annual demand, an official said yesterday.

"The administration does not have the funds to meet the demand, which is estimated to be 10,500 units annually," said Nusmardi, head of the apartment control department of the city housing office.

Nusmardi explained that every year the city needs 70,000 housing facilities, 30 percent being apartments, from low cost to luxury condominiums.

The establishment of apartments is being boosted by the city administration to help eradicate slum areas and at the same time solve land shortage problems in the city.

"About fifty percent of the demand for units is fulfilled by private developers who build luxurious apartments for the middle and upper classes, while the rest are built by the city administration," he said.

He added that due to the limited availability of funds the city administration plans to build only 3,150 units a year over the next five years starting in the 1995/96 fiscal year.

Nusmardi said that the city administration will ask the public to participate in building low cost apartments through self- participation programs, developer's obligation or cross-subsidy programs and also from contributions from the central government.

"For example, the development of low cost apartments in Bidara Cina, East Jakarta, was financed by businessmen who provided Rp 8.5 billion (US$3.89 million) to build apartments there," Nusmardi said.

He said that low cost apartments, built under the cross- subsidy program, are those in Pejompongan, Central Jakarta and Tebet Barat, South Jakarta, while the building in Bulak Wadon, North Jakarta, was financed by the central government.

A total of 7,163 low cost apartments have been built in the city since 1985, with sizes varying from 18 square-meters to 54 square-meters. The city administration is developing another 1,200 units which are expected to be completed next year.

Step by step

Nusmardi also said that the city administration plans to adopt a step-by-step plan with future low cost apartment projects.

"Under the new strategy the city administration will appropriate land one year and start construction the following year," he said.

"We could move residents whose land is to be appropriated to vacant apartments so that there will be no need for them to rent housing pending the completion of the construction," he added.

Nusmardi said that this step is expected to run smoothly because presently there are sufficient apartments to accommodate people whose land is appropriated.

He explained that this is to avoid any instances, such as that in Bendungan Hilir where residents strongly opposed the building of apartments and clashed with security officers.

Nusmardi also said that the city housing office has prepared a low cost apartment map in the city based on the slum area directory but it still has to be reviewed again by each mayoralty.

"The detailed plan we have needs confirmation from each mayoralty because the areas may have changed," he added. (yns)