City threatens to force builders into obligation

JAKARTA (JP): The city administration will continue pressuring the private developers reluctant to build low-cost apartments in return for the issuance of land appropriation permits, Governor Surjadi Soedirdja said.

The governor emphasized that the city administration will not hesitate to take stern measures against any developers who are not willing to abide by the existing regulations.

Under Gubernatorial Decree No.540/1990, all developers of high-value buildings are obliged to build low-cost apartments on 20 percent of the area of their project sites.

Only four of the 66 developers building large-scale business buildings in the city have met their obligation to build low-cost housing.

The governor said on Thursday that officials have registered the names of the disobedient developers. "I always warn my subordinates to be careful in issuing permits and to reject any proposal from uncooperative developers," he said.

The governor said the problem is exacerbated by the fact that most of the developers signed agreements for the construction of the cheap apartments long before he took office. "Many of them are no longer in operation," Surjadi told reporters at City Hall.

He said that the city administration has asked the Jakarta branch of the Indonesian Real Estate Association (REI) for help in this matter.

Private sector developers have been asked to construct low- cost apartments because the city administration can build only 3,150 units per year, or 30 percent of the total demand of about 10,500 units per annum.

Meanwhile, assistant to the city secretary Prawoto Danoemihardjo said that the city administration is still reviewing a proposal from REI that a lump sum be paid in lieu of the construction of apartments.

"We are still reviewing whether or not the proposal will benefit the city administration and solve the housing problem," Prawoto told reporters yesterday.

He explained that the city administration fears that the funds collected from developers might not be enough to build low-cost apartments because of the escalating prices of building materials.

Prawoto also said developers receiving land appropriation permits for their projects are now required to sign agreements with the city administration stipulating the scheduling for the construction of apartments.

"The schedule includes when and where the developers will build the facilities," he said. (yns)