Developers offer cash in place of apartments
Developers offer cash in place of apartments
JAKARTA (JP): The city administration is still studying a
proposal from real estate developers that would allow them to
give cash directly to the administration for each exclusive
housing complex built in lieu of their obligation to build low-
cost apartments.
Governor Surjadi Soedirdja said yesterday that his office is
still studying the proposal and has not made a decision.
"Discussion of the subject is not finished," Surjadi told
reporters at City Hall.
However, the governor stressed that the city administration
would continue to see to it that real estate housing developers
comply with their obligation to build low-cost apartments.
The city administration reported that since the decree was
introduced in 1990, 70 developers in the city have been required
to build low-cost apartments.
About nine of these developers have been pushing to change the
1990 decree.
Based on Gubernatorial Decree No. 540/1990, real estate
developers must allocate 20 percent of their total budgets to
projects for low-income people.
The decree is part of the city's efforts to provide decent
alternatives for those living in slum areas.
According to Prawoto Danoemihardjo, the city secretary's
assistant for development administration affairs, there are
several options available.
Developers, he said, can build low-cost apartments within
their real estate project but, in return, must give the city
administration the authority to manage and sell the apartments.
The developers can also build the apartments within their real
estate projects and manage and sell it themselves. The city
administration provides the land while the developers build the
apartment.
"But the city administration has the authority to set the
price of the apartment units," Prawoto said.
Several low-cost apartments have already been built in Tebet,
South Jakarta, Bendungan Hilir in Central Jakarta and Penjaringan
in West Jakarta.
Helmy A. R. Syihab, chairman of the City Council's Commission
C in charge of economic affairs, urged the city administration to
reject the proposal, saying that there is no guarantee the cash
will be used properly.
"The cash will go to the administration's coffers and nobody
will know for sure if the money is being used to construct low-
cost apartments. There is also the possibility that the money
allocated for construction will be lower than the cash actually
given by the developers," Helmy said.
Thus, he added, low-cost apartment building targets would not
be achieved.
Helmy said the cash given by the developers might not be
enough to build the apartments because prices of building
materials have increased.
"Therefore, it would be better if the developers built
apartments rather than give cash to the city administration,"
Helmy said. (yns)