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)