Developers urged to build apartments for middle class

Developers urged to build apartments for middle class

JAKARTA (JP): Private developers are being urged to build
apartments for the middle class, because the city is still
concentrating on building low-cost apartments for slum area
residents.

Assistant for the City Secretary Prawoto Danoemihardjo denied
yesterday reports that the city will build middle-class
apartments.

He said it was impossible for the city to subsidize the
development of apartments for the middle class because it was
already difficult to subsidize low-cost apartments, with a
minimum price of Rp 26 million per unit.

The city subsidizes 50 percent of the price of each unit
prioritized for slum residents.

The public still needs middle-class apartments with a minimum
price of Rp 30 million per unit for 30 square meters, he said.

Relatively cheap apartments, apart from the low-cost units
built by the city, are located in Kemayoran and start at Rp 26
million for a studio unit of 21 square meters.

This, Prawoto said, is too small for a family, which needs an
apartment with separate rooms.

Meanwhile, other apartments labeled as designated for the
"middle class" are around Rp 70 million per unit.

Prawoto stressed the city is still focusing on eliminating
slum areas and helping to provide adequate housing for the poor.

Due to financial problems, the administration has only managed
to build 3,150 low-cost units per year, while the annual demand
is around 10,500 units.

In an effort to fulfill the demand, the administration issued
gubernatorial decree No. 540/1990, which requires developers to
provide 20 percent of their commercial sites for low-cost
apartments.

"It's still not enough," Prawoto said.

Data from the housing agency shows that each year, housing
demand in Jakarta is 70,000 homes per year.

Due to land shortage, housing officials say 30 percent -- or
about 23,000 homes -- should be vertical housing.

Fifty percent of the vertical housing demand is fulfilled by
private developers. This consists of apartments for middle and
upper-class groups.

However, most private developers are still interested in
luxury apartments, which has caused a gap in middle-class
apartment demand.

"Private developers should start building apartments for the
middle class, because the demand is high. We have decided to give
facilities to encourage them," Prawoto said.

Among the incentives are Governor Surjadi Soedirdja's recent
order to simplify the process to acquire permits, such as
building or land use permits.

Prawoto said the development of apartments for the middle
class would benefit the administration such as by reducing
traffic flow.

"Workers earning Rp 1 million (US$434.78) per month can live
near their workplaces. Vertical housing is also in line with the
administration's plan to increase the green areas in the city,"
he said.

So far, the city has built 12,356 low-cost units for slum area
residents. (yns)