Low-cost apartment developers seek incentives
Low-cost apartment developers seek incentives
JAKARTA (JP): Private developers urged the municipality
yesterday to provide more incentives in developing low-cost
apartments.
One of the developers, Soekardjo Hardjosoewirjo, said that
incentives were badly needed to help speed up low-cost apartment
development.
Soekardjo, who is also chairman of the Indonesian Chamber of
Commerce and Industry (Kadin) city-chapter, said incentives
developers wanted included a reduction of fees for processing
necessary permits for buildings and land use, and for water and
electricity facilities.
"We hope there will be fixed fees set for private developers
interested in developing low-cost apartments," Soekardjo told
reporters after a meeting with Governor Surjadi Soedirdja.
Soekardjo met the governor to report on a plan by Kadin's
Jakarta office, the Indonesian Real Estate Association city-
branch and the municipality to hold a seminar on the
opportunities and challenges in developing low-cost apartments on
July 23.
Soekardjo said the seminar would present problems encountered
by developers in developing low-cost apartments and to help find
solutions.
Surjadi ordered officials last year to simplify permit
processing procedures, but the order did not cover specific fees
for low-cost apartment development.
Soekardjo said many developers were actually interested in
building low-cost apartments.
"But more incentives are still needed because developing low-
cost apartments is different from constructing middle-class
apartments, which have more promising market potential,"
Soekardjo said.
"The governor himself said that all Jakartans, whether they
like it or not, should live in apartments due to a land
shortage," Soekardjo said.
He also said developers urged the government to reduce loan
interest rates of between 20 percent and 22 percent.
"Interest rates are too high. Ideally, interest rates for low-
cost apartment developers should be set between 14 percent and 16
percent," Soekardjo said.
The city's assistant secretary on economic and development
affairs, Prawoto S. Danoemihardjo, said recently that the city
was boosting the development of low-cost apartments to help
eliminate slum areas and provide adequate housing for the poor.
Due to financial problems, however, the administration has
only managed to build 3,150 low-cost apartments per year, far
lower than the annual demand of around 10,500 apartments.
In an effort to meet demand, the administration issued
gubernatorial decree No. 540/1990, which requires developers to
set aside 20 percent of commercial sites for low-cost apartments.
Fadjraa Oemar, president of apartment-building company Permata
Kebayoran, said that the city should standardize prices of low-
cost apartments.
"Existing standards are not clear," he said.
Oemar said there should be a price range for low-cost
apartments, just like government-set prices for low-cost houses.
The price for a 21-square-meter house, for example, is set by
the government at Rp 4.9 million (US$2,008) and Rp 6.9 million
for a 36-square-meter house.
Data from the city housing agency shows that each year, demand
for housing in Jakarta reaches 70,000 homes.
Due to a land shortage, housing officials say 30 percent -- or
about 23,000 homes -- should be in the form of vertical housing.
So far 50 percent of vertical housing is provided by private
developers, but those built by developers are mostly made up of
apartments for middle and upper-income groups.
The city has so far built 12,356 low-cost apartments for slum
area residents. (ste)