Property sector reflects problems in Surabaya

Property sector reflects problems in Surabaya

SURABAYA: While developed countries are moving forward,
Indonesia is stepping backward, due to too much arguing over
insignificant things, said an expert on city planning.

Johan Silas, an architecture lecturer at the Surabaya
Technological Institute, said many problems of the past were
related to conspiracies between government officials and
irresponsible businesspeople.

"The property business reflects the whole problem that we are
facing. It might not be the only one, or the worst one, but it
certainly is one of the most crucial," he said, adding that if
construction in Surabaya stopped for 10 years, it would not
matter.

The nonstop building and development happening now does not
have a sound base, he said.

When he and his team researched settlement patterns in 1990,
they found that one house was inhabited/occupied by 0.98 (less
than one) person. Now, the population of Surabaya is less than
that what was predicted in 1980. "We predicted 3.2 million, and
now the number is less than three million," he said.

Johan said there was an oversupply of houses offered by real
estate developers and property owners/investors. "The market is
engineered, it is a fake market," he insisted, contrary to Real
Estate Indonesia (REI) statements that there is always a demand
for more houses and buildings.

REI East Java branch vice chairman FX. Andoyo, said, "We were
forced to buckle down in 1997-1998 because of the monetary
crisis, but now we are up again. The market has been on the up
again since mid-1999. Perhaps not so much for the lower classes,
who still need housing-credit support, But for the higher
classes, there has never been a problem. They even pay cash," he
said. However, as he and other REI members reluctantly admitted,
the quantity of buyers in the latter class is actually small.

Revised Master Plan

The Surabaya Master Plan (SMP) 2000, which Johan helped draft
in 1976 and established in 1980, was revised twice; first in
1985, and then in 1990. Ironically, what is happening now is more
in line with the predictions of the original SMP. So, why was it
revised in the fist place?

"Not for improvement, but rather to legitimatize wrongdoings
and tolerate mistakes," said Johan.

The revisions were oriented to economic growth, which the
original SMP did not touch. At that time -- in the New Order era
-- everything was oriented to growth, neglecting or even
sacrificing other aspects of development.

"I see that the so-called economic growth was actually false,"
said Silas. He was happy that the original Indamardi (Industry,
Business/Trade, Maritime, Education) predictions turned out to be
true.

Surabaya -- in 2000 -- has become a reputable industry and
trade center. Even the maritime aspect is now taken seriously by
the new government.

Housing for laborers

Silas said he did not believe there was a growing market for
housing. "It was a faked/engineered market."

There is no real need for houses, he explained. He said the
current plan for building houses for industrial laborers was
flawed.

The program, dreamed up by developers, is called Tabungan
Pembangunan Perumahan Buruh (Savings for Laborers' Housing).

It might be a creative way of inventing a market, but as Johan
said, they have no grounds for that. "Laborers do not need
permanent houses. They want to keep their money and take it home
to buy land or rice fields in their villages. What they need in
the city, in the industrial area, is just a place to sleep at
night. A place they can abandon anytime they want," said Johan.

Industrial workers are mobile people. They will not stay
permanently in industrial areas, he said.

According to research he conducted, about 90 percent of
workers have their own houses. "So, when developers took the idea
to build houses for them to the government or banks, were they
being creative or speculative?"

To cultivate a healthy and fair business climate, Silas has
some suggestions for developers and property investors.

"They have to start to face the real world. Don't stay too
long in your imagery world. We cannot afford to fall again," he
said. He hoped businesspeople would be more professional, would
make up for their past sins, and change the world of make-believe
into reality. (Sirikit Syah)