REI to build low-cost apartments

Bambang Nurbianto, The Jakarta Post/Jakarta

The Jakarta chapter of the Indonesian Real Estate Association (REI) has expressed its wish to construct low-cost apartments in the city to help the administration relocate tens of thousands of squatters.

REI Jakarta chairman Alwi Bagir Mulachela said on Thursday there were many REI members who were interested in constructing low-cost apartments on plots of land owned by the administration.

"The city administration can rent out the apartments to poor families and can obtain ownership after paying in installments to REI members within three years," Alwi said at a hearing with the City Council's Commission D overseeing development affairs.

Data from the City Housing Agency shows that there are some 80,400 low-income families, including riverbank squatters, who should be relocated into low-cost apartments.

The city, however, can only construct some 3,000 apartments each year due to budget constraints.

This year the city has allocated Rp 424.59 billion (US$44.96 million) to develop some 3,300 apartments.

Currently, there are around 21,000 apartments in the city, constructed by state housing company PT Perumnas, the City Housing Agency, philanthropist foundations, and private companies.

Governor Sutiyoso has said that low-cost apartments are the answer for a chaotic city with high land prices.

The city budget subsidizes around 40 percent of the cost of construction for low-cost apartments, but most are not occupied by the targeted poor families.

Alwi said that participation of REI members to develop low- cost apartments would help speed up the relocation of squatters living in slum areas.

He said the basic price of low-cost apartments ranged from Rp 2 million to Rp 2.5 million per square meter.

According to Alwi, most of REI's 340 members developed houses in suburban Jakarta, so their products are affordable to residents whose monthly incomes are less than Rp 3 million.

"We are ready to cooperate with the administration to construct low-cost apartments in the city," he added.

Commission D chairman Sayogo Hendrosubroto welcomed the offers, saying that the relocation of squatters into low-cost apartments was a big job for the city administration because as it required large amounts of money.

"While there are many squatters who should be relocated into low-cost apartments, the city can only construct 2,000 to 3,000 units per year," he said. He said his commission would convey REI's proposal to the housing agency.