Request to build fewer cheap houses refused
JAKARTA (JP): Deputy Governor of Economic and Development Affairs Tb. M. Rais strongly rejected yesterday a demand from developers for a reduction from 20 percent to 5 percent in their obligation to build cheap apartments of land appropriated.
"It is difficult for the administration to approve the developers' request," Rais told reporters yesterday after attending a meeting at City Hall.
In a meeting with City Council members on Thursday, the developers urged the municipality to allow them to build less low-cost apartments or pay cash instead of building the apartments.
Rais said, however, that the developers' participation in the low-cost apartment development was badly needed to help provide decent housing for poor people living in slum areas. The construction of more low-cost apartments also constituted the main alternative to solve the city's increasingly complicated housing problem, he said.
He said that offering cash directly to the administration in exchange for the developers' obligation to build low-cost apartments was not acceptable either.
"What the administration wants is more low-cost apartment buildings, not cash," he said.
Despite his rejection, Rais still wanted to use the developers' request as input to the municipality. "We'll analyze it further," Rais said.
Rais emphasized the governor's statement that Jakartans, whether they like it or not, should live in apartments in the future due to land shortage.
"We hope developers support our policy by providing more low- cost apartments," Rais said.
According to Gubernatorial Decree No. 540/1990, developers who gain permits to appropriate at least 5,000 square meters of land, or more, are obliged to set aside 20 percent of their projects for the construction of low-cost apartments.
The decree was issued to provide adequate housing for the poor and to help eliminate slum areas.
Chairman of the council's Commission D for development affairs, Ali Wongso H. Sinaga, said yesterday that the commission could not accept the developers' proposal either.
"If the municipality approves the proposal, the city cannot reach the target of building around 300,000 apartments in the next five to 10 years," Ali said.
He said that under the decree, the developers building the cheap apartments could own the facilities.
"But when they want to lease or sell them, their prices will be set by the administration," Ali said.
Previously, all low-cost apartments built by private developers had to be handed over to the municipality.
Ali also supported Rais' decision to reject the developers' request to pay cash instead of constructing the apartments.
"The cash offer will not solve the housing problem because there's no guarantee that the money is enough to construct low- cost apartments. Besides, the municipality will also face problems in finding the land," Ali said.
He urged the municipality to force all developers to comply with their existing obligation.
"If necessary, the city can publicly name developers who fail to comply with the regulation," Ali said.
Yan Mogi, chairman of the city branch of the Indonesian Real Estate Association (REI), said Thursday that out of 50 REI members developing apartment projects in the city, only 10 had met the requirement set by the administration.
He said that principally, developers were willing to support the program to provide more low-cost apartments. However, many developers could not afford the construction due to high land prices and development costs, he added.
"If developers force themselves to build low-cost apartments, the prices won't be affordable to low-income people," Mogi said. (ste)