Support sought for low-cost housing

Evi Mariani, The Jakarta Post, Jakarta

The city administration's genuine support is needed in order to meet the demand for low-cost apartments in the capital each year, said a property analyst on Monday.

"The 63,744-hectare metropolis, which houses at least 10 million people, does not provide enough space for people living in the low- to middle-income brackets.

"To provide housing for these residents, the city administration's political will to give incentives to developers, such as loans and cheap land, is needed," Adhitya Wisesa, head of Research and Consultancy at Colliers International, a property services provider, told The Jakarta Post.

He said the administration should take responsibility for meeting the demands for apartments for the low- to middle-income residents.

"We cannot expect developers to build them, because they are not profitable. In other countries, such as Singapore, the government took the initiative to build mid-range and low-cost apartments," he said.

The City Housing Agency recently revealed that the administration had managed to build 17,559 low-cost apartment units since the initiation of the program in 1984. The figure is much lower than the projected demand of 70,000 rooms per year.

Similarly, Panangian Simanungkalit, a property analyst who works for the Indonesian Bank Restructuring Agency (IBRA), said it would be impossible to expect the developers to immediately meet the demand without the administration's help.

"Of course, developers are always profit-oriented. They see that people in the upper-class bracket are the most profitable target market.

"Despite the fact that 40 percent of the 27,000 upper-class apartment units in Jakarta are still unoccupied, developers will continue to build upper-class apartments for the next 10 years until the market is saturated. Then they may think of building low-cost ones," he said. It has been common knowledge among the public that many rich people buy apartments, not because they need places to live, but merely for investment purposes.

In response to the demand, head of City Housing Agency Jaender Sagala said the agency was indeed concentrating on building low- cost apartments.

"We are targeting to build 1,000 low-cost apartment units this year," he said on Monday.

However, poor management has led to the misuse of these low- cost apartments, the ownership of which are often taken over by people of the middle class who badly need houses or flats in the city.