Support sought for low-cost housing

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.