Pandaya, Jakarta – When you are on your way from Soekarno-Hatta International Airport to downtown Jakarta, look down as your taxi climbs the first flyover. The ugly side of Jakarta's face stares back at you. Shanties line the streets next to a badly polluted river.
Ladies and Gentlemen, we are now passing over Pluit, the section of Jakarta closest to its international gateway, where the city of 10 million people's socioeconomic disparity is clear to see.
Below the toll road that swoops above are traffic filled streets lined with the cardboard houses of hundreds of families, and thousands of people with nothing to call home.
Cruise a little further to the north, however, and you'll see a totally different reality. Welcome to Pantai Indah Kapuk, the posh beach housing complex of some of the city's wealthiest residents, where every accessory to modern life is available.
The appalling sight of Pluit's slums and those in other parts of Jakarta and throughout Indonesia is the manifestation of the unfulfilled promises of many presidents and governors, who pledged to improve the well-being of the masses in their election campaigns.
Efforts to build low-cost flats to replace city slums have failed because the deeply debt-ridden government rarely has the money needed and the targeted low-income people are just too poor to buy even the cheapest of apartments. The economic crisis in 1997 crushed hopes further.
Land shortages, land prices, expensive building materials, hard-to-access bank credit and a complicated and corrupt bureaucracy have all been blamed for Indonesia's inability to provide decent housing for a large chunk of its 230 million people.
Indonesia needs to build 800,000 new homes every year. According to Habitat for Humanity Indonesia, which is involved in the building of houses in disaster-struck Nanggroe Aceh Darussalam, Central Java and Yogyakarta, up to 80 percent of the country's new homes have to be built by the residents and the remaining 20 percent by the government, NGOs and the private sector.
In Jakarta, the property business has started to boom again almost 10 years after the crippling economic crisis began, but apartments are only being built for the rich. Property developers are not interested in building low-cost flats because it is not economically viable – they would be too expensive for most people.
Fuad Zakaria, chairman of the Indonesian Association of Low-Cost Housing Builders (Apersi) reckons that each square meter of cheap flat would cost between Rp 3 million and Rp 4 million to build. Even if the flat was to be offered at Rp 5 million per square meter, nobody from the middle and lower income brackets would be able to afford to buy it. "Besides, developers deem the Rp 5 million price tag not profitable. Who is going to buy it?" he told Tempo.
Property developers have also complained about red tape in license procurement procedures. In Bogor, for example, Apersi reported that illegal levies account for 20 percent of the legal fees they have to pay.
Soeharto's New Order regime tried to solve the housing problem by building modest houses ranging from 21 square meters to 36 square meters in Bekasi, Depok and Tangerang – all just outside Jakarta.
But years later, the projects have turned out to be creating new problems. They consumed substantial land and quickened environmental degradation such as the loss of water catchments and pollution. And everyday millions of people living in these areas commute into Jakarta, requiring the development of new infrastructure, increasing the traffic in the capital and worsening the city's pollution. Handoko Ngadiman, chairman of Habitat for Humanity Indonesia sees a good political will in the Yudhoyono administration to build houses for the poor.
"The government is mulling a subsidy scheme to help the poor build houses," he told The Jakarta Post, adding that details of the plan are yet to be finalized.
Low-cost apartments undoubtedly would be the most efficient solution but Jakartans cannot wait until the government has the money to build affordable ones, such as those in Kebon Kacang, Central Jakarta, built by state-owned housing company Perumnas back in the 1970s.
Imagine if the apartments were to be built within a city where the necessary infrastructure is already in place and the occupants do not have to travel miles to get to their work. The government needs to expand the city's infrastructure and facilities.
The most serious problem is probably land acquisition because the price increases every year. The city administration recently promised to help private developers wanting to build low-cost apartments in Jakarta but the bylaw is failing because there are so many commercial interests fighting for land on prime sites.
"It is impossible to build cheap apartments with the government setting the prices if we have to compete in the free market to obtain the land," Kompas quoted a Perumnas official as saying.
But in fact the official's premise is questionable. What about the state property scattered throughout the city, not to mention the land seized from debtors by the now defunct Indonesian Bank Restructuring Agency? Perhaps there is something to be done, after all.