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Housing woes leave poor with few options

Source
Jakarta Post - October 19, 2010

Jakarta – The nation's cities are experiencing a housing crisis fueled by overpopulation, a lack of new homes, and poor access to lending, all of which have the greatest impact on the low-income bracket, experts say.

Government data from the National Middle Term Development Plan 2010-2014 forecast that the percentage of Indonesia's total population living in cities would reach 67.5 percent in 2025.

Residential estate data from Cushman and Wakefield Indonesia showed that home prices in Greater Jakarta started at Rp 250 million (US$28,000) in satellite cities such as Bogor and were Rp 1 billion and higher in several upper-class neighborhoods in Jakarta.

According to Ivan Hadar, a city planner and co-editor of the Journal of Social Democracy in Asia, Jakarta is facing a housing crisis. The evidence for this is the multitude of shanty towns located on floodplains, river banks and under bridges, overcrowding of available housing and the big distance between homes and workplaces.

"The housing crisis is directly related to the high price of land caused by unproductive ownership, land and building speculation, and the control of land and housing by a few," he said.

"The funding required for adequate housing is beyond the financial capacity of those who need it," he said. "Thus, a kind of selection process eventually occurs in which those who are weak become the victims."

Dwi Novita Yeni, a research and analyst manager at Coldwell Banker Indonesia, told The Jakarta Post that the main cause of the housing crisis was that home financing options such as mortgages were not easily available to the low-income bracket.

Some 70 percent of people who can afford to buy a house use bank loans, 15 percent use a cash system and 15 percent pay in cash, she added.

Home building has not kept up with population expansion in Indonesia's cities, causing house prices to climb and the spread of densely populated illegal housing areas.

The availability of schools, housing and public facilities has also pushed up housing prices, according to Arief Rahardjo, the associate director of research and advisory at Cushman and Wakefield Indonesia.

"The government actually has a policy on home ownership involving subsidies for landed and apartment home ownership for those who can't afford it," he said.

"The weakness is in the policy's inconsistent implementation which has created an unsure business environment for developers of low-cost houses and apartments," he added.

Gunawan Tanuwidjaja, a city planning expert from Petra Christian University in Surabaya, said the current condition of urban housing was having a negative impact on quality of life.

"Low-income earners are the most affected by this condition," he said, adding that the unsustainable housing conditions had triggered an onslaught of problems including large gaps in living standards.

"And because of these [problems], urban residents cannot enjoy healthy and meaningful lives anymore," he said, adding that housing development came at the cost of the environment, citing mangrove deforestation as an example. Mangrove forests help prevent tidal flooding and shield against tidal waves.

"The unsustainable conditions have worsened the urban areas, forcing those with higher incomes to move to new suburban developments," he said. (gzl)

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