Corry Elyda, Jakarta – As Jakarta's shortfall of affordable housing deepens, many developers are failing to meet their obligation to build low-cost apartments, a stipulation of permits to construct commercial buildings in the capital.
The Jakarta Spatial Planning and Environmental Bureau revealed that the city administration had issued 729 land-use permits (SIPPT) for residential development from 1991 to 2014 for the same number of holders. Of that number, only 55 holders have met their obligation to build low-cost apartments.
Abusudja Samsuri, head of the bureau's public and social facility department, said recently that some of the companies still under obligation to the city administration had gone bankrupt or ceased to exist.
"Weak sanctions and law enforcement are the main reasons behind the delays," said Abusudja, whose team is tasked with encouraging developers to meet their obligations.
According to Gubernatorial Decree No. 540/1990, a developer planning to build housing complexes or apartments of 5,000 square meters or more is obliged to fund and build low-cost apartments and public facilities at least 20 percent as large as the commercial buildings.
"Those who have not fulfilled their obligations cannot secure building-worthiness certificates [SLF]," he said.
The absence of the certificate, however, seemed to matter little to developers, he went on. "Without the certificate, they are technically not allowed to use the building. However, many commercial buildings operate without one," he said.
Without an SLF, he added, developers were unable to obtain land certificates for the owners of apartment units from the National Land Agency (BPN).
The rate at which the department could push developers to do their duty was very slow, Abusudja said, compared with the pace of today's property development.
He added that developers often struggled to find affordable plots of land for the construction of the required low-cost apartments, forcing the administration to provide land in some cases.
"They can build the apartments on our land," he said, giving as examples Daan Mogot apartments in West Jakarta and Muara Baru apartments in North Jakarta.
The Jakarta Housing and Building Administration Agency revealed in November last year that Jakarta was suffering from a housing backlog of up to 529,000 units.
Agency head Ika Lestari Adji said her office aimed to build 5,000 units of new apartments by the end of 2017 for residents evicted from riverbanks and reservoirs.
"We have met 25 percent of the demand while the city and the central government will fulfill another 30 percent in the next project," she said, adding that she hoped city-owned and private developers would help fulfill the remaining demand.
Real Estate Indonesia (REI) Jakarta chapter chairman Amran Nukman said the number of units developers' obligations entailed was often unclear. "The problem lies in the calculation of converting the size [of the commercial building] into apartment units or blocks," he said.
Developers, he added, were not looking to shirk their responsibilities, but called for a clear regulation from the city. "We are communicating intensively with the city administration regarding the calculation," he said, adding that a resolution was expected in the near future.