Anissa S. Febrina, The Jakarta Post, Jakarta
Leave the provision of urban housing fully in the hands of the free market and this is what a city gets: increasing urban sprawl, workers bearing the burden of high transportation costs and empty downtown condominiums.
Decent housing is a basic human right, so it is ironic that Jakarta saw more new malls built in 2006 than affordable inner-city housing developments.
Those in the property market say they are still suffering the aftermath of the 1997 economic and monetary crisis, and that any government interference would only add to their debts.
But the crisis was almost a decade ago, and the property sector has gotten back to its feet and has started running again.
With a shrinking inner-city settlement area, urban planning expert Bianpoen referred to the city as one ""lacking in social justice as it continuously evicts the poor to make way for the rich elites"".
The lack of an effective housing blueprint has affected not only those who must live in slums and kampongs. The lack of affordable inner-city housing has forced workers to commute for hours to their offices, worsening traffic congestion and pollution, which lowers the livability of the city.
A recent study by Tarumanagara University's urban development program showed that 88.6 percent of surveyed Jakarta commuters wanted to move to the inner-city to avoid long commutes.
A small study conducted in 2004 by a group of architecture students for a collaborative project, Imagining Jakarta, revealed that 88.2 percent of the 165,000 workers in the primary commercial areas of Jl. Sudirman and Jl. Thamrin lived 41 kilometers away or more from their offices.
The study also found that based on a 2003 land mapping of the area, there were actually 100 hectares of vacant land available.
Leaving aside the issue of land ownership of the vacant areas, there is the potential to develop affordable apartments for some 40,000 white-collar workers there.
But the city administration has apparently failed to see this opportunity.
Deputy Governor Fauzi Bowo said late last month that currently only 1 percent of Jakarta's land was available for the development of inner-city housing.
The city need not take over completely the issue of urban housing, it just need to be more agile in looking for ways to make the pure business approach work for the public at large, instead of just for the developers and the wealthy.
According to the administration, building a single low-cost apartment requires an investment of Rp 74 million. Upgrading this to a middle-class apartment would take the cost up to a maximum of Rp 100 million.
Let's say that developers then sold the units for Rp 125 million. Using a 15-year housing loan with an annual interest of 17 percent, a person would be obliged to pay a monthly installment of just around Rp 1 million.
Currently, workers in the business district area spend between Rp 500,000 and Rp 2 million a month to rent rooms measuring less than eight square meters.
The choice is obvious.
The absence of affordable inner-city housing has created a market for rented rooms, which small land owners have been quick to respond to.
Housewife Halimah Rasyidi, who inherited a 200-square-meter lot in Pedurenan Mesjid, just behind the Sentra Mulia building, said her kontrakan (rented room) units were never empty.
""Even thoughnot much and not fancy, middle-class workers look for such places,"" she said.
In the last five years, monthly rent has gone up from Rp 250,000 to Rp 500,000 for the less than six-square-meter unfurnished rooms she offers.
And Halimah is not the only one benefiting from the city's lack of a proper housing plan.
Clusters of rental roomsand houses - can be found behind business strips and other downtown areas.
A group of urban planners from Tarumanagara University has mulled the idea of maximizing the potential of such informal housing by integrating it into the formal sector.
While landlords like Halimah might not be able to mobilize funds to develop their rental rooms vertically, the city administration could act as an intermediary guarantor to allow landlords access to larger capital from the banking sector.
With a consolidated investment, the informal housing sector could be scaled-up vertically, thus maximizing the already limited space while also providing a standardized quality of rental rooms for Jakarta workers.
The city actually saw the development of more inner-city apartments in 2006, but most remain out of reach for middle-class workers.
According to research by the Center for Indonesian Property Studies (CIPS), there will be 65,000 new apartments made available in Greater Jakarta by 2007.
As of this September, the total supply of strata-titled apartments stood at 41,028 units, while there were 10,940 leased apartments.
Meanwhile, the more-established developers should be reminded of their obligations.
According to a 1990 gubernatorial decree, developers of commercial projects of more than 5,000 square meters must allocate 20 percent of the value of their project for the development of low-cost housing.
A 2005 report from the city secretary office revealed that out of 163 developers who fell into this category, only 63 lived up to this requirement. In total, the others owed the administration Rp 893 billion in taxes that could have been used to build more than 10,000 units of low-cost apartments.
Some 40 developers under the Indonesian Real Estate Association (REI) appealed to the administration for a 50 percent tax discount, arguing that their tax rate should not be based on current land values.
Property analyst Panangian Simanungkalit warned that developers might ask for a tax moratorium, and urged the administration to set up an independent body to settle the cases.
""After the 1997 crisis, such a body was able to revive the property sector. Now a similar one can help the city formulate what to do with the problem,"" he said.
The city needs to put in place a better system to pool funds for the development of low-cost apartments, he said.
The problem has been identified and now it is time for the city administration to take appropriate action.
Vice President Jusuf Kalla earlier announced a tax incentive for low-cost housing developers. The Jakarta administration can move on from this point in developing its own housing scheme.
