The Jakarta Post
Jakartans have begun to line up to join the administration’s latest housing finance scheme, widely dubbed the zero down payment scheme, to buy their first home.
They arrived at the city’s housing agency on Thursday to apply to buy apartments in Klapa Village in Pondok Kelapa, East Jakarta. A two-bedroom apartment is priced between Rp 180 million (US$12,070) and Rp 310 million, with installment plans of 10, 15 and 20 years.
While the financial scheme can work and help many people, Jakartans need a holistic housing policy to have their rights fulfilled.
Introduced by Jakarta Governor Anies Baswedan during the gubernatorial campaign in 2016, the scheme, officially called Samawa, has raised doubt among many people. But Anies confidently says this scheme will help half of Jakarta’s population who do not yet own their own home. Many residents welcomed the financial scheme because they find it difficult to save enough money for a required down payment, which is usually at least 30 percent of a property’s price.
Nationwide, this problem was addressed by Bank Indonesia through its relaxation of the loan to value (LTV) rules for housing loans in June this year. The central bank now allows each bank to determine its own LTV, meaning any bank can provide loans of up to 100 percent of the price of a property if they think the risk is manageable.
Earlier this year, the Public Works and Housing Ministry also launched a financial scheme allowing home buyers to pay a down payment of only 1 percent of the property’s price.
In an exclusive interview with The Jakarta Post last month, Anies claimed “many companies, state-owned and private”, have approached him and offered to join the program. He said the financial scheme would provide housing developers the buyers, allowing the developer to cut marketing costs and sell the properties at a lower price. The city administration will not provide the land or build the housing: that is the developers’ responsibility.
However, what is not yet clear is the extent of the responsibility of the Jakarta administration, or the Public Works and Housing Ministry, on fulfilling the residents’ housing rights.
After providing the developers with the buyers, will the city administration monitor the quality of the buildings? Will they help the buyers if the developers do not build the housing as promised?
Jakarta’s apartment owners often get into disputes, sometimes bitter and violent, with developers. Some vocal tenants have ended up in jail or have had to pay a large fine in a civil lawsuit. An iconic example is Khoe Seng Seng, a buyer of a shophouse in ITC Mangga Dua in North Jakarta.
Will the city administration help if the Samawa tenants clash with developers?
Housing has been a problem for millions of Jakartans. Financial problems are only one issue. Consumer protection is another and human rights protection is a bigger one, with forced evictions still happening under Anies’ administration.
Let Samawa be the first step toward better fulfillment of housing rights in Jakarta.