Dream Homes Only on Brochures
During a morning assembly at the East Pisangan subdistrict office in Pulo Gadung, East Jakarta, on Monday (29/7/2019), 28-year-old Rendi Hadi Saputra found a spark of hope. The assembly speaker, one of his superiors at the subdistrict office, distributed brochures of houses in Cibarusah, Bekasi regency, West Java, to the subdistrict’s Public Facility Maintenance Agency (PPSU) workers, including Rendi.
They were encouraged to take the opportunity of purchasing a home before prices went up.
According to the brochures, the homes are 21 square meters in size, on 60 sqm of land. They have a spacious yard.
“The yard is perfect for children and for relaxing in the afternoon,” Rendi said in her rented home in East Pisangan on Thursday (1/8).
However, after discussing it with his wife Novianti Anggraeni, 26, his dream of purchasing the house was dashed.
As a contracted PPSU worker, Rendi’s income is around Rp 3.9 million (US$273,35) a month. With a monthly installment of around Rp 1 million for 15 years, buying the house will only be feasible for him if his monthly income stays the same for 15 years. If Rendi does not pass the PPSU selection next year, he may not get another job with a similar salary.
Besides, if he moves to Cibarusah, he will need to set aside some money to purchase a motorbike on credit. This is because Rendi starts work at 5 a.m. every day, and Cibarusah is more than 50 kilometers away from the East Pisangan subdistrict office. Due to heavy traffic, travel time will be around two hours one way. This is still not including other expenses, such as for his daughter, who is currently 16 months old.
Unaffordable
Menur Maretta, 29, has a different story. With an income of Rp 13 million a month, she never thinks that she will need to find a home-ownership financing program. The Jakarta administration’s zero down-payment housing program is available for those with a salary of no more than Rp 7 million a month.
The woman from Madiun, East Java, who works in a company in Tanjung Priok, North Jakarta, is finding it difficult to find an adequate home near her workplace.
“Once I saw an ad for A housing estate near the toll road in Bekasi. The homes are priced at Rp 1 billion. If I buy it, I will need to buy a car so I can go to my office comfortably. The additional expenses will be huge,” she said.
Adequate homes with three rooms and 24-hour security near her office are around Rp 5 billion. One mid-class apartment unit is somewhere between Rp 550 million and Rp 700 million. However, she said the apartment unit would be too cramped for her, her husband and her child.
Menur said she hoped the government could provide affordable housing for everyone.
“Like in Singapore, where there are adequate flats with verandahs. It’s not cheap but still makes sense,” she said.
Recently married private sector worker Ciputri, 26, shares a similar story. She said she and her husband had to find a house in Depok, West Java, despite having a Jakarta ID card and working in Central Jakarta. It takes two hours for her to get from Depok to her office by train.
“The actual travel is only 40 minutes, but I need to head out of my home two hours before [my job starts]. Who knows if there will be disruptions or other things with the train,” she said.
With long travel periods every day, she said her quality of life was not as good as it could be if she lived downtown. However, with a monthly income of only Rp 7 million, she cannot afford it.
Trisakti University urban expert Yayat Supriyatna said that Jakarta’s workers should not force themselves to buy homes. A livable rented home with a healthy environment and reasonable price must be the priority. However, this is not without its problems.
Currently, 57 percent of tenants of the Jakarta administration’s low-cost rental apartments (Rusunawa), or 9,094 apartment units, owe between Rp 30 billion and Rp 35 billion in overdue rent (Kompas, 3/7/2019). This is a huge risk for private developers.
Therefore, Yayat suggested that the central government and Jakarta administration provide subsidy schemes for rental residences. There can be several classes of rental houses based on income. Incentives will be necessary for those with low incomes.
With the subsidy, Yayat said he believed developers would be willing to build rental homes. Rent assistance facilities must also be limited to a maximum of five years, for instance.
Jakarta’s Cipta Karya planning and land agency head Heru Hermawanto said zoning rules in Jakarta had been made easier for the government and private sector to develop low-cost apartments.
“For people with low incomes, the price is subsidized so it does not go up,” he said.
Heru said a common phenomenon was that native Jakartans had difficulty purchasing homes as locals so easily sold their land to developers.
However, the fact is that the government seems to be powerless in trying to resolve this problem. It seems to be difficult to control land prices so that property prices are also under control. In the end, locals can only be amazed with real estate ads without the actual capability to afford them.