For ‘kos’-owners: no pain no gain

With the high demand for inner-city housing from office workers, owning and running a kos (boardinghouse) might seem like a lucrative business.

But owning a kos is nothing like the traditional landowner who sits idly and has the rent money pour into his bank account. Maria M. Limaningsih, 56, a kos-owner in Jakarta, understands the difficulties. “People think that owning a kos is convenient and easy,” she said. “But it’s a difficult job,” she said.

Having successfully run two boardinghouses for students in Surabaya, the nation’s second largest city, with a total of 40 rooms, Maria saw the business potential of owning a kos in the capital. She bought an old house on a 300-square-meter site in Setiabudi, Jakarta and converted it into a three-story boardinghouse with 20 rooms, she has called it Griya Amartha.

Maria hired a contractor to design and construct her boardinghouse; a designer for the furnishing; a brand managing company to find a name and logo for her house. She spent a total of Rp 4.7 billion (US$492,000). She charges Rp 3 million a month for a nine-square-meter room with air-conditioner, WiFi, cable television and an ensuite bathroom with hot-water.

“But it’s very troublesome,” she said. She outsources a receptionist and security guards as well as a valet parking attendant. “The parking space is in the basement and it’s difficult to park, so I hired a valet”. She also hired four domestic workers to do the laundry and clean the rooms.

“I have to be on call, if the air-conditioner breaks down, or the water doesn’t run,” she said. She also has to pay for the electricity. “And you can’t tell people not to use too much electricity.”

But it pays, she said, taking home Rp 49 million every month after expenses.

Apartment owner Amin Cheng said he no longer had the patience to run a boardinghouse. He used to have a 17-room boardinghouse for students in Kemanggisan, West Jakarta. “There are always problems of leaks or the water pump not functioning. There are a lot of things to handle,” he said.

Moreover when the government progressively increased the price of electricity, Amin decided to sell his boardinghouse. He has chosen to invest in condominiums and rent them to high-earning families.

There is no exact data on the number of kos in Jakarta. Requests for an interview with the Jakarta deputy governor on housing affairs have not been answered. However, in 1987, the city passed a bylaw on boardinghouses. It obliges kos owners to register their boardinghouses and to report the identity of tenants for registry purposes. Compliance with this bylaw however is questionable at best.

Both Amin and Maria said they did not register their kos despite the bylaw.

Maria said that in her area, it was left up to the individual so she did not feel it was necessary to report even to the local neighborhood leader (RT). “But I do keep a log of the tenants’ identities,” she said.

— Prodita Sabarini

The Jakarta Post | Reportage | Wed, September 26 2012

Welcome to Jakarta’s shoe-box living

Communal living: The foyer of a boardinghouse in Kemanggisan, West Jakarta. Some owners are oblivious to the city rule requiring business registration. JP/ Ricky Yudhistira
Communal living: The foyer of a boardinghouse in Kemanggisan, West Jakarta. Some owners are oblivious to the city rule requiring business registration. JP/ Ricky Yudhistira

The night sky in the capital was its usual reddish-magenta hue and Jakarta newbies Ele Williams and Philip Martin could see glimpses of it from their open-air dining area, beyond the walls of a three-story building containing 20 rented rooms. They sat facing each other at the dining table, a tiny space in the nook of a small garden. A gas stove and a kitchen sink were nearby, part of a communal kitchen for the building’s entire occupants.

Both Williams and Martin are UN volunteers, living in Jakarta on a budget. When Williams, 29, moved to Jakarta from Canberra, Australia, she knew what she was in for. Having lived in boardinghouses in Yogyakarta a few years back and having made short visits to Jakarta, she knew that the city placed demands on its residents. But after two months living in a nine square-meter room, though conveniently near her place of work, Jakarta is starting to get to her. Lacking space, her kos (boardinghouse) around Menteng did not feel like home. “I’m feeling very claustrophobic,” she said.

As the country’s economy soars — 6.4 percent growth in the second quarter, bucking the global trend of slow growth — and Jakarta becomes a busy business center, more and more people are coming to the city. Young expatriates such as Williams and Martin join the throngs of thousands of Indonesia’s young professionals searching for a living.

For many, it is not so much enjoying living in the capital as it is surviving the daily challenges that is poses, with infrastructure development lagging behind an increasing population. Jakarta’s population has exceeded 10.1 million and the sprawling Greater Jakarta (Jakarta, Bogor, Depok, Tangerang and Bekasi) area is home to 27.9 million according to the 2010 census. Real estate consultancy firm Jones Lang LaSalle estimates demand for new residential units in Greater Jakarta to stand at 200,000 units per year.

Lang LaSalle reported the current supply by property developers and state housing projects could only supply a quarter of the demand, standing at 40,000 to 50,000 units per year. Most of this — 75 percent — is still landed housing in Jakarta’s outskirts and satellite cities. The rest are high-rise condominiums and low-cost apartments.

With high demand for housing, Jakarta, driven by the development of housing complexes, condominiums and offices, has been experiencing a property boom in the last two years. Indonesia Property Watch director Ali Tranghanda cited Bumi Serpong Damai, a residential area south of Jakarta, where prices have gone up by 60 to 70 percent since last year.

Yet the luxury of adequate personal living space in Jakarta is limited and expensive. For the moment, it is reserved for high-income earners.

In inner city Jakarta, developers are constructing 27,000 more condominium units to add to the city’s 77,000, with selling prices between Rp 12 million (US$1,250) to more than Rp 25 million per square meter.

City figures show Jakarta’s income per capita in 2011 was Rp 101.01 million per year, which means that to purchase a lower-middle-grade 31 square-meter condominium, an average Jakartan would have to spend nearly four years worth of their yearly income. The same amount of money can buy a 63 square-meter plot of land on the city’s outskirts. The trade-off for a home and a tiny garden for middle-class Indonesians means hours of commuting in Jakarta’s endless traffic or unreliable public transport.

Land owners and small individual investors riding the wave of a rising housing demand for Jakarta office workers saw this as a business opportunity and grabbed it. Boardinghouses have always been a part of Indonesia’s cities that have migrant populations. But in the last few years, “executive” boardinghouses targeting office workers mushroomed in residential areas near the capital’s business districts.

Ranging from Rp 2 million to Rp 5 million per month, these rooms are more expensive than your basic fan room but are relatively cheaper than renting an apartment. They provide meager personal living space but are equipped with facilities that help one wile away the time (WiFi, cable TV), sleep sweat-free in the heat of the city (air-conditioned rooms) and not have to walk to the nearest mini-market for a bottle of soda (refrigerator). These rooms are options for office workers who want to either save money or time.

Those who, like Williams, are scared of being caught up in Jakarta’s snarling traffic, have no choice but to live in fanned or air-conditioned “shoe boxes”.

Martin, 33, said that if only there was more sense of community in boardinghouses, the experience would not be too bad. His neighbors, he said, were “awkwardly unfriendly”.

“If people come down here and have a glass of wine or beer every so often it would be great. It could be really fun, but it’s not like that. Probably people are tired after work,” he said.

Prodita Sabarini, The Jakarta Post | Reportage | Wed, September 26 2012