Indonesian govt committed to providing affordable housing

Houses are a basic public necessity that must be met, both for people from the high- and low-income groups.

To ensure fair and balanced opportunities for people to own proper houses, the Indonesian government will continue to subsidize modest housing, so that those from the low-income group can afford them.

President Joko Widodo (Jokowi) has reiterated the governments commitment while attending a groundbreaking ceremony for the construction of affordable flats for blue-collar laborers in Serua Ciputat, South Tangerang, Banten Province, on Apr 27.

PT PP, the developer for the construction of flats in South Tangerang, has planned to build nine thousand flats that are expected to be completed in 2018.

Of the total, six thousand flats will be offered to laborers at a price of Rp293 million per unit, with a down payment of only one percent and an installment of Rp1.2 million per month. Each unit measures 30 square meters.

"This project is very important to realize the workers welfare because the flats are affordable, inhabitable, and strategically located. I will continue to encourage relevant agencies to build such apartments in large numbers," the president stated.

The government will continue to prioritize the construction of low-cost houses for people from the low-income group, particularly laborers, he emphasized.

In the near future, affordable houses will be built in Depok and Bogor, West Java Province, he added.

"Next week, we will witness the construction of two thousand houses near Depok station," he stated.

Each 21(meter)-type house will be sold at Rp112 million, which is affordable for blue-collar workers in Bogor and Depok.

"It is very cheap. Non-blue-collar workers should refrain from buying them. If it is saleable, I will push for more development. However, if it is not saleable and only the rich could afford them, then it will be stopped," he noted. 

The government should have had a land bank to enable it to build low-cost houses in the downtown areas since a long time ago, he remarked.

He also pointed out that the construction of houses for laborers in industrial zones will help to reduce the transportation costs. The president has urged developers to complete the housing construction projects for workers on time.

During the groundbreaking ceremony, the president was accompanied by Public Works and Housing Minister Basuki Hadimuljono, Manpower Minister Muhammad Hanif Dhakhiri, Chief Commissioner of state-owned construction company Pembangunan Perumahaman (PP) Andi Gani Nena Wea, and PP President Director Tumiyana.

The construction of the low-cost apartments is part of the governments program to provide housing at affordable prices for people from the low-income group.

The Public Works and Housing Ministry, along with the Manpower Ministry and state-owned construction companies, are striving to address the housing backlog by building low-cost houses for workers, among other steps.

Minister Hadimuljono expressed readiness to cooperate with other agencies, including state-owned companies, to build more apartments for low-income people.

"The government provides a subsidy of up to Rp9.7 trillion on interest, a subsidy of Rp3.7 trillion for the interest difference, and a subsidy of Rp1.2 trillion for down payment. Hence, the government offers several facilities for providing low-cost houses," he remarked.

Meanwhile, data provided by the Central Bureau of Statistics showed that in 2015, Indonesias housing backlog had reached 11.4 million units, or a decline of 16 percent as compared to the previous year.

Finance Minister Sri Mulyani noted that the housing demand in Indonesia has reached 820 thousand to one million houses a year.

Some 40 percent of the demand could be met through the involvement of the private sector, 40 percent though independent wealthy citizens, and some 20 percent through the governments subsidy to the poor people.

In 2016, the government had allocated Rp24.4 trillion from the state budget for the development of 21,763 apartments and 158,367 stimulant assistances for housing quality improvement.

In 2017, the number of apartments has increased to 13,253 units, and stimulant assistances to 108 thousand for improving the housing quality.

The government has also provided funds worth Rp9.2 trillion for 83,493 low-income families in 2016 and Rp9.7 trillion of funds for 175 thousand low-income families in 2017 through the Housing Finance Fund Management Center. 

According to the minister, the growth in urban population in Indonesia has reached 4.1 percent, higher than other developing countries, such as China, at 3.8 percent, and India, at 3.1 percent, which also faced the problem of urbanization.

Hence, adequate housing in urban areas is urgently needed to have a multiplier effect on the domestic economy.

"We need more houses because of the urbanization process and high urban population growth. The housing sector will have a huge multiplier effect, as it can boost the economy," she remarked.

President Jokowi has, in fact, set an ambitious target of building 10 million houses for people from the low-income group by 2019, or two million houses annually.

Under the housing program, the government is expected to reduce the housing backlog to 6.8 million in 2019.

The private sector, through the Association of Indonesian Real Estate Developers (REI), has expressed commitment to supporting the governments program.

"As housing developers, we have to support this program to boost housing development in Indonesia," REI Chairman Soelaeman Soemawinata stated.

REI has committed to building 200 thousand units of subsidized houses through the governments program of housing finance liquidity facility

Source: ANTARA