Achieving A Million Houses A Year

UntitledHome to more than 250 millions people, Indonesia is the 4th most populous country in the world after China, India and the U.S. Although there has been substantial residential development in Indonesia recently, there is 13.6 million number of housing backlog (National Bureau of Statistics). In order to overcome this issue, the Indonesian government launched “One Million Houses” Program in April 2015 (website in Indonesian). This program strives to provide one million units of affordable housing each year across the country for mostly low income, displaced families.

As of December 2015, the program has successfully realized 667,668 units. Despite it was approximately 33% below the target, I am still optimistic about the success in the coming years as long as all parties continue to take the program seriously. There are many concerns to be looked at. However the Indonesian government can start with these issues:

Master Plan. Strategic master plan and clear spatial planning are necessary to make this a successful program. The strategy includes enacting a coordinated system in the central government between the ministries and other institutions, from the financing to housing to forestry sector. There should be detailed targets for each province based on their unique social characteristics and local policies. The spatial plan will facilitate the provision of infrastructure and joint cooperation of private developers for residential development.

Land Acquisition. The availability of land is always a critical problem in construction projects. Currently, developers have difficulty in building low income housing due to the cost of land based on development speculation. Learning from the success from other countries, such as Hong Kong and Singapore, the Indonesian government may need to leave behind the concept where land price is the determining factor for the house price, especially for providing the low-income housing projects. The government can intervene from the supply side by not fully commercializing the land to control the land price. This way, land banking will help meeting the program requirement.

Resilient Regulation. An Indonesian statute established in 2011 requires housing typologies to be 36 m2 at minimum. This new regulation caused discrepancy with the previous years regulation, where the minimum type used to be 21 m2. It significantly changed many aspects and force the previous low-income housing project plan type 21 to be totally discontinued. Changes similar to this regulation in middle of the program should be avoided unless absolutely necessary. Thus, the Indonesian government need to thoroughly analyze all aspects as early as possible, such as reviewing the standard of affordable housing that really match with the community’s purchasing power.

The one million houses project was launched by newly elected President’s administration that although thought to be an ambitious program for some parties, but generally well appreciated as pro-people program. I hope this program is not just a “political will” idiom but becomes a long term project. Therefore, by putting efforts in establishing a master plan for residential development serving low income people across the country, securing a land bank through government protection, and developing consistent regulation, “One Million Houses” program can become a sustainable reality.

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