EFECTIVITY OF IMPLEMENTATION OF SUBSIDIZED HOUSING POLICY AND PROGRAM IN INDONESIA

• Main Author: Adha Sitorus, Nurul
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/79565
• Institution: Institut Teknologi Bandung

The continuous growth of the population has resulted in an imbalance between the demand for housing and its availability, leading to a housing backlog. The high prices of houses create barriers for low-income communities in realizing their dream of homeownership. Therefore, there is a need for housing provision, especially for low-income communities, ensuring that they have effective purchasing power for homes. In response to this issue, various government efforts have been made to assist low-income communities in accessing housing, including the launch of subsidized housing programs such as subsidized home loans (KPR) funded by the State Budget through the Ministry of Public Works and Public Housing. However, in the implementation of subsidized housing programs aimed at providing affordable and decent housing for low-income communities, several challenges arise. These include the ownership of many housing units by groups not targeted by the program, houses purchased but left unoccupied by owners, and the utilization of houses as investments or rentals. Additionally, affordability issues persist, where the selling prices do not align with the purchasing power of the community, and the physical quality of buildings and infrastructure does not meet adequate standards. These challenges indicate the ineffectiveness of subsidized housing program implementation in Indonesia. This research conducted a systematic qualitative literature review on the implementation of subsidized housing policies, analyzing six publications from 2007 to 2023. The study identified three main issues contributing to the ineffectiveness of subsidized home loans (KPR) in Indonesia. Furthermore, the research identified root causes, including housing finance policy, housing policy actors, and housing institutions. The analysis results indicate that the ineffectiveness of subsidized housing program implementation in Indonesia is attributed to three main factors: misalignment of targets, unaffordability, and inadequate physical conditions of buildings and infrastructure. This is primarily due to the lack of integration between the supply and demand sides. The government's focus on the demand side, emphasizing the "bankability" aspect, evaluates the financial eligibility of potential borrowers from the perspective of banks or financial institutions without intervening on the supply side. The absence of a public institution on the supply side is notable. Learning from experiences of developed countries, effective housing institutional frameworks address both supply and demand sides. Singapore, for example, has the Housing and Development Board (HDB), an integrated public institution responsible not only for housing production but also for managing related financial institutions. Recognizing this, the government needs to engage in both the production (supply) and finance (demand) sectors. Housing cannot solely rely on demand; thus, housing finance should be integrated with housing supply performance. Establishing a formal housing finance institution by the government and a dedicated housing and urban development authority becomes crucial in building a robust housing provision system for the people.