Indonesia’s One Million Houses Program on Schedule in 2017

August 11, 2017, Indonesia-investments.com

The one million houses program was launched in mid-2015 by Indonesian President Joko Widodo. Through this program the government aims to provide adequate housing facilities to low income families. Over half of these houses are built using funds from the central government’s state budget. Meanwhile, state funds will also be used to finance the Housing Loan Liquidity Facility, government-backed mortgages for low-income households. In 2017 the government targets to build 700,000 houses for for low-income families and 300,000 houses for those who enjoy a higher income.

So far this year the performance of the one million houses program is better compared to last year. In full-year 2016 only 805,169 house units were constructed under the program.

The better performance this year is partly attributed to the release of the government’s 13th economic policy package on 24 August 2016. This package simplified the process to establish residential property projects for low-income families. For example it has been made easier to obtain the building permit (Izin Mendirikan Bangunan, IMB) or the building worthiness certificate (Sertifikat Layak Fungsi, or SLF) for low-income housing programs.

However, there are some reports that deregulation measures as set out in the 13th economic policy package are not being fully implemented by local governments and therefore resulted in the delay of several projects.

Basoeki Hadimoeljono, Public Works and Housing Minister, urges all stakeholders to safeguard the quality of the property as well as supporting infrastructure and facilities, including water and waste management. Developers of infrastructure in the area of low-income housing programs can count on subsidy from the government.

Low-income families can buy a unit under the one million houses program by using government-backed mortgages that carry a modest five percentage point interest rate (for a 20-year period). Moreover, the down payment is as low as one percent of the property unit’s price. Indonesians who do not have a payroll wage (that can be used as bank collateral) can use the government-backed smallholder business credit system for the purchase of a house under the program.

President Widodo, often called Jokowi, earlier said he wants to see the construction of 10 million new houses for the country’s low-income households between 2015 and 2019 as the ownership of adequate housing facilities is vital for the dignity of a person. The one million houses program is part of Widodo’s nine priorities agenda called “Nawa Cita”.

Progress Indonesia’s One Million Houses Program:

  2015
  2016   2017¹
House Units Constructed
699,770 805,169 499,702

Supporting Partners