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Going beyond the housing backlog, Jakarta needs holistic strategy
The national government’s housing loan facility is a good start but ignores the urban population.
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High rise hygiene: A worker cleans hand washing facilities at a low-cost apartment in Rawa Buaya, West Jakarta, on Wednesday. (JP/Dhoni Setiawan)
T
he housing backlog has received an undue spotlight. Many government policies intended to reduce the number waiting for housing have not made any substantial dent.
As Indonesia’s population urbanizes, it is time for the government to initiate a holistic housing strategy for urban dwellers. As a start, we ought to debunk the backlog myth. Jakarta’s fixation on an elusive number will never make an impact. Instead, attention should be drawn to market absorption.
The Jakarta administration continues to build. Developers of large apartment projects—5,000 square meters of land or larger—also build to contribute. They are required to construct subsidized housing, which amounts to 20 percent of their commercial areas, on behalf of the government.
Ironically, as per August this year, an estimated 26,000 rusunawa (public rental units) subsidized by the Jakarta administration remained unoccupied. The apartment units in Rusun Pasar Rumput are still vacant despite construction having been completed in September 2019.
The units in Pondok Kelapa under the touted “DP Nol” (zero down payment) program are also not easily absorbed. According to Jakarta’s Housing Agency, only 681 units had been sold as per March 5. This a far cry from the target of 232,214 as outlined in Jakarta’s Mid-term Development Plan (RPJMD) 2017-2022.
Evidently, the backlog numbers we often see in the media are irrelevant. Relentless construction is not the solution if it is not accompanied by an emphasis on market absorption. Developers are eager to fulfil their obligation and help the city’s housing problem, yet their role is limited to physical construction. The onus is on the government to ensure absorption.
First, the government could intervene to encourage wider access to favorable mortgage schemes. What is on the market is beyond the reach of the majority of the population. The national government’s housing loan facility is a good start, but ignores the urban population. Jakarta’s “DP Nol” is not taking off.
