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View all search resultsGovt, property startup push rent-to-own for priced-out middle class
For many aspiring homeowners, a rent-to-own scheme is being hailed as a lifeline to homeownership, but they stressed that the scheme will only succeed if the monthly payments remain truly affordable.
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Children play in the yard of the Pasar Rumput Simple Rental Apartments (Rusunawa) on May 4, 2020 in Jakarta. (Antara/Dhemas Reviyanto)
B
oth the government and the private sector are ramping up efforts to tackle the housing gap with a new scheme called rent-to-own (RTO). The arrangement targets the country’s “missing middle”, those who earn too much to qualify for subsidized housing but not enough to afford skyrocketing property prices.
For many aspiring homeowners, it is being hailed as a lifeline to homeownership. However, they stress that the scheme will only succeed if the monthly payments remain truly affordable.
Heru Pudyo Nugroho, commissioner of the Public Housing Savings Management (BP Tapera), explained that the RTO scheme is designed to improve the bankability of potential homebuyers without a formal credit history.
Under the plan, tenants may rent a property for two to five years, with part of their installments credited toward a down payment for the property.
“By consistently paying rent, part of the rent will be counted toward a down payment, allowing their repayment record to demonstrate good creditworthiness,” Heru told The Jakarta Post on Thursday.
The scheme is primarily targeted at urban areas, where landed house prices have skyrocketed beyond the reach of many middle-income earners. Piloting is expected to begin in the Greater Jakarta area next year.
“It is more realistic to direct the scheme toward vertical housing, such as modestly priced apartments or low-cost condominiums (rusunami),” Heru said.
