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Homes, not houses: Concerns linger over Prabowo’s urban housing push
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A subsidized housing complex in Puuwatu district, Kendari, Southeast Sulawesi, is pictured on Aug. 1, 2024. Property developer association Real Estate Indonesia has blamed peer-to-peer loans for the bad credit history of
some potential homeowners.
(Antara/Andry Denisah)
P
lans are being laid out for the development of approximately 1 million new urban housing units this year, primarily in the form of vertical housing, as part of President Prabowo Subianto’s 3 million houses program. But experts are unconvinced that simply erecting more residential towers will solve Indonesia’s urban housing woes.
Much of the attention on the 3 million houses program has focused on Public Housing and Settlements Minister Maruarar "Ara" Sirait's efforts to finance the project, especially after government-wide budget cuts left the ministry unable to fund more than 10 percent of the annual construction target from its own coffers.
To secure funding, the ministry has sought support from national and foreign investors as well as local banks and businesses. It also aims to cut costs by using confiscated land and renovating idle state-owned buildings.
After meeting with Ara, State-Owned Enterprises (SOEs) Minister Erick Thohir announced that 792 hectares of land in Greater Jakarta would be allocated for the project, which will provide 123,000 transit-oriented housing units. Similar developments are planned for Surabaya in East Java and Bandung in West Java, respectively the second- and third-largest cities in the country.
The Athletes Village apartment complexes in Central Jakarta, as well as various government-built vertical housing projects in and around the capital, are also expected to be refurbished to meet the annual quota.
The government is planning to allocate the housing units to households in the bottom fifth of the income bracket, with data from Statistics Indonesia (BPS) used to identify the exact recipients. It remains unclear whether the recipients will receive the housing units for free or through a subsidized mortgage scheme.
Read also: Ministry seeks World Bank support for 3 million houses initiative
