Over the years, the Indonesia’s government has designed policies where low-income group could have access to affordable housing schemes. Ensuring affordability for low-income groups to own adequate shelter, the government deliver several policies to subsidize house prices at a reasonable level.

These programs are intended for targeted low-income groups to get benefit by having an adequate housings. These existing national programs for affordable housing are as follow:

  1. Self-Built Housing Subsidy (Bantuan Stimulan Perumahan Swadaya/BSPS)

Announced in 2006, the government provides an assistance to support incremental self-built housing, targeting rural and urban area beneficiaries. Eligible low-income households, with income below IDR 1.5 million per month, receive a subsidy of IDR 10.0-30.0 million for home improvement or new construction under this scheme.

  1. Mortgage financing facility (Fasilitas Likuiditas Pembiayaan Perumahan/FLPP)

FLPP program has been started in 2010 intended to overcome the backlog housing by providing soft lending scheme. FLPP provides concessional funds to lenders, who provide mortgages at fixed interest rates to households at 5 percent annually for 20 years. Source of this liquidity is mainly coming from the government and only small percentage of funds are provided by others (i.e: the participating banks and public service units).

However, during the implementation of those programs, there are still many whom have difficulties to reach the programs and housing backlog is still relatively high. Therefore, effectiveness of these programs has become the center of the issues of its implementation.

This project aims to: 1) evaluate the design, implementation and outcomes of housing policy programs in several regions in Indonesia; 2) understand the critical issues in the development of affordable housing programs through the challenges and its potential in the future. This project will use a mixed-methods approach with quantitative statistical analysis as well as qualitative methods (interviews and focus group discussions). 

Advisors: Dr Sonia Roitman, Dr Thomas Sigler

Funding: LPDP

Project members

Fino Valico WARISTI

PhD Candidate