Indonesian government says price hike for subsidized housing won’t hinder uptake

The Public Works and Housing Ministry recently increased the maximum price at which landed houses can be sold to low-income earners in 2023 and 2024.

Ruth Dea Juwita

Ruth Dea Juwita

The Jakarta Post


An aerial picture taken on Aug. 4, 2021, shows a housing complex for residents in Jakarta, near the border with a neighboring province.(AFP/Bay Ismoyo)

July 25, 2023

JAKARTA – Higher prices for subsidized housing will not have a major impact on the government’s plan to distribute 220,000 units to eligible buyers this year and next, which is the target set in the 2020-2024 medium-term national development plan (RPJMN).

The Public Works and Housing Ministry recently increased the maximum price at which landed houses can be sold to low-income earners in 2023 and 2024.

According to the ministry, the increase ranges from Rp 162 million (US$10,700) to Rp 234 million, depending on the type of property, representing an 8 percent increase from the previous limits set in 2019.

The increase for city-owned subsidized apartments (Rusun), also known as vertical housing, on the other hand, is still being discussed.

Herry Trisaputra Zuna, director general of public works and housing infrastructure financing at the ministry, said in a media briefing at his office on Friday that a new distribution target was now being calculated by the Public Housing Savings Management Agency (Tapera) but vowed that the new target was “at least equivalent” to the RPJMN’s 220,000. Meanwhile, Tapera’s initial target was to fund 229,000 units.

Herry said the higher subsidized house price caps were based on the average increase in construction costs, as reflected in the wholesale price index.

Read also: Govt exempts meals, housing from benefit-in-kind tax

This latest policy stipulates limits on land area, floor area and selling price of landed houses eligible for the house financing liquidity facility (FLPP) and subsidized down payment assistance (SBUM), as well as the amount of subsidy received by the low-income inhabitants.

The subsidy for low-income inhabitants will be distributed through a house financing liquidity facility (FLPP) managed by Tapera.

Tapera commissioner Adi Setianto assured the press that the availability of Rp 26.21 trillion in funding was enough to meet the RPJMN target of 220,000 units despite the recent cost surge.

Adi explained that the target was reachable because the government had “optimized the program’s funding” by depositing some of the funds. With this system, FLPP funds could meet the distribution target despite price increases.

As of July 2023, FLPP realization has reached 47.15 percent, or 103,749 out of the targeted 220,000 units.

Read also: World Bank helps PNM provide decent housing for customers

The government also explained that informal-sector workers could now take advantage of FLPP subsidized houses under a policy change to be finalized in the third quarter of this year.

“This year, [the government] will expand the target [group] to independent participants. […] God willing, in July or August we can start the implementation,” Herry said.

He added that there would be two criteria for informal low-income participants, namely people who are not wage earners or nonpermanent workers, such as workers without contracts.

Tapera’s Adi said the payment scheme still used the FLPP but would be facilitated through another savings scheme called the basic civic account (BCA).

However, he noted that the new proposal could only reach 10 percent of the total participants, since “the regulation is still new”.

scroll to top