June 25, 2025
JAKARTA – The government plans to renovate 2 million houses nationwide by December, supported by a hefty Rp 43.6 trillion (US$2.65 billion) allocation from the state budget, Deputy Public Housing and Settlements Minister Fahri Hamzah revealed.
He said the program, part of President Prabowo Subianto’s pledge to deliver 3 million homes each year, has already secured approval from the Finance Ministry and would be formalized soon. The remaining 1 million homes from the target, meanwhile, would be provided as vertical housing.
“Even with just six months left this year, the President continues to emphasize that 2 million homes must be renovated,” Fahri said during the Indonesia Economic Prospects (IEP) forum hosted by the World Bank and broadcast live on Monday.
The program would expand the current independent housing stimulus assistance (BSPS) program, which previously aimed to renovate just 140,000 homes annually. Each household would receive Rp 21.8 million in repair subsidies.
Fahri acknowledged that scaling up to this ambitious target would require stronger coordination with multiple ministries and institutions, including the Finance Ministry, the National Development Planning Agency (Bappenas), the Social Affairs Ministry, the Indonesian Military (TNI) and the National Police.
“This leap from 140,000 to 2 million units demands a [considerable] effort, [proper] planning and accountability,” he stated.
Previously, Fahri also proposed incorporating micro-credit financing to enable local developers and communities to invest further in renovations.
The decision to renovate 2 million houses reflects a shift from the original pledge of President Prabowo, who has tasked his brother Hashim Djojohadikusumo with leading the housing task force to support the Housing Ministry.
On several occasions, Hashim has explained that the promised 3 million homes per year would comprise 2 million units in rural areas and 1 million in urban centers.
Experts, however, have raised doubts about the feasibility of this target, citing limited local capacity in both funding and infrastructure to support construction at such scale.
On May 19, Public Housing and Settlements Minister Maruarar “Ara” Sirait came under fire from members of the House Commission V, overseeing infrastructure and disadvantaged regions, who slammed the program’s lack of progress, from budgeting and planning to actual construction.
“There is no budget, no implementation. It’s already May, and the target is nowhere in sight,” said Yanuar Arif Wibowo, a Commission V lawmaker from the Prosperous Justice Party (PKS), as quoted by Kompas.com.
Yanuar went so far as to call the program “mere talk,” suggesting it amounts to little more than an empty promise.
Meanwhile, a leaked draft decree earlier this month revealed the ministry’s plan to shrink the minimum plot size for subsidized homes from 60 square meters to just 25 sq m, and to reduce the minimum building footprint from 21 sq m to 18 sq m. The developers association stated that the effort would help make housing prices more affordable amid rising construction costs and urban land values.
Minister Ara has championed the proposal and even brought property giant Lippo Group on board to help make it a reality. But the plan has sparked friction, with Deputy Housing Minister Fahri and taskforce leader Hashim rejecting the idea outright.