Indonesia: Affordable Housing for Low-Income Communities

Introduction:

The increase in population causes an increase in housing demand, especially for low-income communities. However, the high demand for housing is imbalanced with the availability of housing supply, which is a factor affecting the high housing prices and land prices. The problems of meeting housing needs that must be resolved by governments in various countries include the problem of affordability and the backlog. Fulfilling housing needs is an important thing for the survival of each individual or community group, especially for low-income communities. The definition of a house as a noun is a commodity that can be bought and sold and a place to live.

The method used is quantitative, primary data collected through field observations and interviews with residents and housing provider stakeholders. Meanwhile, secondary data obtained through government agencies and websites. The analysis technique uses a quantitative descriptive method and map overlay. The results showed that the function of houses is 60% for investment by rent out the housing to others, 30% as residential functions for civil servants, and 10% sold to other people.

This condition is due to the status of the house is not the owner’s first home, strategic housing location, and triggered by an increase in land value. The contribution of this research is that previous researchers discussed a lot about the construction of cheap houses that received subsidies from the government, whereas in this study, the price reduction was the result of taking land assets belonging to the government in the form of Government Land.

Affordable Housing for Low-Income Communities:

The problem of meeting housing needs for low-income communities is the inaccessibility of prices on the housing market. The Salatiga government has made efforts to meet this need by building low-cost houses for civil servants that utilize Government Land, thus keeping prices far below standard. As time went on, these cheap houses that belonged to civil servants were not used as residential for the owners, but most of them became long-term investments. Based on these problems, the study aims to examine the impact of the low-cost house construction, namely KORPRI Housing in Prajamukti, Salatiga City on residential and investment functions

Overview of the Prajamukti KORPRI Housing Development:

Salatiga City is one of the cities in the province of Central Java with high population growth, but with limited land, the local government subsidizes land to civil servants who are members of KORPRI at a low price. When compared to other areas in Central Java, land for housing in the City of Salatiga is very limited. There are 2 locations of KORPRI housing in the City of Salatiga, but between the two locations in the City of Salatiga, Prajamukti KORPRI Housing was chosen as the focus of the research location because the residents are mostly low-income communities (class II and III civil servants). While in one location, namely Prajamulia Housing, the owners are mostly from the upper class.

Mechanism Analysis of Change in Housing Ownership Type in Prajamukti KORPRI Housing:

The Government of Salatiga helped low-income communities, in this case, civil servants who are members of the KORPRI, to be able to own a house at a low price. The practice of building low-cost housing through the use of government-owned land assets and collaboration with stakeholders (government-private-community) in Salatiga was able to reduce house prices by 34% or IDR 45,000,000 below the standard price for housing units with a mortgage (KPR) set by the government of IDR 130,000,000. The Salatiga City Government carried out development by transferring land ownership from assets belonging to the village government (public rights) to the community (private rights). The criteria for the low-cost housing receivers included:

(1) civil servants who work in Salatiga City;

(2) prioritized for class II and III, and possibly for class IV as the next priority;

(3) prioritizing civil servants who have a minimum work period of 5 years;

(4) a married couple who are civil servants can only have 1 house;

(5) prioritized for those who do not have a house;

(6) civil servants who had a retirement period before December 2012;

(7) Civil servants who have acquired a house may not be transferred within 5 years

Conclusion:

The affordability of housing prices in the Prajamukti KORPRI Housing, Salatiga City for KORPRI member civil servants was due to a subsidy from the government in the form of releasing government land assets to the community at a low price. Based on the results of the research, civil servants who are members of KORPRI have bought a house with ownership rights as the owner, but over time, the type of homeownership has changed. Type of homeownership in Prajamukti KORPRI Housing, namely 30% owned and occupied by the first owner, 60% leased or rented, and 10% being transferred or sold.

Also Read: Long-term Sustainable Housing Solutions for Vulnerable Residents