Housing Policy for the poor in Malaysia and Indonesia

Housing is a fundamental necessity that ensures the basic well-being of any society. The issue of affordable housing has garnered significant attention worldwide, particularly in developing countries where the demand for low-cost housing is high. Malaysia and Indonesia, as developing nations, have placed a strong emphasis on housing programs for the poor. This paper aims to explore the housing policies for the poor in Malaysia and Indonesia, comparing their approaches and evaluating the effectiveness of their respective programs. By examining these policies, we can gain insights into how developing countries can better address the housing needs of their low-income populations, ultimately contributing to societal well-being.

Malaysia’s National Housing Policy (2018–2025) is a comprehensive framework designed to address housing affordability and improve living conditions for low-income families. The policy focuses on increasing the supply of affordable housing and promoting homeownership among the bottom 40% income group (B40). Key initiatives under this policy include the People’s Housing Programme (PPR) and the Rent to Own (RTO) Scheme.

The PPR is a critical component of Malaysia’s housing policy, aimed at providing low-cost housing for low- and middle-income families. Despite its success in delivering a significant number of housing units, challenges remain. As of mid-2023, there was a significant gap between the demand and supply of affordable housing units, with only 50,036 units available while the demand exceeded 83,603 units.

The RTO Scheme allows families to rent a property for five years before being able to borrow money to purchase it. This initiative aims to reduce financial barriers and enhance homeownership opportunities for low-income households. Additionally, the National Home Ownership Campaign offers stamp duty exemptions for first-time buyers purchasing homes valued under RM500,000.

Indonesia’s housing policy for the poor is centered around the “Satu Juta Rumah” (One Million Houses) program, launched in 2015. This program aims to provide affordable housing for low-income families through a combination of government subsidies, partnerships with private developers, and community participation.

The Indonesian government offers various subsidies to support the construction and purchase of affordable housing. These subsidies include financial assistance for down payments, interest rate subsidies, and tax incentives for developers. The government also collaborates with private developers to ensure the availability of affordable housing units in urban areas.

Community participation is a crucial aspect of Indonesia’s housing policy. Local communities are involved in the planning and implementation of housing projects, ensuring that the needs and preferences of the poor are adequately addressed. This participatory approach helps in creating sustainable housing solutions that are well-suited to the local context.

Both Malaysia and Indonesia have established comprehensive housing policies aimed at addressing the housing needs of the poor. Malaysia’s National Housing Policy (2018–2025) and Indonesia’s “Satu Juta Rumah” program share a common goal of increasing the supply of affordable housing and promoting homeownership among low-income families.

Malaysia’s approach focuses on a mix of rental and ownership schemes, such as the PPR and the RTO Scheme. In contrast, Indonesia’s program relies heavily on government subsidies and partnerships with private developers to deliver affordable housing units.

Despite their efforts, both countries face challenges in meeting the housing demands of the poor. Malaysia struggles with a significant gap between the supply and demand for affordable housing units, while Indonesia faces issues related to land availability and infrastructure development.

The housing policies for the poor in Malaysia and Indonesia demonstrate a commitment to addressing the housing needs of their low-income populations. By comparing their approaches, we can identify best practices and areas for improvement. Both countries’ policies emphasize the importance of government intervention, community participation, and partnerships with the private sector. However, ongoing challenges highlight the need for continued innovation and adaptation to ensure that housing programs effectively meet the needs of the poor. Further research and collaboration between these countries could provide valuable insights for other developing nations seeking to improve their housing policies.