Disampaikan oleh Nugroho tri Utomo (Direktur Permukiman dan Perumahan Bappenas) dalam Pra Seminar nasional Penanganan Perumahan dan Permukiman Kumuh di Jakarta 18 September 2012

1. Discussion Paper:
Reinventing Government on Low-
Income Housing Provision
DIRECTOR OF SETTLEMENT AND HOUSING
NATIONAL DEVELOPMENT PLANNING AGENCY
(BAPPENAS)

2. Characteristics of Housing
 Big volume (bulky) and needs space and land
 Different from public infrastructure, housing
involves personal preferences related to models,
structures as well as materials.
 Housing is the biggest asset owned by most
households and paid over several periods of
payment.
 Need operational and maintenance costs, otherwise
to be slum area in the long run

3. Rule of Thumb
 Middle and high-income housing can be fully
delivered by market mechanism
 But low-income housing are in difficulty without
government supports  newly formed households
cannot afford the lowest-price housing in the formal
housing market
 What kind of supports?

4. 1st Issue : Low Affordability
 18 percent of low-income households live not in their
own-houses (rental, as extended family in parents or
relatives, others)
 62 per cent of total workforce work in informal sectors
and most of them are associated with poverty.
 Paid daily, no regular salary, no registered asset (dead capital) 
difficult to access credit or housing mortgage from formal financial
institution
 Barriers for accessing housing mortgage: only 18 percent of the
buyers used housing mortgage, Why?
 Housing is the largest expenditure item in the budget of
most families and individuals. Average: 25 %, Poor and
Near Poor 50 %)

5. Issue 1: Low Affordability
 Barriers for accessing housing mortgage: only 18
percent of the housing buyers in Indonesia used
housing mortgage, Why?
 Short tenor housing mortgage  high installment. Lack
availability of long-term financing in market. Does Secondary
Market Facility work well?

6. 2nd Issue : Low Quality Housing
 A 95 percent of low-income households living in
houses that have low quality of wall, roof, and floor
 vulnerable to disaster
 Only 25 percent of low-income households have
access to protected drinking water sources.
 About 73.5 percent low-income households are
serviced by communal sanitation facility and no
facility.  spreading diseases  economic loss: IDR
56,000 billion (USD 6.3 billion) per year

7. 2nd Issue : Low Quality Housing
 28.6 % of low-income households living in housing
with occupancy area per capita less than 7.2 m2
(overcrowded housing) (five million low-income
households)
 About 1.37 % slum area growth per year, from
54.000 ha (2004) to 57.800 ha (2009). (still
debatable)
 Overcrowded housing leads to several impacts on
health and child education, affordability leads to
overcrowded housing

8. Comparison Between Poor, Near Poor, And
Very Poor
Physical Housing Condition Access to Sanitation and Water Supply
100 100
80
80
Peercentage
60
Percentage
60
40
Near Poor Near Poor
40 20
Poor Poor
0
20 Very Poor Communal Facility Unprotected Very Poor
Source
0
Access to Access to
Low Quality Low Quality Low Quality
Adequate Adequate Drinking
Floor Type Wall Type Roof Type Sanitation (B3P04) Water Sources
(B3P02) (B3P03) (B3P15) (B3P05)
Home Ownership Occupancy Area per Capita
100 100
80
80
60
Near Poor 60 Near Poor
40
Poor Poor
40
20 Very Poor Very Poor
20
-
Own Housing Rental Other
Housing -
Home Ownership (B3P14) Occupancy Area (Houseden) ≤ 7.2 m2

9. Market Failure or Government
Failure or both?
 Market failure: housing price overshooting, slow
delivery of new housing, under supply of affordable
housing, capital market imperfection, and low
quality housing (slum area).
 Government failure: a source of problem related to
housing provision, occurs when a policy intervention
leads to a deepening of a market failure and even
worse, a new failure may arise.

10. Common Problem and Solution (Mayo)
Common Common Criticism Suggestion
Problem Solutions
1. Shortage Government  Wrong solution  Mitigate or
of housing provides  Housing shortage is remove market
housing the impact of fast imperfections.
growth in demand
and impediments to
the supply of housing
 Governments cannot
respond to demand
faster or more
efficient than private
markets.

11. Common Common Criticism Suggestion
Problem Solutions
2. Poor Raise standards  Often wrong solution.  Standards and
quality of through stricter  Standards enforced codes should
housing building codes by the governments focus on basic
and better usually have little to requirements
enforcement. do with basic for safety and
structural safety and health.
hygiene.  Since housing
 The standards related quality
to safety and public improvements
health can work only will come as
in integrated and development
comprehensive action proceeds and
in entire population. incomes rise,
providing
regulations
cannot actually
work.

12. Common Common Criticism Suggestion
Problem Solutions
3. Too Clear the squatter  For many reasons  Slum housing
many areas. this can be the wrong represents a large
squatters solution. part of the poor's
 Many poor people capital stock
live on public or  Destroying capital
private land, is not a good
contravening land prescription for
use controls and development.
similar laws.  Informal housing is
 When people are sometimes of
moved off land, surprisingly high
they go to quality.
somewhere else.  Policies adopted to
improve
conditions are
cheaper than
clearance of
squatter programs

13. Common Common Criticism Suggestion
Problem Solutions
4. High price Control rents  Wrong solution.  Dealing directly
of housing and the price of  When housing prices with the causes of
land and rise faster than prices rising costs, rather
building in general, it is a than try to shift
materials. signal to the market to the burden of
produce more housing adjustment to
relative to other goods landlords.
and services.  Any restriction on
 Such price increases landlords will
are transitory unless reduce the
the market is quantity of
prevented from housing and land
adjusting because of for rent.
shortages of
inputs, excessive
government
regulation, and
similar restrictions

14. Jenis Kumuh dan Penanganannya (1)
Jenis Karakteristik Solusi
1. Kumuh ilegal (Squatters) : 1. Menempati lahan secara 1. Direlokasi off-site:
Kumuh Nikmat (Kumat) dan ilegal (bedeng di lahan penyediaan social housing
kumuh miskin (Kumis)
kosong, bantaran rel (rusunawa, rumah
kereta, dll. singgah, dll.)
2. Beberapa di antaranya 2. Direlokasi on-site ?????
memiliki rumah di
kampung, efisiensi
pengeluaran
3. Beberapa di antaranya
hidup menggelandang
(stateless??)
4. Infrastruktur tidak layak,
5. Permasalahan sosial yang
tinggi
6. Seringkali membahayakan
dirinya dan publik

15. Jenis Kumuh dan Penanganannya (2)
Jenis Karakteristik Solusi
2. Kumuh legal (Kumuh 1. Menempati lahan milik 1. Upgrading
salah urus /Kurus) sendiri 2. Urban renewal, land
2. Rendahnye kemampuan consolidation (perlu social
pemeliharaan engineering dan trust
3. Tidak didukung dengan yang kuat)
infrastruktur yang layak 3. Perlu mekanisme kegiatan
4. Site plan tidak beraturan dan pendanaan khusus
5. Kepadatan tinggi
6. Beberapa tidak memiliki
bukti kepemilikan tanah
7. Seringkali memiliki
permasalahan sosial yang
tinggi (kriminal dll.)
8. Seringkali membahayakan
diri dan publik

16. Lesson Learned
 Berdasarkan pengalaman bahwa KITA BISA (MHT,
REKOMPAK, dll.)
 Pemerintah memiliki kapasitas untuk bekerja sama
langsung dengan masyarakat (from top-down and
community driven approach to partnership approach)
 Perlunya pembagian peran dan tanggung jawab yang
jelas di semua tahapan proses
 Masyarakat punya kemampuan untuk bergotong royong
memecahkan masalah huniannya secara komunal
 Merumahkan orang tidak hanya sebatas fisik rumah
namun juga terkait sosial ekonominya

17. Conclusion and Recommendation
 Good policy is better than excessive regulation in
order to deliver more affordable housing. The
government should formulize good policy as a first step of
solution rather than providing more budget to produce
housing that can be delivered by the private sectors.
 The government role as a “provider” should be changed
to be “enabler”. Low-income housing market should be
analyzed carefully before intervening the market.
 Since informal workers is a majority households in
Indonesia, the government should design housing
financial system that can be easily accessed by the
informal workers.

18. Conclusion and Recommendation
 Emphasizing adequate drinking water and sanitation
provision as one of the mainstreams  to reduce households
expenditures, to reduce negative externalities that may cause
larger damage to the entire population.
 Providing improved water supply can reduces diarrhea
morbidity by 21% and providing improved sanitation can
reduce diarrhea morbidity by 37.5%.
 Spending more public budget in water and sanitation
infrastructure may not attract policy makers. The policy
makers and politician may be more interested to spend
budget in the sectors that will generate quick yielding impacts
to the economy such as road transportation.

19. Conclusion and Recommendation
 Building code enforcement and public campaign
about housing safety are necessary to protect the
households from disaster and to reduce negative
impacts of overcrowded housing.
 Unlike water supply and sanitation funded by the
public budget, improving the construction quality
and living space would be costly for the households.
Consequently, the government should invest public
budget for research and development to find out
cheaper and durable housing materials as well as
construction technology.

20. Next Step
 Strengthening national and local government
capacity  Housing Task Force
 Slum Alleviation Policy and Action Plan (SAPOLA)
 Neighborhood Upgrading and Shelter Sector Project
(NUSSP)
 Forming National Housing Authority?