Four Things Jakarta Should Consider Regarding Housing Policy

August 16, 2021

Jakarta will still attract many people to work and settle down. This condition should also be a reference for the DKI Jakarta Government to establish a housing policy that will be able to accommodate these migrants.
The number of Indonesian labor force will increase by 8.69 million people until 2021. In May 2021 the number reached 139.81 million people and increased to 148.5 million in 2025. This is a number that deserves the government's attention regarding its housing policy, especially in Jakarta, which is a favorite destination for young workers.

At least, there are four factors that the government needs to consider to formulate the housing policy. The three are:

1.Jakarta will always have new residents

Jakarta with its facilities and infrastructure will remain a magnet for urbanization. The United Nations, through the Department of Economic and Social Affairs Population Dynamics, stated that 56% of Indonesia's population lived in cities in 2020. By 2050, the number will increase to 73%. This means that more people will live in cities and the demand for housing will also increase.

2.Young people need a variety of housing options

Talking about young people (Millennials and Gen Z) means talking about keywords: fast, simple, flexible and strategically located.

Young people like everything fast and simple. Many also prioritize experiences over symbols of achievement such as owning a house as an asset.

The mindset of today's youth has also changed from what their parents understood. Home ownership is no longer the main and only goal. Many of them choose to seek out as many experiences as possible by moving workplaces, relocating, and studying abroad.

Housing variations should consider young people's lifestyles from size, location, to ownership status. Owner-occupied housing requires the owner to stay for a long period of time. In fact, many young people today choose to be nomadic and work by moving from one city to another.
city.

That is why, the government should start taking into account the provision of housing with rental rights status with a flexible rental period.

3.Increasing housing supply means optimal space utilization

The land area in Jakarta cannot be increased. This limitation makes the price of landed houses continue to rise and become unaffordable. Optimization of space utilization in the form of vertical residential development is absolutely necessary. Government intervention in the form of providing vertical housing needs to be built in many locations. The development can be done in various ways ranging from purely government work to cooperation with the private sector.

Much of the government land in Jakarta is not maximally utilized. The market, for example, only functions as a market. In fact, on the same land, vertical housing can be built at the top of the market. Government cooperation with developers can realize housing for young people.

4.Making bank loan facilities accessible to more people

Intervention from the government in the form of attractive financial policies for home ownership schemes is needed, especially for millennials. Lowering loan interest rates for the Home Ownership Credit segment is one of them. This is because the basic interest rate is high and makes it more difficult for young people to participate in the property market. Extended loan tenors and low down payments also increase the opportunity for people to participate in the property market.

These three methods have been applied to consumer goods. The same method can also be applied to the property market. Because the transaction value is definitely large, the role and involvement of the government through financial policies is absolutely necessary in the property market.

Jakarta cannot possibly limit migrants. Jakarta attracts a lot of talent and skills. The gathering of these resources will also benefit the city. It is only right that the city also provides affordable housing for its citizens.

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