Realizing Subsidized Apartments Through Public-Private Collaboration

Efforts to meet the housing shortage(backlog) require policy innovation from the government. The commemoration of World Habitat Day 2020 on October 5 with the theme Housing For All: A better Urban Future is a momentum to immediately solve housing problems in urban areas. Has the government met the housing needs of its citizens?

Earlier this year alone, the Ministry of Public Works and Housing recorded a backlog of 7.64 million units. This figure will continue to grow in the future as the population grows and the labor force increases. The government cannot solve this problem alone, it must work more with the private sector to solve the housing problem.

The local government is indeed trying to meet the housing needs of residents through the simple rental flat (rusunawa) and simple owned flat (rusunami) programs. However, the flat program has not been effectively utilized. The distance of 7 flat locations from the city center is a barrier to people's interest in living there. It would be a shame if the thousands of rusunawa/rusunami units that have been provided are not fully occupied.

From 2014 to 2017 the government built 8 rusunawa locations totaling 2,394 residential units. These flats are located in KS Tubun (Central Jakarta), Rawa Buaya (West Jakarta), Rawa Bebek (North Jakarta), and Cakung Barat, Jatinegara kaum, Jalan Bekasi, Pinus Elok and Marunda (East Jakarta). Of these 8 points, only KS Tubun is close to the city center, which is 7 km from Tugu Monas. The rest are at least 15 km from the city center.

In 2019, the DKI Jakarta Public Housing and Settlement Areas (PRKP) Agency has managed 34 existing flats. In the same year, the government program, namely zero rupiah DP houses, is running. This is a strategic program from the DKI Jakarta government to facilitate residents to meet the needs of livable, comfortable and affordable housing without having to be burdened with a down payment. As part of the zero DP house program, 780 units of phase one rusunami have been built, and 900 units of phase two are being built by Perumda Sarana Jaya. The rusunami is located in Pondok Kelapa, East Jakarta.

In 2020, the construction of rusunawa planned from the previous year has only been running for 10 percent. The target of completing the construction of 10 new flats totaling 5,835 units continues to be extended due to budget uncertainty. Initially, construction was targeted to be completed in 2021. However, if the budget is not available in 2020, it will be completed in 2022.

The uncertainty of the flat construction budget should make the government realize that the housing problem cannot be solved alone. The government needs cooperation with developers.

Developers can be the right collaborators to help the government solve housing problems. The reason is that developers have obligations that must be fulfilled in the form of flat construction. They must fulfill this obligation every time they build a commercial building on a large scale. So far, this obligation has been difficult to fulfill because there is no land readiness from the government. Within the province of DKI Jakarta, the Supreme Audit Agency (BPK) recorded a total of Rp 22 trillion in arrears of developer obligations, while the Regional Asset Management Agency (BPAD) recorded Rp 13 trillion. If this developer obligation is utilized, it will be equivalent to 74 second phase Pulogadung Small Industrial Village (PIK) flats totaling 101,697 units.

While developers build their obligations, the government should play a role in providing land. Unfortunately, the government usually cannot provide land when developers want to fulfill their obligations. In fact, this obligation can be carried out by utilizing land owned by Regional-Owned Enterprises (BUMD) or State-Owned Enterprises (BUMN) that are idle or less than optimal use.

The government can also allow the construction of flats on land that has public crowd appeal, such as terminals, stations and markets. These hotspots can be developed intomixed-use areas to achieve optimal land use effectiveness and efficiency.

The market as a potential land also deserves our attention. Currently, many markets are experiencing a decline. It must be admitted that the market is no longer an inviting destination for shopping, especially for young people. For example, in Johar Baru Market, Central Jakarta, buying and selling activities are only crowded in the morning.

This sluggish market activity needs to be addressed in terms of design and management. It is not impossible if the ground floor continues to function as a market and the upper part is developed as residential. That way, the market function can be supported by the presence of residents as well as consumers, and residences can also be helped by the presence of the market to fulfill their daily needs.

This idea of developing a market as well as a flat has already been realized in Pasar Rumput, South Jakarta, built by the Ministry of Public Works and Housing. Although not free from some obstacles, such as complicated building operations, similar concepts need to be applied to more government land. Among others, by utilizing developer liability funds.

Collaboration between the government and developers is a solution to providing affordable housing in Jakarta as well as accelerating the implementation of developer obligations. With collaboration, the backlog number can be quickly reduced, the housing problem can be quickly resolved. That way this year's World Habitat Day theme, Housing For All: A better Urban Future, we can feel.