Indonesia faces the challenge of not only a housing shortage, but also 20% of the country’s housing is considered to be in poor condition. The World Bank estimated that in order to fully meet this housing need, one million units per year are needed. This led to 2015’s One Million Houses initiative, led by the Indonesian Ministry of Public Works and Housing, which is based on three pillars: mortgage-linked down payment assistance, home improvement assistance for low-income families requiring significant home repairs, and technical assistance for reforming housing policy.
This program, which has gotten financial support from the World Bank, has been effective when paired with other policies like the Housing Finance Liquidity Facility – which provides banks engaged in low-income mortgage lending with government subsidies. In 2018, Indonesia exceeded their goal of building one million homes, with half of them constructed through government programs and half funded by private developers.
Source:
Oxford Business Group. (2020)Emerging Markets Strive to Solve Housing Deficits amid Rising Urbanisation. OBG.