TERM PAPER:

Indonesia Housing Policy

By: Dewi Ratih Megawati (2013311141)

Submitted to: Kyunghee University Housing & Interior Department Statistical Analyisis Course June 19, 2013 Seoul Prof. Hyunjeong Lee

Glossary

PERUMNAS GBHN Undang-undang KTM (Kapling Tanah Matang) Rumah Sederhana (RS) Rumah Sangat Sederhana (RSS) SK (Surat Keputusan) Rumah Sederhana Sehat (RSH)

: state-owned Housing Corporation/ Public Housing Corporation : General State Guidance : Act/Law : Mature Land Plot : Simple Free Standing House : Very Simple Free Standing House : Decree : Healthy Simple Free Standing House : Association of Indonesian Simple-House and Very-

APERSI (Asosiasi Pengembang Rumah Sederhana/Sangat Sederhana Indonesia) Simple-House Developer

(DPGP) Dinas Perumahan dan Gedung Pemerintahan Pemerintah Provinsi DKI Jakarta: Jakarta Housing and Building Agency Rusunami Ministerial Decree KPR : Low cost multi-storey owned house : Peraturan Menteri : Mortgage Loan

INDONESIA HOUSING POLICY

Content

I. Introduction

II. Literature Review Facts on Indonesia 1. Generational Information on Indonesia 1.1 Politics 1.2 Economy [GDP, income] 1.3 Socio-demography and culture [Population, demographic, religion, ethnic]

2. National Policy Development 1) Pre-Independence 2) Old-Order 3) New-Order 4) Post-reform

III. Housing System in Indonesia 1. Housing Policy [Key Player, Priority, Big Policy, Provide by Public Housing] 1) Public programs for housing supply 2) Newtown development -background and history -scope area and border -list and profile -developer and supporting actor -population 2. Housing Market 3. Finance

IV. Conclusion

References

Indonesia Housing Policy

Dewi Ratih Megawati 1st Semester Kyunghee Housing & Interior Graduate Program Housing and Policy - 446241

I.

Introduction

Bappenas (State Ministry of National Development Planning) states that Indonesia blessed with large amount of natural resources, the geographical location, its advantageous demographic structure, its diverse and distinct cultural resources, and its human resources promote the unlimited potential and creativity. Indonesia has conquer the challenge in converting crises into opportunity, The basic human right to psychologically and physically live in peace in housing and settlement, along with obtaining healthy and proper life is guaranteed for Indonesian citizen stated in 1945 Indonesian Constitution, article 28-H. Throughout the years, housing system constantly develop as the result of housing policy changes and demographic fluctuation. The first part of this paper will discuss about the Indonesian socio-economic situation in general which briefly bridge as the background of the Indonesian Housing Policy development. The Indonesian socio-economic and political status, demographic and priority goal in every nation regime stages will be examined. The following part will focus on Indonesian housing system. This section will explain the Indonesia housing policy system, housing market, and also housing finance. In the end, this paper will concludes by underlining the recent Indonesian housing policy along with the implementation.

II.

Literature Review: Facts on Indonesia

2.1 Geographic Indonesia is a developing country in South East Asian which has 17.508 islands in total. It is classified as archipelagic nation which the sea total area is 5 million square meter. Indonesia is also maritime country since the sea total area is four times larger than its land. From those islands only 6000 islands are inhabited. Indonesia has several countries as the neighbor, such as Malaysia in the North, Papua Guinea in East and Australia and East Timor as the nations in South border. Indonesia mass land area is 1.919.44 square meter which is rank 17th among the nations.

Indonesia consist of five main island (Sumatera, Borneo, Celebs, Java and

Papua), two major archipelagos (Nusa Tenggara and the Maluku Islands), and sixty smaller archipelagos. This country is located between the Indian and Pasific ocean. Moreover in the term of maritime border, Indonesia shares it with several countries such as Singapore,

Malaysia, the Philippines, and Palau to the north, and with Australia to the south.

2.2 Politic Indonesia government type is presidential while the governments framework is Presidential Representative Democratic Republic. Therefore the president has two roles as states chief as well as the head of the government. This country conducts a democratic and multi-party system. Indonesia democratics system refers to Trias Politicas where the legislative, executive and judicial powers are divided into three parts. The legislative power is sheltered by the Peoples Consultative Assembly (MPR) which comprises of two houses which named House of representative (DPR) run by representative s of political parties and the Regional Representatives Council (DPD) consist of every Indonesian provinces representatives. Each region is able to send four delegates which are elected by their citizen.

Source : Wikipedia

Constitutional framework Indonesias present Constitution, called Undang-undang Dasar 1945 (UUD), has been gradually amended by the elected MPR (People Consultative Assembly). There have been many significant changes related to the role and authority of government bodies (UNESCAP). Politics of Indonesia takes place in a framework of a presidential representative democratic republic, whereby the President of Indonesia is both head of state and head of government, and of a multi-party system(wikipedia)

2.3 Economy [GDP, income] GDP & Income

After the 2008-2009 global crises, Indonesia manages to deliver excellent economic performance through the macroeconomic indicators. According to the World Bank, on March 2013 the countrys economy baseline outlook for growth is expected to be 6.2 percent in 2013 and rise up into 6.5 percent in 2014. The countrys gross national income per capita has constantly inclined from 2200 USD into 3563 USD during the year 2000 and 2013. In term of macroeconomic stability, Indonesia has successfully obtained the fiscal targets, since Debt-to-GDP ratio decline from 61 percent in 2003 to 24 percent in 2012. The diagram below shows that Indonesia successfully reaches the highest GDP annual growth rate in 2011. The GDP growth shows a significant incline during 2009-2011, although the trend displays a slight decline and slower growth since 2011. Indonesia GDP Annual Growth Rate

Source: Inflation.eu

Out of a population of 234 million, more than 32 million Indonesians currently live below the poverty line and approximately half of all households remain clustered around the national poverty line set at 200,262 rupiahs per month ($22). Employment growth has been slower than population growth. Public services remain inadequate by middle income standards. Indonesia is also doing poorly in a number of health and infrastructure related indicators, and as a result, may fail to reach some Millennium Development Goals (MDG) targets (Worldbank, 2013) Indonesia classified as lower Middle Income Country (MIC) since has already obtained the politic and macroeconomic stability. In 2009, the unemployment rate is decrease from 11% in 2005 into 8%. This achievement successfully put Indonesia in the 111 rank from 177 countries in the 2009 Global Development Report and ranks 54 out of 133 countries in the term old global effectiveness report ranked.

2.4 Socio-demographic and Culture In the term of total number of inhabitants, Indonesia ranks fourth as the world most populous nation after China, United State of America and India. Indonesia's population, as of July 2013, is estimated to be 251,160,124 (CIA world book). The Indonesian population continuously grows at rate of 0.99% in the year 2013. The total population density according UN Data is 125.5 per square kilometer. Until year of 2010, 132,941,000 people live in Java Island which means with 1,071 density rates, it is the densest island in the world. Indonesias population comprises more than 300 different ethnic groups. According to Suryadinata the five biggest major ethnic groups in Indonesia are Javanese, Betawi, Sundanese, Chinese, and Batak. While according to BPS 2010 census, the top five major ethnic groups are Javanese 40.6%, Sundanese 15%, Madurese 3.3%, Minangkabau 2.7%, Betawi 2.4%. Although Indonesia has quite large land area, but there is unbalance population distribution throughout the province and lands. The densest city in Indonesia is Jakarta with 9.121 million population followed by Surabaya and Bandung which respectively has 2.509 million and 2.412 million population. According to UN data approximately 50.4% citizen resides in urban area. Between 2010 and 2015 the population grows at the rate of 1, while the urban population growth rate is at 2.5%. Table: Ethnic Group Composition
Ethnic Group Javanese Betawi Sundanese Chinese Number 2.927.340 2.301.587 1.271.531 460.002 Percentage 35,16 27,65 15,27 5,53

Batak Minangkabau Malay Buginese Madurese Bantenese Bajarese Others Total

300.562 264.639 134.477 49.426 47.055 20.582 7.977 539.529 8.324.707

3,61 3,18 1,62 0,59 0,57 0,25 0,1 6,48 100,01

Source: Suryadinata Indonesia median age in total is 28.5 years while the males median age is 28 year and female is 29.1 years. In this country, the men to women sex ratio are 1.05 at birth and1.04 under 15 years. Moreover the sex ratio for 15-64 years and more than 65 years are 1.01 and 0.78. While for the total sex ratio men to women is 1:1. According to 2000 year census, Islam are the majority religion in Indonesia(86.1%), While the rest of the Indonesia population practice Protestant(5.7%), Roman Catholic(3%), Hindu(1.8%), and the other or unspecified 3.4%.

National Policy Development The first initiative of Indonesian government to integrate and give more control to housing system

is the run of Public housing Congress in 1950. This meeting successfully encourages the President to support the housing-supply strategy and Housing Corporation Organization in every province in Indonesia. The next two years, a Public Housing Agency (JPR) was established to activate housing research, policy development and technical guidance, and to promote housing-finance system (UNCHS, 1993). A regional Housing Centre was founded I 1955 in Bandung, in cooperation with ESCAP, to conduct housing research. Moreover, a Housing Board is developed by the future Minister for Public Works and Energy, to reinforce a housing-finance system. The housing board supports the establishment of Housing Bank Foundations (YKPs) in every large city (kotamadya) in the country to construct a national housing mortgage loan system.

Indonesia has formulated a long-term development plan which spans from 2005 to 2025. It is segmented into 5-year medium-term plans, each with different development priorities. The current medium-term development plan covering 2009-2014 is the second phase and focuses on: promoting quality of human resources, development of science and technology, strengthening economic competitiveness.

Hoek-Smite explain that there is still no integrated housing policy framework in the Indonesias political and strategy development transformation. The 1992 Housing Act does not reflect the basic development and decentralization changes and needs to be adjusted. The following table shows the important milestone every government era.

-Pre-Independence (before 1945) One of the earliest attention draws to the national housing start with the report that is written in 1918 by major of Semarang de Jongh. His report describes a broad perspective about housing in third world countries. He reflects that government need to deliver loans and grants to municipalities, the essential to maintain the prices low by means of municipal ownership of land, the taxation of land rather than buildings. De Jongh not only wrote about the housing financial and social issue but also explore housing issue in construction aspects and town-planning design. He argued that ideal housing has also concern about the setback lines, water supply, traffic regulation, public transport access, accessibility and also drainage.

The next milestone of housing policy development before the independence era is the run of First National Housing Congress in Semarang. This congress brainstorm public housing from the view of hygiene, town-planning, technology, architecture, the law, and the politics. The final report along with the recommendation is forwarded to the governor general and could affluent the authorities in putting housing issue as essential agenda. This first housing congress directs the society and government to the better view of housing issue. Several suggestions are likely to be same with the issue that de Jongh point out in his report of 1918. The recommendation is to establish national housing law, shift in the expropriation law, and higher level right to the cities for land.

The government builds a public health service with subsection for public housing. Then in 1925 Karsten suggest the Society to conduct the second Housing Congress which raises the Kampung neighborhood issues and also the ownership and house construction. This second congress explores the issues which has been stated in the first congress and written in the de Jongh report, but in the more-in depth description. The recommendation as the outcome much more is similar which concern about the local society perspective in composing housing policy. This recommendation partially impacts the kampong improvement and hugely contributes to other affairs which are ownership versus renting, provision of building materials, construction method, and the European standard to native influence. It also accentuates the essential role of the government and the leadership which the central authorities should serve.

Freek colombijn argued that in 1945, the end of colonialism did not practically stop the current housing crisis. The Indonesian government started to manage the crisis by rent control, allocation extant housing, damaged urban quarters restoration, and the Kebayoran Baru area planning at the Southern part of Jakarta as new town development. These strategies are structured as the reaction of the Indonesia 1940s housing scarcity.

-Old Order (1945-1966) This pasca independence era is led by the Indonesian very first president and Indonesian founding father which is known as President Soekarno. There is no drastic economic development due to the President Soekarnos formula and national policy. The acknowledged housing program in this era is only the development of Kebayoran Baru as the new town in Jakarta (Harun, 2011). Indonesia was in the attempt to leave the massive chaos and destruction of the Japanese occupation and the war for independence (1945-1949), while also slowly recovered from the 1930 crisis. Touwen in 2010 mentioned that Indonesia experiences insignificant growth from 1949 to 1965, mainly during the 1950-1957. During the 1958-1965, there was a stagnant growth since the political instability and insufficient economic policy measure. In the old order era, democracy was still a debate since there is conflict of interest between the president, the army and the communist party as well as the other political groups. The economic development was deteriorating due to foreign capital unavailability, which impact to import-export rate and exchange rate. President Soekarno terminates the entire contract which relate with the foreign capital in the private control due to his strong nationalism and the independence euphoria. He believed that everything relate with the represent the western paradigm and culture will harm the meaning of independence. It is strongly because Netherland occupy Indonesia for the past 350 years was part of the Allies. This anti-westernization not only expressed in his economic policy but also the infrastructure development. President Soekarno was ambitious to build the gigantic Jakarta monument symbol (Monas) and also the Senayan Sport Stadium (Gelora Bung Karno) although the very basic needs which is housing for the public is not yet fulfilled. Indonesia also after the independence has not established the education system yet which lead to the local scholar and skilled worker shortage. Geertz explain that the traditional trading patterns, capital deficiency, unskilled and less discipline labor, the According to Ansori, Indonesia made milestone beginning the era of modern history in 1945, the year when the 350 years of Dutch colonialism ends. The pre-liberalization era occur several years after the independence. Geertz suggested that the traditional trading patterns, lack of capital, unskilled and less disciplined labor, the inefficient of markets prevent the emergence of middle income. This independence opens the opportunity and provides better quality of life as well as to create the middle-class jobs. In this era the formal sector of housing provision is still not well developed. On the

other hand, the attemnt is mainly to build the affordable housing for the society. Moreover, in 1952 Yayasan Kas Pembangunan Perumahan Rakyat (YKP) or Institution of Citizens Housing Development funds is established. This institution is the first government organization which has mission to provide lower price-compare to market housing for the low income people. Dahmono explain in 1960 that YKP has successfully construct 13.120 dwelling until it is stopped due to the high rate of inflation. The government then continues by establishing the Building Research Institute which later transform into the UN Regional Housing Centre in 1955. Yudohusodo argues that The Housing Center greatly contribute escpecially in conducting research about simple and affordable housing in different locations, part of the housing is for the government official. Moreover, this research center also did intensive study which outcomes is housing construction standard. Poerbo and Katrtahardja stated in 1979 that this standard was utilised by the PERUMNAS (the Public Housing Corpotance) to develop the early mass affordable housing for the needy people. -New Order (19661998) The new order is also named as New Economic Order, marked with the president position transition from Soekarno to Soeharto. This era marked by the blooming of Indonesian middle income society as a result of the New Order economic modernization and globalization policies. New Order Era put emphasis into and prioritizes the economic development as a mission. In the process, the government reflects on the Development Trilogy as national motto which comprise of the stability, growth and stability. Therefore, the new order administration attempts in forming the rapid economic growth and export-led industrialization as the main theme.

Since the year 1960 the rural population is decreasing since the nation development strategy in which put emphasis in industry development. Although agriculture sector is one of the main agenda in GBHN(Garis Besar Haluan Negara) Main Guidelines of State operation, but the main economic drive is the industry sector.

The 1980 is perceived as milestones when Indonesia experiences the drastic transformation of economic development reflected by the strong import-export activity and the peak number of GDP per capita. Elias and Noone explain in the end of 1980s Indonesian government apply the deregulation and the trade liberation policies. This approach expresses the regime openness to the global world and the support of the economy acceleration. Takshi Shiraishi also stated that in 19871997, the Indonesian middle class emerge as it is the economic boom.

-REPELITA The new order government set up long term development planning (1963-1993) which is divided again into six mid-term planning developments. The mid-term development planning is called Pelita which is acronym of Pembangunan Lima Tahun (Five Years Development Program). Each of this mi-term planning has its own development priority. The detailed priority of each planning are explained in the table below. Table: Priority of Repelita Phase
Repelita I (1969 1974) Repelita II (1974 1979)

Priority
Aiming to fulfill the peoples basic needs and to provide infrastructure with agriculture-focus development. Aiming to increase the other island of Jawa, Bali and Madura, one of the methods is trough promoting transmigration.

Repelita III (1979 1984) Repelita IV (1984 1989) Repelita V (1989 1994)
Source: lib.lhu.edu.vn/

Labor-intensive industry in order to increase the nation export number. Aiming to create new job and industry development. emphasizing in transportation, communication education development.

Pelita I (1968~1972) That time is the era of gearing up to launch the mass housing production. The priority of this period was in leading the work of housing construction technology and engineering (Directorate General of Housing and Settlement, 2011). The government planned and held the First Housing Worksop in 1972.

Pelita II (1973~1977) was the era where the mass production of the low cost housing is started to be operated in the site and service program. Despite the government main focus of housing development is still in the Kampung Rehabilitation Program and village house restoration, finally several influential new institutions such as the PERUMNAS and Housing Policy Board is established in this period of time to support the affordable mass housing provision.

Pelita III (1978~1982) has priority in self- supporting in the agriculture sectors. The average number of the low income housing unit was about 39,000 units per year. There are significant rise during the Pelita IV (1983~1987) of the affordable mass housing 69,000 units per year (Directorate General of Housing and Settlement, 2001). In this period, the government took the private sector as partner involving to prove the low income mass housing for the lower income society. Pelita V (1988~1992) approximately 48,000 low-cost housing units per year is developed (Directorate General of Housing and Settlement, 2001). The concept of Rumah Sangat Sederhana (RSS) or Very Simple Free Standing House was developed in the fourth year of this period.

-Post Reform This 1998 Reform era is also called as post-Soeharto era with the mark of the three decades President Soeharto regime end. In the same time the economic development also went through difficult time which is the impact of Asian economic crisis. The unstable economic and politic atmosphere in Indonesia lead to massive riot broke out in several regions in order to express the societies unsatisfactory. The huge demonstration led by the union of university student drive into the President Soeharto resignation. The following administration is led by President Habibie, a technocrat who only manages the administration from 1998 to 1999. The referendum of East Timor to be a separate independence country from Indonesia resulted into the replacement of Habibie by President Abdurrahman Wahid. The 1997 economic downturn increases the number of poor people as well as weakened the society purchasing power. Around the reform era until around 2001 the housing sector was slowing down which is the consequence of low number of investment.

III.

Housing System In Indonesia

3.1 Housing Policy Public Program for Housing Supply Key Player Housing policy is made to once again protect the netizen in maintai their right to have physically and spiritually propper housing and settlement. The housing and settlement development aim which targeted in GBHN finally has been achieved in 1988. The agenda which are aiming to fulfill the peoples basic need, increase the prosperity rate, and support the economic growth has been actualized trough the first, second, hird, and fouth year of the REPELITA V. In the past four year, the five year development plan acronym by REPELITA strategy successfully create the development-supportive environment for the housing and settlement development. There are several key actor in operating and providing the housing policy in Indonesia. This group of main actor are Ministry of Public Works, Ministry of Public Housing, PERUMNAS (Public Housing Corporation) and the oragnization which unite the Indonesian real estate company called REI (Real Estate Indonesia). PERUMNAS is established in the 1970 and responsible for continuity of a sets of public housing development project. PERUMNASs vission is to become the main provider of housing and settlement in Indonesia by several startegy which are: (1) Providing the housing and settlement taht qualified and valuable to the society; (2) Providing continuous customer satisfaction through excelent service; (3) Developing and empowering teh professionalism also to improve employees welfare; (4) applyong efficient adn

effective company management; (5) Optimizing the synergies with the Government, state enterprises and other institutions. PERUMNAS development coverage area are divided into seven regionals which are displayed on the image below. Image: PERUMNAS regional division

Source: Perumnas

Big Policy -Old Order: In the old order era the government held an Healthy Housing Congress in 1950. One of the outcome required the standard housing to at least has 36 square meter housing floor area with two bedrooms and 17.5 square meter pavillon as addition. There are also some achievement which are gained in this post-indepence era: (1)The forming of Housing Institution(Jawatan Perumahan Rakyat, Yayasan Kas Pembangunan, Lembaga Penelitian Masalah Bangunan, Badan Perancang Perumahan); (2)Kebayoran Baru as the new town in suburb near Jakarta(3)Resettlement scheme acquire the land for development of Jakarta; (4)Housing projects for the government official in the form landed houses

-New Order P1000 Program The P1000 Program is an affordable mass residential construction program in several cities which intends to build different type of housing, ranged from 15 square meters unit to 70 square meters. The construction will use simple but fulfill the building and health requirement. Since this program is conducted in the PELITA I(1968-1972) when the government was just started to build affordable mass housing, there are several problems occurs such as undeveloped technology, inefficient project management, and material supply shortage (Marsono, 1995).

KIP (Kampung Improvement Program) KIP or Kampung Improvement Program a is global well-known program in revitalizing the kampung or usually known as urban vilage. This program has received several review such as UN Habitat and even Aga Khan Award. This program initially launched in 1969 which basically is a self-help community assistance by upgrading and providing the basic need in settlement. According to the Aga Khan report, this community life upgrading program has several aims: (1) to promote the living environment(physical factors) and quality of life (socio-economic consitions) of Jakarta s low income inhabitants; (2) to expand the productive capacity of the residents so that they may be efficietly upgrade their income and contributing in the nation s developement; (3) To bring advantages to the unfortunate class of society in the fastest and teh most efficient way; (4) To reduce the poor s socio-economic lifes hurdles; (5) To stimulate the inhabitants in self help and community cooperation. The self-help assistance is construct in three level of infrastructure development which are paved access roads, bridges and footpaths; water supply, sanitation and drainage canals; schools and health clinics. The infrastructure redevelopment determine to maximise the existing item and to avoid disturbing the existing dwelling. KTM KTM or Kapling Tanah Matang is Indonesia government strategy in PELITA II era to increase the homeownership among more affluent class. The authorities provide one large empty block or plot in the site so that the private developer could provide units for the potential home buyers. Despite the fact that this program has not fully fill the imbalance housing supply and demands gap, according to Presidential State of The Nation Address 1978 and 1983, there were 6000 affordable housing units produced per year.

Law of Public Works The authorities based on the Ministerial Decree No. 20/KPTS/1986 describe a core house for the low income group. Core house is perceived as a residential which consist of one room with at least 12 square meters space potentially receive future development into a complete house units of 36 on a 60 sqm to 200 sqm plot.

RS and RSS Indonesia authorities start to strongly stimulate the private sector developer to produce the low cost housing in order to cover the housing supply shortage. The strategy is to allow the private developer to build less than 36 square meter units due to the affordability issue. This policy is taken in order to increase the housing supply for the lower income category. Integrally, the other policy which is Kapling Siap Bangun (KSB) or known as Ready to Build on Plots Rumah Sederhana (RS) or Simple Free Standing House are presented as the special product for the low income inhabitants. KSB is housing plot or site that allows the residents to renovate the house along with their economic power fluctuation. While RS is a modest house which aims to fulfilled the housing need of lower and middle income groups. The construction detailed guidelines about RS is described in Law of Public Works Ministerial Decree No. 20/KPTS/1986. In this guidance, a core house was perceived as a housing which has single room with 12 square meters minimum area and potentially be developed in the future into a complete house with minimum space of 36 sqm, on a 60 sqm to 200 sqm plot. Referring to Law of Public Works Ministerial Decree No. 54/PRT/1991, RSS housing was described as sets of housing which was constructed with relatively low quality materials in a settlement that completed with integrated infrastructure, public facility, and social amenities. The floor area size of RSS unit is 12 square meter to 36 sqm, with approximately 54 m2 to 200 m2 land area. The distinction between RS and RSS were not based on its floor area but rather based on the allowed maximum selling price

-Reform and Post-Reform: President Megawati in 2003 launcehed the One million Houses(Satu Juta Rumah) Development Program as a respond of the high demand of Housing. The program aim to stimulate local government, private bussiness and communities initiatives, alon g with democratization and decentralization spirit. This One Million Housing program intend to solve the housing shortage issue. This program will be performed based on three basic policies in developping human settlement: (1) to deal with the housing backlog and develop sustainable human settlement improvement trough decentralized leadership, harmonyzing each actors role and function and optimizing their capacity; (2) to collaborate housing and human settlement with the poverty alleviation program, (3) to provide the economic disadvantaged society with poverty reduction, (4) to support the unfortunate people with affordable resourches such as land, basic infrastructure, finance and institution to meet the healthy living.

-Priority As it has bee discussed in the previous paragraph, every regimes has different housing development priority depend on the administration s main agenda. The Soekarno regime is focused on after-collonialialism recovery and still hardly gain the fully independence country which is internationaly admitted. Instead of then focusing on the basic people, the development startegy is to create strong and independent image and avoiding the wetern alliance interfersion. Oppositely, the following regime lead by President Soeharto is focus in creating strong base in every sector of the nation in order to achieving stability and economic development. He strenghten his administration with US graduated Indonesian economist and also gain political advice from various country including China(Master, UNDP). The older legacys accute domestic capital shortage prevent Indonesia s economic to develop. President Soeharto then apply an opposite policy from the Soekarno one. He started with government s budget efficiency by cuting subsidies, decreasing government dept and adjusting the exchange rate mechanism. But the key economic boost strategy is to become open market nation which provide a high degree of foreign investment to occur. The deregulation is operate based on the 1967 Foreign Investment Law. The following essential step is that President Soeharto make a formal visit to several Western Europe country and Japan as well. This diplomacy successfully gain a set of foreign investment sich as Freeport Sulphur company and International Nickel Company. The growing number of foreign investment promoted the national macroeconomic growth. This stable economic atmosphere plus the industry-friendly policy stimulate the booming of affluent private company and also developper in since the end of 1960.

Table: Legal Framework after the reform era No. 1 2 3 4 5 Legal Framework
Law of Public Works Ministrial Decree No. 05/PRT/M/2007 Law of Public Works Ministerial Decree No. 54/PRT/1991 Law of Public Housing Ministerial Decree No: 7/PERMEN/M/2007 Government Law No. 31 Tahun 2007 Government Law No. 20/ 2011 Technical Guideline in Low Cost Landed Housing (RSS) housing and settlement provision with housing subsidy assistance by providing Mortgage Loan Rusunami (Low cost multi-storey owned house) rusun (low cost multi storey housing)

Content
Technical Guideline in Low Cost Multi-Storey Housing Construction

Source: Pandelaki, 2010

-Recent Housing Policy Issue National According to the KSNPP (Kebijakan & Strategi Nasional Perumahan Permukiman or National Policy and Strategy on Housing and Human Settlement) in 2002, 1.15 million dwelling is mandatory to be provided in order to resolve the yearly housing demand issue due to the rapid population growth and to respond to the existing backlog until year 2020. Several policies have been launched in order to become solution of the housing shortage issue (Pandelaki, 2010). In order to dealing with the excessive land price issue, Indonesia government produce a set of program such as the Kawasan Siap Bangun (KASIBA) or Ready to Build On Area program, and Lingkungan Siap Bangun (LISIBA) or Ready to Build On Site program. According to the KSNPP, large scale housing development will be connected and managed in KASIBA which is already coordinated by the local government in specific locations.

Regional Jokowi as the new progressive major in Jakarta Capital City brings several innovative policy in order to promote the better quality and equality of the citizens daily life. Jakartas population is expected to drastically incline to 12.5 million people by 2030, according to a city spatial-planning study, compared to a 2010 census count of 9.5 million residents. That would mean a 25 percent increase in dwellers. To cover the Jakarta 70.000 unit per year housing demand, the governor suggest several public-oriented program called kampung deret and kampung revitalization. Kampung Deret is the program name for multi storey housing which expectedly to be built in the Ciliwung river banks.

3.1.2 Newtown Development -Background and History Jakarta as the capital city of Indonesia is a strong magnet for the population to migrate and live in order to gain their economical power. Jakarta display the city of hope for getting more prospectous job since 1950. Every year the migrant who reside to Jakarta is estimated Deden Rukmana in 2007 explain that Jakarta is the largerst megapolitan city in the South East Asian Scale. The advanced infrastructure development and the conomic blooming attracts peopke from outside Jakarta to reside in. The total population rises a hundred times from 100.000 in 1900 to nine million in 1995 in the past 20th century.

- Area Scope and Border Jakarta as the capital city of Indonesia is integrated with satelite town in the town outer periphery which is called JMA (Jakarta Metropolitan Area). JMA consist of Jakarta and the neigboured area such as Bekasi, Tanggerang, and Depok, abbreviated as Jabotabek. The population in 2000 reach

the 21 million which is comprised of 80 percent urban population and 20 percent rural population. The area which has inhabitant is estimately 6400 sqare metre. JMA population si 10 percent of Indoensia total netizen although they inhabitant only in 0.3 percent of Indonesia total area. McGee in 1994 predict that the total population JMA in 2020 will be 40 mmillion in total.

Image Jakarta Metroplitan Area

Source: Firman In order to respond the rapid population growth and urbanization, the new town in the Jakarta and the satelite city is developed. There are several objectives that base on the developper view: (1). The increasing demand of consumer to live in the peacefull, modern, safe, healthy and comfortable environment; (2) To provide the people with the chance to invest; (3) To obtain relatively huge and fast profits. New Town Developemnt in JMA

Source: Firman

-List, Population, and Profile No. City Population 1 Jakarta 9.607.787 2 Tanggerang 1.798.601 3 Bogor 950.334 4 Depok 1.738.570 5 Bekasi 2.334.871 Source: Wikipedia, BPS

Area 740.30 km2 164.54 km2 118.50 km2 200,29 km2 210.49 km2

Due to the overcrowding in Jakarta, the cities which are located in the border also classified high dense town. These cities in average have more than 900.000 residents living their live there. The new town development in these areas is essential to balance the aggressive urban population growth. The previous farm land in the Jakarta city belt is transformed into new town construction area. Firman mentioned that the developers are successfully creates 30 large new town until 2000 in the JMA, which area size is at least 500 ha. The lands in these areas are predictably more affordable and are not populated as Jakarta down town area.

The periphery of Jakarta mainy depend to the Jakarta central city, Botadebek is called as bedroom suburb for thee the daily commuters of Jakarta. Jakarta is the megacity which is integrate the government affair, commercial, and entertainment in the same area. The economy and finance system in Jakarta hugely influenced the neigboring district. Kompas mentioned that in daytime total citizen in Jakarta almost twice asn the total in the nighttime. The total citizen who commute everyday is approximately six to seven millions.

-Developer and supporting actor There are four giant private housing developers in Indonesia which are Alam Sutera Realty, Paramount Serpong, Agung Podomoro and Lippo Cikarang. These four groups are owned and run by the private sectors specifically serve the housing need for the middle and upper class in Indonesia. Table below briefly describe the giant developer profile:
Alam Sutera Lippo Karawaci Establishment Time 1993 1990 Activities Property development Construction & infrastructure Property development Construction & infrastructure Asset Management Property development Construction & infrastructure Property development Construction & Infrastructure Property development Construction & infrastructure Concept Life Balance Sustainable, Green, First-Class Environment Building homes and people with heart Harmony, Passion & Conversance, Environmental Conscious A dream home for everyone

Paramount Serpong Agung Podomoro

2006 1969

Ciputera Development

1981

Source: Agung Podomoro, Alam Sutera, Lipo Karawaci, Paramount Serpong, Agung Podomoro

These private developper mainly provide the landed or walk-up formal housing. They recently dominate the market by developping large scale one-stop living residential concept. This one stop living is basically the integration between shopping center and dwelling area. The consumer category is upper middle income class until the high-income society.

Kampung Kampung in the legitimate rural version literally means village. But kampung in the metropolitan city like Jakarta comprise broader definition. Mc Carthy outlined in 2003, that in urban context kampung is a district which lived by the ecomically unfortunate class society. But in the reality, household in kampung could consist of the a mix of lower and lower middle class - even some middle class households - living in mostly permanent construction. Prof. Hadihjah Rahmat in 2013 argued that Kampung authentically inspire the English vocabulary which is result as the word compound. The Kampung vocab is start to be used at Portugese and Dutch in the 1600s and transforming into different type of spellings. Mainly, the spellings results are Campon, Campong, Campond and Kampund. The Campong vocab is used officially in the European colonial town maps such as Portuguese, Dutch and English. Finally, the word Kampung in British means: (1) Campong, where it donates an urban district; (2) Compound, where it donates a cluster of buildings or unit of enclosure consist a one building or more; (3) Kampong which is represent the village. Kampung as Town units In Malaysia the word Kampung substitute units of settlement in both rural and urban contexts . In the urban context, Kampung meant an urban district or its sub-district. These are the ethnic groups & occupied community units that form the character of pre-colonial cities in Southeast Asia (Nusantara). The term was adopted into Portuguese, Dutch and English usage since the 1600s. Similar with Malaysia, Since 1800s the British colonial often apply the term Kampong to alternate the word town in the map in Singapore. Below the 1822 Singapore maps display how the kampong can replace or use together with the word town.

Singapores Town Plan of 1823 by Lt Jackson, showing the structure of Campongs as town units. Annotations by Imran bin Tajudeen Site of Bugis Town in 1822 map by Capt James Franklin, and the new site of Bugis Campong in Jackson Plan 1823. Annotation by Imran bin Tajudeen.

3.3. Housing Market Housing policy is basically is influenced by the housing market and is composed to respond the housing affordability. The diagram below defines the relation between affordability and supplydemand system. Indonesia supply and demand rate is not in the equilibrium. The housing system in Indonesia still cannot cover the demand from this high populated country. The diagram clearly define that there is certain sequence in describing the housing policy production process. The linear process should be started with the demographic changes which impact the market system and ended with the housing policy planning and application. But the housing policy could be seen as continuous cycle where the housing policy is constructed first as the tool for housing problem prevention. Diagram the Critical Context of Housing Policies

1) Supply and demand Since Indonesia population is relatively high in number, how to provide affordable and proper dwelling is still an issue for the public and also the private developer as well. In 2004 the Department of Settlement & Regional Infrastructure warn that Indonesia still need to construct 800.000 dwelling per year in fulfilling the population demand and also responding the rapid population growth. Housing market in Indonesia is blooming again in 2010, after surviving from the economic downturn of 1997-1998. The significant economic development supports the residential housing supply and demand cycle. The increase in business is supported by lower interest rate in financing. Indonesia show better achievement in economic growth compare to the other South East Asian Countries(Malaysia, Philippines, Thailand). In 2011, the association of housing developers (real estate Indonesia REI) target home construction reached 200 thousand units, increase about 10% -15% compared to 2010. The high demand for housing is also consequence of the enormous population growth. The government no longer becomes the main provider of all housing product category due to the rapid population growth. The small size and the luxury size of housing type are mainly provided by the market or private sectors. Approximately 90% of the population will reside in the satellite city around Jakarta, due to the escalated land prices in the down town area. As a respond to the population growth, 2.1 million units houses or apartments are needed to be built in this capital city. The plan is 2.1 million for dwelling comprise of 1.9 million units of landed house and 200 thousand units of vertical housing (Mardanugraha and Margunson, ).

Key role According to UN Habitat report on housing production in 1993 Indonesia public housing sector s role has been transformed, from the main provider into facilitator and enabler. This is obviously stated in the Repelita-V that the responsibility for housing provision has to be taken care individually. The public sector on contrary is responsible to provide the affordable mass housing for the needy people, the government workers, or the army. The more affluent people such as upper middle income and the high income class are perceived economically strong enough to purchase housing from the private market sector.

3.4 Finance Housing business in Indonesia is rose again in 2010, after destroyed by the economic crisis of 1997-1998. Housing business is predicted booming until 2014. High economic growth support residential supply and demand. The increase in business is supported by lower interest rate in financing. Indonesia's economic growth is much better than neighboring countries (Malaysia, Philippines, Thailand). In 2011, the association of housing developers (real estate Indonesia REI) target home construction reached 200 thousand units, increase about 10% -15% compared to 2010.

The high demand for housing is also caused due to the high population growth. For example, population growth in Jakarta, Bogor, Tangerang (around Jakarta) and in 2006 to 2020 is predicted from 8.1 million to 32.6 million. About 90% of the population will be living in the area around Jakarta, since land prices in Jakarta to be very expensive. To accommodate population growth, it takes at least 2.1 million units houses or apartments in Jakarta. The scenario is 2.1 million for homes consist of 1.9 million units of landed house and 200 thousand units of apartments.

IV. Conclusion -Housing policy in national scale The root of Indonesia housing basic issue can be summarized into four issues: (1) Population Size; (2) Population growth; (3) Spatial distribution; and (4) Urbanization. These issues are big challenge for ten government and public sector in balancing the national supply and demand. Housing policy is answer to protect the right of the society to own and live in a proper dwelling and settlement. The housing policy reacts to demographic and market fluctuation. -Housing scale in town-scale Since Indonesia has decentralized government type, how sufficient than housing policy system is developed much depend on the local authorities and also the national market. Jakarta as the capital city has complicated and inter-correlated issue regarding transportation, sustainable environment and

housing-settlement as well. Bringing up solution for the affordability as well as the housing quality for the society should be integrated with the larger scope such as urban and environment context.

Suggestion The government should objective and consistent enough in creating the fair market for both developer and consumer The overlapping interest between the developer is need to be managed by evaluating to maintain or amendment the old regulation The emergence of middle income group should be perceived as opportunity as well as concern in providing the residential adequate number and quality

REFERENCES
Cobban, J. L. (1993). Government Housing Policy in Indonesia 1900-1940. GeoJournal, 29(2), 143-154. Retrieved June 12, 2013 Anderson, H. S. (2011). Motives for Tenure Choice during the Life Cycle: The Importance of Non-Economic Factors and Other Housing Preferences. Taylor and Francis, 28(2), 183-207. Retrieved June 9, 2013, from scopus. Mardanugraha, E., & Mangunsong, F. (n.d.). Fina Report:Housing Policy in Indonesia (Master's thesis). Pandelaki, E. E. (2010). The Core of House Concept and Implementation to Indonesia: Past, Present, Future. , 34(4), 233248 Mc Carthy, P. 2003. Urban Slum Reports: Understanding Jakarta Case. Worldbank. Retrieved June, 13 2013. UN Habitat. 1993. National Trend in Housing Production Practices. Vol:2. Nairobi

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