Government Accelerates Realization of Three Million Subsidized Houses, Proof that the State is Present for the People
By: Ricky Rinaldi
The Indonesian government continues to demonstrate its commitment to meeting the basic needs of the community by accelerating the three million subsidized housing program. Under the leadership of President Prabowo Subianto, the state is present not just with promises, but with concrete policies that directly touch the lives of the common people. The subsidized housing program is a strategic part of the national development agenda, which not only targets numbers, but also guarantees the quality of decent, safe, and affordable housing.
President Prabowo recently reaffirmed the direction of the policy. He said that the government has prepared to build 350,000 subsidized housing units by 2025 through the FLPP Home Ownership Credit (KPR) scheme. He also highlighted the importance of maintaining the quality of buildings so that people get livable homes, because according to him, subsidies should not be a reason to lower quality. The President hopes that this program will not only meet quantity, but also become a long-term solution to the people’s housing needs.
The Ministry of Housing and Settlement Areas (PKP), as the spearhead of this program, also fully oversees the direction. PKP Minister Maruarar Sirait, who recently gave a statement to the media, stated that the target of 350,000 subsidized housing units this year is the highest achievement in the history of the FLPP program. He considered this as proof that the government is truly on the side of the common people, and that this program is real work, not just rhetoric. He also proposed that the development target in 2026 be increased to 500,000 units, accompanied by a renovation program for two million uninhabitable houses, as a form of expanding the scope of the policy.
In its implementation, the government relies on cross-sector collaboration. In addition to allocating funds from the APBN, subsidized housing financing is carried out through the FLPP scheme with a 50:50 portion between the government and the banking sector. National banks such as BTN, BSI, and BRI are actively involved in distributing subsidized mortgages with a fixed interest rate of five percent and a tenor of up to twenty years. Bank BTN President Director Nixon LP Napitupulu, in a previous statement explained that his institution is committed to expanding access to financing so that more people, including informal workers, can own homes.
Local governments are also empowered to support this policy, especially in terms of exemption from local taxes and levies. By mid-2025, more than 490 local governments have issued incentive regulations, including exemption from BPHTB and IMB levies. The Minister of Home Affairs emphasized the importance of regional head support for this national program, because it directly concerns the needs of the community and equitable development between regions. Local government support is considered crucial so that the targets set by the central government can be achieved comprehensively.
However, challenges in implementing the program remain. One of the main obstacles is limited land, especially in urban areas. The government estimates that up to 27,000 hectares of new land will be needed to accommodate the construction of large-scale landed houses. To overcome this, the vertical housing strategy has begun to be implemented in large cities. The government is also opening up opportunities for cooperation with foreign investors in the construction of affordable flats, such as those currently being explored with partners from the Middle East.
In terms of supervision, the government involves the Financial and Development Supervisory Agency (BPKP) to monitor budget use and ensure that building quality meets standards. This step is taken to prevent irregularities and ensure that the subsidized housing program is running on target. The government does not want large-scale construction to sacrifice quality or be misused by irresponsible parties. Strict supervision is an integral part of efforts to maintain the integrity of this program.
This subsidized housing program not only has an impact on the provision of housing, but also drives the economy. The construction of hundreds of thousands of houses per year is estimated to create millions of direct and indirect jobs in the construction sector, building material distribution, and financial services. In addition, the property sector, which has been the mainstay of national economic growth, has also been boosted, creating a wide domino effect to the MSME sector and other supporting industries. This program indirectly becomes a stimulus for regional and national economic growth.
In addition, this program also helps overcome the still high national housing backlog. With a housing shortage of around 12 million units, the rapid construction of three million houses is an important and measurable step in reducing this number. On the other hand, with the quality of houses that continues to be improved and locations that are integrated with transportation access and public facilities, subsidized housing is expected to not only be a place to live, but also a center for healthy and productive community growth.
With all these concrete steps, the three million subsidized housing program is a real manifestation of the state’s presence in responding to the basic needs of the people. This policy is not just about numbers, but about dignity. In the midst of global challenges and economic pressures, the state does not remain silent. On the contrary, the government shows that siding with the common people is a main principle that continues to be maintained. Through cross-sector collaboration, transparency, and people-oriented leadership, the government is optimistic that this program will become one of the important foundations in realizing a prosperous, equitable, and socially just Indonesia.
*)Strategic Issues Observer
