By: Aditya Anggara
*) Public Policy Observer
The need for decent and affordable housing remains a major challenge in Indonesia. For low-income communities, access to livable housing is often hindered by various obstacles, ranging from skyrocketing land prices and limited land supply to the affordability of housing credit. In this context, the government’s discourse on providing land subsidies emerges as a highly relevant and pro-people breakthrough. This initiative not only demonstrates the state’s commitment to the underprivileged but also opens a new path for the success of the One Million Houses program and accelerates the resolution of the long-standing housing backlog.
One of the main issues in subsidized housing development is the high cost of land, especially in strategic areas near centers of community activity. Until now, housing subsidies have mostly focused on mortgage financing (KPR) and down payment assistance, while the land cost component has remained untouched. In fact, land can account for more than 40% of the total cost of a house. If land prices can be reduced through subsidies or government intervention, the final house price will automatically become much more affordable for the public.
The Deputy Minister of Housing and Settlement Areas (PKP), Fahri Hamzah, stated that the government is currently focused on providing homes for the people, as millions are still waiting in line to own one. With the land subsidy plan, he believes this method can encourage communities to build homes on the subsidized land. Cheaper land will directly affect house prices, making them more accessible.
This land subsidy discourse is a strategic step with long-term thinking. By subsidizing the land aspect, the government indirectly strengthens the foundation for more equitable and widespread development of affordable housing. It opens greater opportunities for both private and state-owned housing developers to build subsidized homes in more livable and well-connected locations without having to sacrifice profit margins.
Beyond the cost factor, land subsidies can also encourage better spatial planning and housing distribution. With incentives such as subsidized land or even land grants from the central or local government, housing development can be directed toward strategic locations already equipped with basic infrastructure like roads, electricity, clean water, schools, and health facilities. This will reduce construction and transportation costs while improving the quality of life for subsidized housing residents.
Local governments would also be more motivated to play an active role if this land subsidy scheme is realized. The central government can foster collaboration with local administrations to provide state-owned or unproductive land for subsidized housing development. This could even be expanded to include land owned by SOEs or other government institutions that have not been optimally utilized. Through this synergistic scheme, the national housing backlog—currently in the millions—could be addressed more swiftly.
Meanwhile, the President Director of Bank Jateng, Irianto Harko Saputro, stated that as one of the most active and consistent implementing banks of the KPR Sejahtera FLPP (Housing Loan Liquidity Facility) since 2013, Bank Jateng has recorded significant growth in distributing subsidized housing financing. Whether through conventional or sharia schemes, the bank continues to show a positive performance trend in supporting the development of decent and affordable housing for the people.
From a fiscal sustainability standpoint, the land subsidy scheme can be managed through creative approaches. Not all subsidies must be in the form of cash. The government can offer incentives such as exemption from land acquisition fees, reductions in property taxes (PBB), or even long-term land lease schemes at minimal costs. With this approach, the state budget (APBN) remains under control while the benefits of subsidies are still widely felt by the community.
The land subsidy discourse could also strengthen synergy with other programs such as satellite city development, modern transmigration areas, and integration with public mass transportation. If the government provides land near stations, terminals, or transport hubs, citizens not only gain affordable housing but also easier mobility, which directly boosts productivity and quality of life.
Of course, to ensure that this discourse doesn’t remain mere rhetoric, strong commitment is required from all stakeholders—central and local governments, developers, and financial institutions. Regulations must be prepared, governance must be transparent, and oversight systems must function effectively. However, if successfully implemented, land subsidies could be a game changer in the provision of decent housing for all Indonesians.
The government must not merely act as a regulator, but also as a facilitator and enabler in fulfilling citizens’ basic rights. Through land subsidies, the government sends a strong message: every citizen has the right to a proper, safe, and humane place to live. This is a bold step toward a more just and prosperous Indonesia.
