The Subsidized Housing Program is a Real Step by the Government to Achieve Affordable Housing
By: Nakula Wijayanto*)
The government has once again demonstrated its strong commitment to improving public welfare through the 3 Million Homes Program, particularly for low-income communities (MBR). This program aims not only to meet basic housing needs but also to stimulate economic growth through job creation and the growth of related industrial sectors. This step demonstrates that the government is not resting on its promises but is actually implementing policies that can be directly felt by the public.
The Minister of Housing and Settlements (MenPKP), Maruarar Sirait (Ara), stated that the construction of subsidized housing is currently showing a positive upward trend and has provided widespread benefits. He stated that the 3 Million Homes Program, as directed by President Prabowo, requires cross-sector synergy, including support from Bank Indonesia. Subsidized housing also contributes to job creation, particularly in the construction sector and supporting industries. Furthermore, informal sector residents, such as small traders, now have a greater opportunity to own decent housing.
Ara praised the quality of the subsidized housing built in the Puri Delta Angsana area. She considered the specifications, such as a 72-square-meter land area, 3.20-meter ceiling height, and neat environmental planning, to be ideal examples of quality subsidized housing. These qualities are crucial to ensuring that subsidized housing is not only affordable but also functionally and aesthetically pleasing. Ara also proposed increasing the subsidy quota to 500,000 units next year. This quota increase is expected to accelerate target achievement and expand the program’s positive impact.
Bank Indonesia (BI) Governor Perry Warjiyo emphasized BI’s commitment to fully supporting public housing financing. BI has prepared liquidity incentives of up to IDR 80 trillion for banks to accelerate the distribution of subsidized mortgages (KPR). In addition, BI purchased IDR 155 trillion worth of Government Securities (SBN), of which approximately IDR 45 trillion was allocated for public housing financing. Perry explained three main reasons for prioritizing public housing: improving public welfare, stimulating economic growth, and creating jobs in the construction sector and its supply chain. This policy demonstrates a strong synergy between monetary instruments and social policies.
Bank Indonesia’s support for the public housing program is part of its strategy to maintain national economic stability while expanding financial inclusion. By streamlining subsidized housing financing, low-income communities have greater access to formal banking services. This is expected to not only help meet housing needs but also strengthen the economic foundations by increasing purchasing power and boosting regional economic activity.
Finance Minister Sri Mulyani Indrawati also emphasized the crucial role of the State Budget (APBN) in supporting the subsidized housing program. Through the Housing Financing Liquidity Facility (FLPP) scheme, the APBN helps provide housing for low-income families (MBR), reduces social disparities, and strengthens equitable development. She emphasized the need for acceleration in the second semester to achieve the annual target. The program’s budget allocation has also increased significantly from IDR 29.1 trillion to IDR 47.4 trillion in 2025, encompassing FLPP, Tapera, SMF, and interest and down payment subsidies.
In terms of fiscal policy, the government is not only focusing on the number of housing units built but also ensuring the sustainability of long-term financing. Budget support is directed at providing interest subsidies to keep home installments affordable for low-income families (MBR). The government is also collaborating with banks and developers to simplify and expedite the mortgage application process. With cross-sector collaboration, this program has significant potential to address the national housing backlog .
In addition to its economic impact, the subsidized housing program also contributes to the creation of healthy and orderly residential environments. Livable housing improves people’s quality of life, from health and education to social security. The government will continue to ensure that subsidized housing meets good building standards and provides access to public facilities such as schools, health centers, and public transportation. Thus, this program not only provides housing but also builds a sustainable living ecosystem for beneficiary families.
Equal access to subsidized housing also helps strengthen social cohesion within a community. When residents have safe and adequate housing, social stability tends to increase, reducing the potential for conflict caused by inequality. Furthermore, equitable development of subsidized housing across various regions stimulates regional economic growth. This creates a multiplier effect that benefits society as a whole.
The government’s hard work in synergizing public housing policies deserves appreciation. The subsidized housing program has proven that policies designed with cross-sector synergy can provide direct benefits to the community. Going forward, with continued increases in quotas and maintained quality, more Indonesian families will have access to decent housing. The hope is that no longer will residents struggle to own their own home. This is a concrete step towards equitable prosperity and social justice throughout Indonesia.
)* The author is a Public Policy Observer
