Govt to pro­vide low-in­come work­ers with ac­cess to hous­ing

The Jakarta Post - - BUSINESS - Farida Su­santy

The gov­ern­ment is set to roll out a mort­gage-linked down pay­ment as­sis­tance (BP2BT) pro­gram to help low-in­come in­for­mal work­ers ac­cess af­ford­able hous­ing next year.

The aid, backed by a US$215 mil­lion loan from the World Bank, will come in the form of a sub­sidy that will be ac­ces­si­ble to ben­e­fi­cia­ries that keep their money with a part­ner bank for half a year.

The Pub­lic Works and Pub­lic Hous­ing Min­istry signed this week agree­ments with five banks, namely state-owned lenders Bank Tabun­gan Ne­gara (BTN) and Bank Rakyat In­done­sia (BRI), prov­ince-owned Bank Pem­ban­gu­nan Daerah Jawa Barat dan Ban­ten (BJB) and PT Bank Pem­ban­gu­nan Daerah Jawa Ten­gah (BPD Jateng) and pri­vate lender Bank Artha Graha, to kick-start the pro­gram.

Cus­tomers will need to save be­tween Rp 2 mil­lion (US$140) and Rp 5 mil­lion for six months in these banks to re­ceive ver­i­fi­ca­tion over mort­gage el­i­gi­bil­ity. Af­ter the banks com­plete the ver­i­fi­ca­tion process, a spe­cial task force in the min­istry will de­ter­mine whether to as­sist the po­ten­tial ben­e­fi­cia­ries.

“All this time, it has been hard for low-in­come in­for­mal work­ers to be seen as bank­able to banks. The act of saving is a re­quire­ment for them to be as­sessed as to whether they are bank­able,” the min­istry’s di­rec­tor general for hous­ing fi­nance, Lana Wi­nayanti, said re­cently.

To ac­cess the sub­sidy for landed houses, cus­tomers across the coun­try must have a com­bined house­hold in­come of Rp 6 mil­lion, with the ex­cep­tion of those in Pa­pua and West Pa­pua, who must earn Rp 6.5 mil­lion.

El­i­gi­ble cus­tomers would en­joy a mort­gage sub­sidy rang­ing from 10 to 40 per­cent of the house price, which hov­ers be­tween Rp 130 mil­lion and Rp 148.5 mil­lion na­tion­wide, ex­cept in Pa­pua and West Pa­pua, where the price can reach up to Rp 205 mil­lion.

A sim­i­lar sub­sidy is also avail­able for flat pur­chases and home re­pair. The gov­ern­ment would cover up to 25 per­cent of hous­ing costs for low-in­come peo­ple, while the rest would be sourced from mort­gages.

Lana said that, by next year, the min­istry would pro­vide 20,500 hous­ing units out of the to­tal tar­get of 125,000 units by 2020 and that it teamed up with banks to iden­tify com­mu­ni­ties com­pris­ing in­for­mal work­ers to fun­nel the sub­sidy.

“[The sub­sidy] is for in­di­vid­u­als. But if they are within a com­mu­nity, it would be eas­ier be­cause they could re­mind each other to make monthly pay­ments,” Lana said.

BRI con­sumer di­rec­tor Han­dayani said the lender would “study the pat­tern” of the new scheme, which is dif­fer­ent than the pre­vail­ing hous­ing loan liq­uid­ity fa­cil­ity (FLPP) scheme, prior to car­ry­ing out the pro­gram start­ing at the end of the first quar­ter of next year.

The FLPP scheme was im­ple­mented to help peo­ple earn­ing less than Rp 4 mil­lion to buy houses. How­ever, it has only been ac­cessed by civil ser­vants, pri­vate work­ers and mem­bers of the In­done­sian Mil­i­tary and the Na­tional Po­lice.

In­done­sia, the world’s fourth most pop­u­lous coun­try with a pop­u­la­tion of more than 260 mil­lion peo­ple, has grap­pled with ris­ing de­mand for af­ford­able hous­ing, see­ing a hous­ing back­log of around 11.4 mil­lion at present.

The gov­ern­ment launched a pro­gram in­tended to build 1 mil­lion houses each year un­til 2019 to ad­dress the is­sue. How­ever, in the past two years, it failed to meet the tar­get, with 699,000 houses built in 2015 and 800,000 houses built last year. It will likely miss the tar­get again this year, as 765,120 hous­ing units have been built as of early De­cem­ber.

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