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INDONESIA’S FUTURE DIRECTIONOF HOUSING POLICIES, PROGRAMS, AND
FINANCING
Ulaanbaatar, June 26-29, 2011
MINISTRY OF HOUSINGTHE REPUBLIC OF INDONESIA
Hetty Adriasih[hetty.adriasih@gmail.com]
Dr. Eko D. Heripoerwanto[herieko123@yahoo.com]
Workshop on Housing Finance
Outline
Law, Regulations and Housing Policy 2010-2014
1 Problems
2
3
4
5
Roadmap Housing Development 2005-2025
Policy Direction
Strengthening the Primary Market
Institutionalizing Liquidity Facilities
6
7
Housing Programs 2010-2014
Problems
Lack of Housing SupplyLack of Housing Supply
Increasing Number of Substandard Housing Units
Increasing Number of Substandard Housing Units
Expanding Slum AreasExpanding Slum Areas
Backlog is expected to increase from 5.8 million units (2000) to 8 million by the end of 2010
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2
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2009 :4,8 million houses in damaged condition with two of three basic structures (wall, floor and roof) in need of repair
2008 :13,8% households still live in dirt floor houses12,4 % live in non-permanent wall houses1,2 % lives in leaf roof houses
200721,1% of houses in Indonesia have no access to clean water8,54% have no electricity22,85% have no access to laterines
The expansion of slum areas reaches 1.37% per yearExpanded slum areas: 54.000 Ha (2004) 57.800 Ha (2009)
1
Only +20% of housing
stocks provided by market
Law, Regulations and Housing Policies 2010-2014
To increase the provision of decent and affordable housings for low income householdsTo increase the provision of decent and affordable housings for low income households
To increase the accessibility of low-income households to decent and affordable housingTo increase the accessibility of low-income households to decent and affordable housing
To improve the quality of human settlement areas through provision of infrastructure, basic facilities and adequate public utilities, integrated with housing development in order to create cities without slums
To improve the quality of human settlement areas through provision of infrastructure, basic facilities and adequate public utilities, integrated with housing development in order to create cities without slums
To strengthen the security of tenure through facilitating pre-land certification and post-land certification for low-income households, as well as standardizing building permit issuance
To strengthen the security of tenure through facilitating pre-land certification and post-land certification for low-income households, as well as standardizing building permit issuance
To promote the quality of planning and its implementation in housing and human settlements development
To promote the quality of planning and its implementation in housing and human settlements developmentTo promote primary housing markets and secondary mortgage finance supported by long-term sustainable financing sources through information dissemination and standardization of mortgages, as well as development of required regulatory support
To promote primary housing markets and secondary mortgage finance supported by long-term sustainable financing sources through information dissemination and standardization of mortgages, as well as development of required regulatory support
1
2
3
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5
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1. REPUBLIC OF INDONESIA’S BASIC CONSTITUTION 1945, Section 28 H, SubSection (1):
“Every people has the rights to have a wealthy life, home and healthy environment as well as the rights to obtain health care.”
2. LAW NUMBER 39 YEAR OF 1999 REGARDING HUMAN RIGHTS, Section 40:“Every people has the rights to have an adequate shelter and a proper life.”
3. LAW NUMBER 1 YEAR OF 2011 REGARDING HOUSING AND SETTLEMENTS AREA, Section 50:
“Every people has the rights to live in adequate house and proper life.”
2
1
Construction of 650 twin blocks rental apartment *)Construction of 650 twin blocks rental apartment *)
Construction of 685.000 subsidized housing unitsConstruction of 685.000 subsidized housing units
Facilitation of the construction of 180 apartment towers through private-sector participationFacilitation of the construction of 180 apartment towers through private-sector participationProvision of infrastructure, facility and utility fo real estate development, among others to support new city development (New Town Development)
Provision of infrastructure, facility and utility fo real estate development, among others to support new city development (New Town Development)Facilitation of new development/improvement of self-help housing quality and the provision of infastructure, facilities and utilities for self-help housing
Facilitation of new development/improvement of self-help housing quality and the provision of infastructure, facilities and utilities for self-help housing
Construction of special housing, including rehabilitation and post-disaster housing reconstructionConstruction of special housing, including rehabilitation and post-disaster housing reconstruction
Facilitation of land provisionFacilitation of land provision
Utilization and development of local resources, technology and research in housing and settlements areaUtilization and development of local resources, technology and research in housing and settlements area
*) Ministry of Housing (380 twin blocks ) and Ministry of Public Works (270 twin blocks)*) Ministry of Housing (380 twin blocks ) and Ministry of Public Works (270 twin blocks)
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To increase the provision of decent and affordable housing for low income householdsTo increase the provision of decent and affordable housing for low income households
Housing Programs 2010-2014
PRIMARY MARKETSECONDARY
MARKET
Human Settlement Equilibrium and Public
Service Obligation
Facility Liquidit
y
Local Governme
nt
Infrastructures, Facilities and Utilities Area:Water Supply System;Septic Tank Communal)Electricity System;Street Lightening
Loan/Grant
Distribution of Loan /
Distribution of Grant
Secondary
Mortgage
Market
Financing
Publishing
Managed by the Asset
Management Centre (under the
Local Governmen
t)
HUMAN SETTLEMENTS
DEVELOPMENT
ASSET BACKED SECURIT
IES
National Housing Saving
Underlying
Asset
Infrastructures,
Facilities and Utilities Area Development
Government Special Task to State Owned Corporation on Housing Development for Low Income People with Appropriate Specification and Price Based on Government Standard
To Strengthen Local
Government Capacity in
Housing and Settlement
Development through Land
Banking System
Construction Credit with Low Interest
Self-Help Mortgages and Micro Credit with
low interest
Landed Housing
DEVELOPERS
STATE/LOCAL OWNED
CORPORATION IN HOUSING AND DEVELOPMENT
Blended Financing
Urban-Rural, PSU
(Infrastructures, Facilities and
Utilities) Construction Material and Engineering Construction
BLU (Public Service Agency)Housing
Financing Centre
Infrastructures, Facilities and Utilities Area:Road;Drainage.Local Construction Material;•Local Architect;
ROADMAP HOUSING AND HUMAN SETTLEMENTS DEVELOPMENT 2005 - 2025
ROADMAP HOUSING AND HUMAN SETTLEMENTS DEVELOPMENT 2005 - 2025
Bank / Non BankExecutor
HOUSEHOLDS
Self-Help Housing Develop
ment
Self-Help Housing
POLICY DEVELOPM
ENT
Own Rent
Empowerment Community &Stimulant Support
•Dekon (Authority Delegation);•DAK Perkim (Special Allocation Fund for Housing and Settlement )
RESIDENTIAL
AREAS
Completed Units
A
A
SECONDARY
MORTGAGE
FINANCE
NATIONAL
PROGRAM ON COMMUNITY
BASED DEVELOPMENT
IN HOUSING AND HUMAN
SETTLEMENT S
Low Cost Aparment
s
4
GOI POLICIES DIRECTIONSIN HOUSING PROVISION FOR MIDDLE-LOW & LOW INCOME GROUPS
STRENGTHENING PRIMARY HOUSING MARKET IMPROVING MARKET EFFICIENCY (DEMAND & SUPPLY SIDE) PROVIDING FISCAL INCENTIVES AND DISINCENTIVES
FURTHER DEV. HOUSING FINANCE ASSISTANCE PROGRAMS EXPANDING HOUSING ASSISTANCE PROGRAM (HAP) PROVIDING FISCAL INCENTIVES IN RELATION WITH HAP
STRENGTHENING SECONDARY MORTGAGE FINANCE PROMOTING SUSTAINABLE PROVISION OF LONG TERM FUND FOR THE HOUSING SECTOR
INTEGRATING HOUSING FINANCE WITH CAPITAL MARKET
5
PROVIDING AFFORDABLE MORTGAGE THROUGH LIQUIDITY FACILITY
SUBSIDIZED SCHEME LIQUIDITY FACILITY SCHEME
Subsidy Period Limited time [average 4 years] Over the period of mortgage life (tenure)
Interest Rate Subsidized interest rate in certain limited time period and after that continue with market interest rate
Fixed one digit interest rate over the period of mortgage life (tenure)
Monthly Payment (PMT)
Monthly payment over the subsidi period ≤ 1/3 monthly income, after that monthly payment tends tobe ≥ 1/3 monthly income depends on the prevailing market rate
Monthly payment over the life of mortgage loan ≤ 1/3 monthly income
Budget Budget appropriation from Central Gov’t for subsidy (spending and non-revolving)
Budget appropriation from Central Government for investment (financing andrevolving)
Allocated Gov’t Budget
Required continous appropriation After a certain period, appropriation is begin to reduce from time to time, until no appropriation is further needed when National Housing Saving scheme is fully institutionalized.
Source of Fund National budget National budget + other funding sources
Utilization Only for demand side (Subsidized mortgage) Both for demand and supply sides:- Demand side: Subsidized mortgage with one digit
fixed interest rate and tenure up to 15 years
- Supply side: Construction credit with affordable interest rate and tenure up to 24 months
STRENGTHENING THE PRIMARY MARKET6
Inte
rest
Rat
es
182 4 6 8 10 12 14 16 20Repayment Period (Years)
Monthly payments follows fluctuating market rates,
leading to unaffrodable PMT and mortgage deafault
MORTGAGE with Subsidized Scheme MORTGAGE with Liquidity Facility Scheme
2 4 6 8 10 12 14
Repayment Period (Years)
While market rate fluctuated,PMT is fixed dan affordable
resulting no affect to mortgage default
Increasing Subsidized Ratemake mortgage affordable only during subsidy period
Maintain Subsidized Rate in 1 digit make it
affordable and fixed PMT over the mortgage tenure
Inte
rest
Rat
es
INSTITUTIONALIZING LIQUIDITY FACILITY
THE IMPACTS OF LIQUIDITY FACILITY ON SUBSIDIZED MORTGAGE
GOVT’S BUDGET[FINANCING POST]
LONG-TERM FUND
GOVT’SSERVICE
UNIT (BLU)
IMPLEMENTING BANK
SUPPLY SIDE
CONSTRUCTIONCREDIT
SUPPLY SIDE
MORTGAGE
REPAYMENT
CONTRACTUAL SAVINGFOR HOUSING:-TAPERUM-PNS-TWP-TNI/POLRI-YKPP-SWASTA
PUBLIC FUND
REPAYMENT
INSTITUTIONALINVESTORS- JAMSOSTEK- PENSION FUND- INSURANCE
COMPANIES
REPAYMENT
7
NAD575
Sumut550
Sumbar950
Riau 200
Kepri1.400
Jambi200
Sumsel300
Bengkulu200
Lampung1.050
Banten700
DKI Jak100
Jabar2.125
Jateng2.875
DIY300
Jatim2.450
Bali150
NTB850
NTT2.950
Kalbar500
Kalteng100
Kalsel75
Kaltim0
Sulteng1.050
Sultra1.000
Gorontalo650
Sulut600
Sulsel1.300
Maluku450
Pabar400
Papua400
Babel200
Malut150
Sulbar200
DISTRIBUTION OF STIMULANT FOR SELF-SUPPORT HOUSING 2011
10
Total: 25.000
T H A N K Y O U
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