An Evaluation of Low Cost Housing Program (KPR-BTN), a Case Study in Jabotabek, Indonesia

Abstract

This paper describes and evaluates the KPR-BTN housing program that is currently delivering about 60,000 low cost housing units per year in urban Indonesia with the aid of the government. The government's objective for this program is to help low and middle income people to obtain houses built by private developers and the government owned corporation, PERUMNRS, by making low interest rote mortgages available for them. The program is first evaluated in the context of postindependence housing policies in Indonesia. Then, its production, distribution and occupant characteristics ore examined with a case study in Jabotabek, the most rapidly growing urban area in lndonesia. This paper shows thot, while this program hos been making progress in meeting a significant portion of housing demand, it has experienced difficulties in serving its intended beneficiaries, and in controlling the sharp increase in housing prices. Over time, the types of houses being built have become smaller and their locations have tended to spread further out around the cities. This paper suggests that the government should improve and simplify its currently complex regulations, especially in land acquisition procedures.