Government Accelerates Construction of Subsidised Flats in Cities, Developers Warn of This Issue

The government is accelerating the construction of subsidised rental flats in urban areas to meet the housing needs of low-income residents (MBR) and the middle class. Amid high land prices and limited space in cities, this policy is seen as one solution to reduce the still substantial housing backlog. Chairman of the Central Board of the Indonesian Real Estate Association (Ketum DPP REI) Joko Suranto stated that housing issues in urban areas are becoming increasingly complex due to purchasing power lagging behind rising property prices. “We know that the value of houses in urban areas cannot be caught up with, especially for MBR and middle-income people,” Joko said when met at the Financial Services Authority (OJK) office in Jakarta on Monday (13/4/2026). Meanwhile, the current housing backlog stands at around 15.2 million units, with more than 70 percent in urban areas. “From that point, the current problem is a backlog of 15.2 million. Mostly, almost above 70 percent is in urban areas. Naturally, there must be a solution,” he said. According to Joko, the government has actually begun preparing several strategic steps, including plans for land subsidies. However, he emphasised several important matters that need attention to ensure the subsidised flat construction programme runs effectively. First, the land to be used must have clean and clear status to avoid legal issues later. Second, setting price limits per square metre in urban areas is needed as a reference to keep projects affordable for the target community. In addition, the implementation or delivery aspect of the project must be ensured to run well. Joko also highlighted the importance of clarity on the off-taker side (absorbers), such as through the Tapera scheme or other institutions, to guarantee programme continuity. He added that all these policies need to be designed in a measured and integrated manner to provide certainty for all parties, from the government, developers, the banking sector, to the community as beneficiaries.