Tito: Private Sector Involvement Will Optimise Public Housing Programme

Home Affairs Minister Tito Karnavian has emphasised that private sector involvement is crucial to accelerating the realisation of the Public Housing Programme and addressing the housing backlog in Indonesia. He stated that the government cannot solely rely on the State Budget (APBN) or Regional Budgets (APBD) to meet the community’s housing needs.

Consequently, the Ministry of Home Affairs (Kemendagri) is urging regional governments to provide various conveniences to developers so that the construction of homes, particularly for low-income communities (MBR), can proceed more rapidly. "What must be done is to encourage the private sector to work. Their engine is actually much larger than the government’s engine," Tito said during the inauguration of the Central Executive Board of the Indonesian Housing and Settlement Developers Association (APERSI) in Jakarta on Monday evening.

Tito noted that the central government has introduced several policies to facilitate this, including the exemption of Building Approval Levies (PBG) and Land and Building Rights Acquisition Fees (BPHTB) for MBR housing. However, he acknowledged that the implementation of these policies has not been uniform across all regions.

He therefore requested that developers actively report any regions that have not optimally implemented these policies. Tito assured that the Ministry of Home Affairs would conduct special evaluations of regions deemed to be hindering the acceleration of housing development. "I want to get data from fellow developers on which regions are making things difficult, which regions are sluggish. I will hold a separate zoom meeting with them and, if necessary, I will issue a letter of reprimand to them," he asserted.

Tito dismissed concerns from some regions that waiving PBG and BPHTB for MBR would reduce Regional Original Income (PAD). He argued that the economic and social benefits generated by housing development are far greater. He explained that as more people own liveable homes, the poverty rate will decrease. Furthermore, housing construction creates jobs, increases transactions in the building materials sector, and expands the base for Land and Building Tax (PBB) revenue in subsequent years.

To strengthen this policy, the Ministry of Home Affairs will coordinate with the Development Finance Comptroller (BPKP) to ensure that the exemption of PBG and BPHTB for MBR is included as a monitored aspect in the regions. The ministry will also give appreciation to regions that support the public housing programme. Tito concluded by inviting APERSI to continue strengthening communication with regional heads, stating that collaboration between regional leaders and developer associations is a vital part of accelerating the resolution of housing issues in Indonesia.