Why People Eligible for Subsidised Housing Still Fail to Get It

The success of the subsidised housing programme has so far often been assessed using a single main indicator: how many homes have been financed and built. In East Java, the subsidised housing programme delivered through the Housing Finance Liquidity Facility (FLPP) has performed well.

According to monitoring by the Ministry of Finance, conducted through the East Java Regional Office of the Directorate General of Treasury, the FLPP had helped finance around 128,324 homes worth Rp12.47 trillion by October 2026. This was a significant increase from the middle of 2025, when around 52,095 homes worth Rp5.84 trillion had been financed. The results deserve recognition as evidence of the Government’s commitment to widening access to home ownership for low-income communities (MBR).

Yet behind these encouraging figures, it is worth shifting the programme’s perspective from the macro level to the individuals in the community. What happens when someone who wants to own a home and is formally considered eligible for subsidised housing ultimately fails to obtain one?

Field findings and discussions with stakeholders indicate that some prospective beneficiaries who meet the programme’s criteria have still been unable to reach the point of home ownership because of administrative difficulties, credit histories, upfront transaction costs and other institutional barriers (East Java Regional Office of the Directorate General of Treasury report, 2026).

Put simply, successful programme disbursement does not necessarily mean that the people entitled to assistance have actually received its benefits. This issue deserves greater attention in discussions of housing policy in Indonesia, including housing finance.

Over the past two decades, the Government has demonstrated a strong commitment to improving low-income communities’ access to decent housing. One of its main instruments is the Housing Finance Liquidity Facility (FLPP), which has helped hundreds of thousands of families buy their first homes through more affordable financing arrangements (BP Tapera, 2024).

Behind these achievements, however, lies an intriguing paradox. Many people who formally meet all the requirements for housing assistance still do not manage to obtain a subsidised home. They meet the criteria but fail to receive the benefit. They have an entitlement, but not access.

When Rights Do Not Lead to Access

In public policy studies, this is known as the gap between entitlement and access. In simple terms, housing entitlement can be understood as a person’s formal right or eligibility to receive benefits from a housing programme. A person is considered entitled when all the administrative requirements have been met.

Housing access, by contrast, refers to the actual ability to obtain and enjoy those benefits. Jesse C. Ribot and Nancy Lee Peluso explain this distinction through Access Theory. They argue that access is not the same as a right. Access is “the ability to derive benefits from things” — the actual ability to benefit from a resource. In other words, having a right does not necessarily mean being able to enjoy its benefits (Ribot and Peluso, 2003).

The subsidised housing situation can be illustrated by a formal-sector worker whose income falls within the MBR criteria. The worker may meet all the programme requirements: they do not own a home, have never received a housing subsidy and are administratively eligible for FLPP.

But the process of buying a home does not end there. When applying for a mortgage (KPR), the applicant may be held back by an old credit record in the Financial Information Services System (SLIK).

SLIK is a system managed by the Financial Services Authority (OJK) that records an individual’s credit or loan history with financial institutions. Banks and finance companies use it to assess prospective borrowers before granting credit, including FLPP subsidised mortgages.

Even if an applicant passes the SLIK assessment, they may then be unable to afford the mortgage signing costs, which can be substantial for prospective subsidy recipients.

If that cost barrier is overcome, the applicant may still face a shortage of homes in locations suited to their work and travel needs. The issue is no longer simply whether someone is entitled to a home, but whether they can turn that entitlement into real access to affordable housing.

From Housing Shortage to Housing Access

For years, much of the housing policy debate in developing countries has focused on housing shortages. The apparent solution is straightforward: build more homes. But, as the examples above suggest, the policy challenge has now shifted.

As the supply of subsidised homes continues to grow, a more complex problem is emerging: failure of access to housing. The issue is not that homes do not exist, but that various barriers prevent people who are entitled to them from accessing the homes that are available.

These barriers take several forms. First are administrative barriers. Documentation requirements, verification results and credit records often pose major obstacles for prospective beneficiaries.

Second are financial barriers. Many families can afford monthly mortgage repayments but struggle to provide the upfront costs required before the mortgage agreement is signed. Third are institutional barriers. The process involves many parties, from developers and banks to local governments and regulators. When coordination is inadequate, the risk of access failure increases.

Fourth are regulatory barriers. Licensing, spatial planning and land status can also delay the provision of homes in locations that should be accessible to the public.

Housing entitlement → administrative access → financial access → institutional access → regulatory access → actual home ownership.

This illustrates how the path to home ownership resembles a chain: failure at any link can cost someone the opportunity to buy an affordable home through the subsidy programme.

Time to Change the Way Success Is Measured

As an alternative, it may be worth adjusting the way housing policy success is measured to include how many people who qualify for assistance nevertheless fail to obtain a home.

The Government could consider questions such as how many applicants fail because of administrative problems, how many are held back by upfront costs, how many are rejected because of credit-system barriers, and how many lose access because of poor coordination between institutions.

Answering these questions would help the Government understand that housing problems are not always just about the number of homes built. It also needs to reconsider how accessible the programme is.

Ensuring that entitlement to subsidised housing is converted into a tangible benefit — in other words, into access — is a shared responsibility, particularly for the Government and relevant stakeholders. The programme will achieve its social purpose when a family that is entitled to assistance can actually live in a decent home, rather than when it merely posts impressive performance figures.

The future housing policy agenda must not stop at asking, “Who is eligible?” It must also ask, “Why do some eligible people still fail to gain access?” Until this question is answered, Indonesia may succeed in building more homes without necessarily succeeding in widening access to them.