1. INDONESIAS FUTURE DIRECTION OF HOUSING POLICIES, PROGRAMS, AND FINANCING Ulaanbaatar, June 26-29, 2011 MINISTRY OF HOUSING THE REPUBLIC OF INDONESIA Hetty Adriasih [hetty.adriasih@gmail.com] Dr. Eko D. Heripoerwanto [herieko123@yahoo.com] Workshop on Housing Finance

2. 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

3. Problems Lack of Housing Supply Increasing Number of Substandard Housing Units Expanding Slum Areas Backlog is expected to increase from 5.8 million units (2000) to 8 million by the end of 2010 1 1 2 2 3 3 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 houses 12,4 % live in non-permanent wall houses 1,2 % lives in leaf roof houses 2007 21,1% of houses in Indonesia have no access to clean water 8,54% have no electricity 22,85% have no access to laterines The expansion of slum areas reaches 1.37% per year Expanded slum areas: 54.000 Ha (2004) 57.800 Ha (2009) 1 1 Only +20% of housing stocks provided by market

4. Law, Regulations and Housing Policies 2010-2014 To increase the provision of decent and affordable housings for low income households To 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 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 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. REPUBLIC OF INDONESIAS 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.

5. Construction of 650 twin blocks rental apartment *) Construction of 685.000 subsidized housing units Facilitation of the construction of 180 apartment towers through private-sector participation 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 Construction of special housing, including rehabilitation and post-disaster housing reconstruction Facilitation of land provision Utilization 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) To increase the provision of decent and affordable housing for low income households Housing Programs 2010-2014

6. PRIMARY MARKETSECONDARY MARKET Human Settlement Equilibrium and Public Service Obligation Facility Liquidity Local Government 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 Government) HUMAN SETTLEMENTS DEVELOPMENT ASSET BACKED SECURITIES 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 Bank Executor HOUSEHOLDS Self-Help Housing Developmen t Self-Help Housing POLICY DEVELOPMENT OwnRent 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 Aparments

7. GOI POLICIES DIRECTIONS IN 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

10. NAD 575 Sumut 550 Sumbar 950 Riau 200 Kepri 1.400 Jambi 200 Sumsel 300 Bengkulu 200 Lampung 1.050 Banten 700 DKI Jak 100 Jabar 2.125 Jateng 2.875 DIY 300 Jatim 2.450 Bali 150 NTB 850 NTT 2.950 Kalbar 500 Kalteng 100 Kalsel 75 Kaltim 0 Sulteng 1.050 Sultra 1.000 Gorontalo 650 Sulut 600 Sulsel 1.300 Maluku 450 Pabar 400 Papua 400 Babel 200 Malut 150 Sulba r 200 DISTRIBUTION OF STIMULANT FOR SELF-SUPPORT HOUSING 2011 10 Total: 25.000

11. T H A N K Y O U