Overview

Back in 2016, the Indonesian Government issued Economic Policy Package XIII on Housing for Low-Income Citizens, which represented a concrete realization of the government’s stated goal of building one million houses (“One Million Houses Program”).[1]

This year alone, demand for housing developed specifically for Low-Income Citizens (Masyarakat Berpenghasilan Rendah – “MBR”) has shown a marked upswing against a background of economic uncertainty across Indonesia, which is increasingly seeing the country’s younger citizens being unable to afford landed houses in big cities. In order to grasp this opportunity, many housing developers have expressed an interest in developing MBR housing, in spite of the small profit margins which are available, as they believe that investment turnover in this context is both fast and easy.[2] Indeed, by way of comparison, the total MBR housing which has to date been built by private developers under this program tops the total MBR housing developed by the government by 447,364 units to 161,299 units.[3]