Introduction

House is one of the fundamental human necessities and plays a very strategic role in the national agenda for developing the nation’s character and personality. It is the state’s responsibility to ensure that each Indonesian has access to proper and affordable housing.

Therefore, the state is responsible for developing and implementing equitable housing and settlement policies. Balanced housing policy is one of the housing and settlement policies aimed at realizing justice, reducing social inequality, and effectively regulating the direction of housing development to align with the community’s needs.

Balanced housing is a policy that obliges legal entities conducting housing development (“Housing Developers”) to develop housing or a residential area with a balanced composition between simple houses, medium houses and luxury houses. The intention behind this policy was to enhance the accessibility for Low-Income Communities (“LIC“) to obtain proper and affordable housing.

This policy is regulated by Government Regulation Number 14 of 2016 on Implementation of Housing and Settlement as amended by Government Regulation Number 12 of 2021 on Amendments to Government Regulation Number 14 of 2016 on Implementation of Housing and Settlement (“GR 12/2021”), which is an implementing regulation of Law Number 1 of 2011 on Housing and Settlement as amended by Law Number 6 of 2023 on Job Creation (“Housing Law”).

Discussion

  1. The Elements of a Balanced Housing Policy
    The obligation to build balanced housing applies to both large-scale1 and non-large-scale2 housing developments. Balanced housing policy comprises three fundamental elements: location, house classification, and composition.

    1. Location
      The implementation of balanced housing policy comprises two provisions related to location:3

      1. For large-scale housing development, balanced housing must be implemented in 1 (one) expanse;
      2. Meanwhile, for non-large-scale housing developments, Housing Developers may choose to implement balanced housing obligations in 1 (one) expanse or not in 1 (one) expanse, but still in the same regency/city where the main project is built.
    2. House Classification
      The classification of houses consists of luxury houses, medium houses, and simple houses, wherein the criteria for each category of house is measured by the selling price, as determined by the applicable laws and regulations.
    3. Composition
      Composition is a comparison of the number of luxury houses, medium houses, and simple houses built by Housing Developers. This composition provision may be considered as the core of balanced housing policy.

      There are differences between the balanced housing composition provisions for large-scale and non-large-scale housing developments, as explained below:

      1. For the large-scale housing project, a 1:2:3 composition is used, meaning that for each construction of 1 (one) luxury house, at least 2 (two) medium houses and 3 (three) simple houses must be built.
      2. For non-large-scale housing projects, three possible alternative compositions can be applied, namely:
        1. For each construction of 1 (one) luxury house, at least 2 (two) medium houses and 3 (three) simple houses must be built, as also applied to large-scale housing projects;
        2. For each construction of 1 (one) luxury house, at least 3 (three) simple houses must be built; or
        3. For the construction of 2 (two) medium houses, at least 3 (three) simple houses must be built.
      3. In the case of the construction of a condominium, balanced housing policy is implemented by the obligation to build public condominiums4 of at least 20% (twenty percent) of the total floor area of the commercial condominium5 being built by the Housing Developer.

        As previously explained, provisions regarding the obligation to build at least 3 (three) simple houses must include subsidized and non-subsidized simple houses. This provision is intended to ensure that LIC has access to proper and affordable housing.

        The balanced housing composition is designed to comply with current circumstances in Indonesia, where the demand for simple housing for LIC and medium housing for middle-income communities is higher than for luxury houses. Under this provision, housing development projects will be more planned and effectively accommodate the actual demands of the community.

  2. The Relief of Balanced Housing Obligation
    The Housing Law provides relief for Housing Developers regarding the obligation to implement balanced housing. The Housing Law stipulates that the obligation of Housing Developers to build detached or row simple houses as part of balanced housing policy agenda may be converted into:

    1. Construction of public condominiums in the same expanse where the main project is built; or
    2. Funds for the construction of public houses6. It is the responsibility of the Housing Organizing Body to manage these funds.
  3. Exclusion Provisions
    Article 34 of the Housing Law,  Housing Developers are granted an exemption from the obligation to implement balanced housing if their housing project only consists of public housing. Considering the spirit of the balanced housing policy is to enhance access to obtain houses for LIC, it is logical if it is not applied to housing projects where all units are built as public houses targeted for LIC.

Closing

The balanced housing policy manifests the state’s responsibility to ensure equality and justice regarding access to proper and affordable housing, primarily for LIC. This policy is expected to be a vital instrument in realizing justice, reducing social inequality, and determining the direction of housing development in line with community demands.

Avaya Ruzha Avicenna

Sources

  1. Article 21B Paragraph (2) GR 12/2021: Large-scale housing is a group of houses consisting of at least 3,000 (three thousand) housing units.
  2. Article 21B Paragraph (3) GR 12/2021: Non-large-scale housing is a group of houses consisting of 100 (one hundred) housing units up to 3,000 (three thousand) housing units.
  3. Article 21D GR 12/2021
  4. Article 1 point 7 Law Number 20 of 2011 on Condominium as amended by Law Number 6 of 2023 on Job Creation (“Condominium Law”): Public condominium is a classification of the condominium intended for LIC.
  5. Article 1 point 10 Condominium Law: Commercial condominium is a classification of the condominium intended to gain profit.
  6. Article 1 point 10 Housing Law: Public house is a classification of the house intended for LIC.
Read Also  Agrarian Reform