House is one of the primary needs of a whole society. Those needs are attempted to get fulfilled by the government, especially those for Low-Income Households. However, the house provision attempt in various governor periods was obstructed by complicated payment mechanisms, economic crises, and misdirected.
Physiology needs in Abraham Maslow’s Hierarchy of Needs become one of the crucial aspects of human needs. One of those is the need for residence. The basic needs are essential for humans to protect themselves from heat and rain. The human race or society will perish without basic needs that are fulfilled (Aruma & Hanachor, 2017).
However, the needs of residence are barely attained. According to the housing backlog for Low-Income Households, the number of residence needs has reached 260.000 by the year 2020. The government, using various policies, endeavors to support Low-Income Households through the provision of subsidized housing.
The provision for low-income households is not something new. This attempt had been done by the colonial Hindia-Belanda to provide livable houses for local workers because they lived in dirty slums that had taken many lives from the plague (Sabaruddin, 2012). Based upon those problems, the colonial government formed Woning Vraagstuk whose duty included advocating the supply of new buildings and local residence conditions (Cobban, 1993).
In 1925, the colonial government built N.V. Volkshuisvesting (housing company) at municipality levels that functioned to get the land and withdrew capital for the housing provision. The central government funded 75% and the municipality 25% (Colombijn, 2011). Those funding models were considered profitable as the housing company got to decrease the private loans. If the housing company had reached its profit target, it could operate independently and the colonial government would no longer offer loans or interest. After the housing project ended, the company would pay taxes to the colonial government, such as land taxes, road taxes, company taxes, and development costs (Cobban, 1993).
To access houses provided by the colonial government, the credit with a low-interest system, that the source of the fund funneled from the bank to the organizations, which were formed by the government was applied. Whilst the local bank is not able to funnel the low-interest credit, the colonial government should build a bank that is capable of offering low credit (Cobban, 1993). Although they had built the low credit mechanism, real estate developers involved by the colonial government in the housing development were more attracted to the rent houses over 80 guldens than the ones worth below 30 guldens. The developers assumed that financial management performance from those which the rent worth under 30 guldens considered unmatched to the profit margin that was acquired from the low sale value. Whereas, outside the housing market created by the colonial government, there were many residences that the rent was worth under 10 guldens. Moreover, the low-income local workers also considered that hire change worth 5,5 gulden had weighed them.
In the end, the colonial government realized that low-income households were not able to access the high rental price. Therefore, the colonial government prioritized other programs for it was impossible to provide a big amount of low-priced housing (Colombijn, 2011). Besides the low-income locals and unprioritized housing matter, there was an economic depression that occurred in the 1930s. The income to the government was decreased as companies were at loss, so the colonial government needed to cut out some of the expenditure, such as education, health, administration, police, army, navy, and housing (Cobban, 1993).
The Hindia Belanda colonial government’s fiasco to provide housing for the low-income households could no longer be overcome anymore. Also, Hindia Belanda colonial government was replaced by Japan that ruled over it since 1942. In Japan’s colonial era, local housing never became a priority as it was in wartime. The discussion concerning low-priced and livable housing was merely a discussion without any realization (Colombijn, 2011).
Post-Independence Housing provision
After Indonesia’s independence, the government once more planned the provision of livable and affordable public housing. It was actualized then by The Congress of Health Public Housing (Kongres Perumahan Rakyat Sehat) that took place in Bandung on 25-30th August 1950 aiming for exploration as well as rejuvenation of underprivileged households. Following the congress, means of ordinary public housing provision was initiated. The congress concluded that the housing provision required to pay attention to the physical and social aspects; and ran with a cooperation housing association system (Development Treasury Foundation/Yayasan Kas Pembangunan). The last conclusion was proposed by Soemitro Djojohadikoesomo, Minister of Trade and Industry (Wilopo-Prawoto Cabinet Period, 1952-1953), and considered capable of offering solutions to fund deficiency. Soemitro’s proposal also became an official national policy through a decree that was announced in 1952. Through this decree announcement, the initial capital to build the housing was obtained from the central government. Afterward, citizens could set aside their money and deposit it to the Development Treasury Foundation for accessing public housing (Colombijn, 2011).
On April 25th, 1952, through President Decree Number 05, 1952, Djawatan Perumahan Rakyat was built; under the Ministry of Public Works and Labor that managed the policies, collecting data of housing demand, managing the building technical problems, and financing housing development. For financial matters, Djawatan Perumahan Rakyat coordinated with the Public Housing Administrator Agency and Development Treasury Foundation to provide under-market-value public housing. The Development Treasury Foundation worked similarly to N.V.Volkshuisvesting back then in the Hindia Belanda colonial era. They augmented their fund through development projects that were done after gaining money from selling houses. Thus, the money could immediately be allocated to new projects. Whilst it is different from N.V.Volkshuisvesting which acquired money from the rent to preserve those houses, not allocated to new housing development projects (Colombijn, 2011).
The government attempted to establish houses for underprivileged households, though those houses could practically be afforded by the civil servants at most through buying or renting systems. Ironically, hardly would they occupy those public housing, but reselling it. Public housing provision for underprivileged households scarcely met a deadlock since there was an economic crisis happening to Indonesia and therefore the housing project fund was restrained (Colombijn, 2011).
The public housing development that was postponed in the Soekarno presidency era later was carried on in the Soeharto presidency period through forming the National Housing Policy Agency (Badan Kebijaksanaan Perumahan Nasional) in the year of 1972. On Five Years Development Plan I (Repelita I), the self-subsistence of food became the main priority whilst public housing remained on devising. On this step, the government established the Indonesian Real Estate Company (REI) in 1972 which functioned to provide land and was responsible for housing development. REI was also equipped with a Housing Counseling Center and Housing Research and Development which conducted research regarding the public housing provision endeavor (Budi, 2018).
Public housing provision once again became a focus on Repelita II which discussed how public housing had to balance population growth, especially in the urban area; executed with government assistance and self-development from the public themselves; paying attention to urban planning, and using the house credit system effectively. Upon executing the development project, the government auctioned the tender project and opened a call for private investors (Budi, 2018). Financially, the government together with the State-owned Enterprise of Indonesia (BUMN) formed National Urban Development Corporation (Perum Perumnas) on July 18th, 1974 which then cooperated with Bank Tabungan Negara to facilitate Household Loan Credit (KPR) with subsidized interest. BTN gave maximum interest amounting to 5-9% per year with a credit period of up to 20 years (Budi, 2018). Meanwhile, public housings’ target percentage was 80% of low-income households, 15% of middle-income households, and 5% of high-income households. Albeit the public housing target had been arranged, the government kept prioritizing civil servants, armies, and fixed-income private employees.
The early public housing development was focused in Jabodetabek which was an urban area, economic pillar, and densely populated. In 1979, as much as 73.914 houses had been built, also there were many public housings established in Depok, Jakarta, Bekasi, Cirebon, Semarang, Surabaya, Medan, Padang, and Makassar. The number of public housing developments grew from 233.770 units in 1984 to 300.280 units in 1994. The development project was postponed in 1998 due to the economic crisis and regime alteration.
Following the change of the regime, public housing provision was still proceeding though not as massive as it was in the New Order era. This program would only get great attention when President Susilo Bambang Yudhoyono came with a program of Seribu Tower Rumah Susun Sederhana (Rasuna) that was conducted in 2007-2022. This program targeted households with income up to 5,5 million rupiahs. During the program, there was a procedure considered revolutionary which was eliminating subsidies for public housing provision. Instead, KPR documents were sold to the capital market and could be sold to global financial investors. This mechanism was expected to stir the money towards the bank and public housing industry. Thus, the nation would only support the conducive investment, also providing public access to get houses through credit loan that was resulted by financial market investment (Kusno, 2012).
On providing public accesses, there was the Facility of Housing Finance Liquidity (FLPP) which resolved the demand problems through credit interest, therefore would increase the housing supply. Public households or house buyers through FLPP needed to have Tax Identification Number (NPWP) and Annual Tax Return (SPT) that were not owned by the informal workers or households with various incomes. In the Rasuna case, there was a sealing by the local government DKI Jakarta regarding the building permits. During this sealing, the developers raised Rusuna’s price as high as market value. Moreover, the developers also shifted the market target from low-income households to middle-income households (Kusno, 2012).
Tapera as Solution
House provision attempts in every presidency period had always had its concepts, targets, and obstacles; the second period of Jokowi presidency was no exception. President Joko Widodo (Jokowi) had signed the Government Regulation 25/2020 on Public Housing Savings Enforcement (Tapera) on May 20th, 2020. This regulation aims to provide decent and affordable housing for the public that is registered as Tapera acceptors. According to Government Regulation 25/2020 article 7, Tapera acceptors were categorized into two, which were workers and independent workers. Workers include state civil apparatus, Indonesian National Armed Force, Indonesian national police, BUMN workers, Regionally-owned enterprises (BUMD) workers, and private sector workers; while the scope of independent workers includes freelancers.
The acceptors have to pay 3% of their income, detailed to 0,5% from the employer and 2,5% from the employees. The independent workers’ dues charged on their average income every month. Tapera applied only to low-income households whose income is 4-8 million rupiahs. The money that has been accumulated from Tapera will be managed by the investment manager in the form of bluechip stocks for raising BP Tapera assets.
Even though it aims for providing houses for low-income households, the salary deduction mechanism gained a lot of critics. By regulation, if it were examined further, Tapera only charges employers and employees, but not the government. The Tapera’s mandatory dues will only weigh the public more. It is reciprocal to the 1945 Constitution of the Republic of Indonesia Article 28H section 1 and Article 34 which mention that the government is required to provide public needs of residence.
However, conceptually, principles written in Law No.4 of 2016 on Tapera (Tapera Law) are not consistent with Law No.1 of 2011 on Housing and Residential Area (PKP Law). Whereas it could be seen that Tapera Law is based upon PKP Law. Especially the cooperation principle, which philosophically became the basis of Tapera dues that are charged together to employers and employees then managed by the government. This principle is the new one that could not be found in PKP Law.
Furthermore, the critics toward Tapera law lie in the absence of employers’ and employees’ involvement as public in the planning process. Whereas the PKP Law has regulated Article 7 section 2 which stated that planning is undertaken with public involvement. BP Tapera members and Tapera committee that the function is to do the planning did not involve the employers nor the employees.
Besides these weaknesses stated above, one of the reasons for the Tapera’s presence was the limitation of access toward housing financing. This matter was indicated by the Household Loan Credit (KPR) ratio towards Indonesia’s GDP which remained below 3% and quite left behind from Malaysia that has reached up to 38,4%. As a solution, Tapera also has its strength compared to former policies.
First, Tapera does not only benefit those who do not own houses, but also the public who have one. It could be seen from Tapera Law article 25 which stated that housing financing benefits on the acceptors include house ownership financing, house construction, or house renovation. Thus, those who have got houses would also benefit from Tapera for it could be used for renovating their houses.
Second, BP Tapera is an institution that will both replace and complete the function of the Board of Civil Servant Housing Savings Advisory (Bapertarum PNS) that serves housing assistance for state servants. This replacement would equalize civil servants to independent workers in the course of obtaining houses therefore it would not be vulnerable to inequality. It could also shorten the government bureaucracy on realizing feasible housings for every element in society.
Third, even though it is charged on the employers and employees, there are requirements to obtain the house from Tapera. The acceptors who qualify as low-income households regulated in Tapera Law Article 7, which have an income maximum of eight million rupiahs and not owning houses, are entitled to file the housing financing benefit with low interest using the KPS scheme. Though, the acceptors who are unqualified still have the right to get the return of deposits and its outcome following Tapera Law article 14 section 2. These strengths of Tapera law give clarity on fund funneling for the unqualified public to obtain houses from Tapera.
In every policy, the government needs to take public aspiration. Furthermore, the attempt of housing provision for low-income households in the various governor periods, quite the contrary, is not affordable for them. Former presidencies indeed had strived for low-priced houses, though practically provided only for the state servants, benefited private more, and public house funding was not prioritized, unlike the other policies.
Tapera possesses strengths and weaknesses, though needs to be seen which would not be disadvantages for the public. The solutions which can be adopted by the government are engaging the public in Tapera’s planning and not charging the entire employers or employees. Tapera aims for those who are interested and not obligatory to all. Through this mechanism, Tapera as a policy is expected to target its original intention and goals. Low-income households must acquire decent residences, not only the plutocrats in this nation.
Writer: Beby Putri Adriansyah Pane dan Tita Meydhalifah
Editor: Fadhilla Dwi Prameswary Rayes
Illustrator: Ingga Malia Dewi
Translator: Salsabella Adista Trisnu Pramesti
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