Government Urged to Develop a Roadmap for Balanced Housing to Enforce Developers' Obligations

The Chairperson of Commission V of Indonesia’s House of Representatives (“DPR”), Lasarus, has urged the Ministry of Housing and Residential Areas (“PKP”) to promptly develop a roadmap for balanced housing. According to him, establishing such a roadmap is essential to addressing the housing backlog.

Lasarus explained that Law No. 1 of 2011 on Housing and Residential Areas, as amended by Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred as “Law 1/2011”), requires legal entities that develop housing projects to implement balanced housing under a proportional ratio of 1:2:3 for luxury houses, medium-priced houses, and simple houses, respectively.

According to Lasarus, the implementation of the balanced housing concept serves as a solution for increasing the supply of housing for low-income communities without relying solely on state fiscal resources. “This is important as part of our efforts to reduce the housing backlog because developers have obligations in relation to the balanced housing concept — that is what the law provides,” he stated.

As part of the roadmap, the Ministry of PKP has also been urged to develop a clear and robust reward and punishment mechanism for developers. The objective is to ensure that developers do not merely project a philanthropic image through their Corporate Social Responsibility (CSR) initiatives while failing to fulfil their legal obligations to provide simple housing units in accordance with the balanced housing concept.