Indonesia's Subsidized Housing Program Faces Criticism for Stagnant Targets

Government's 2026 Plan Questioned

The Indonesian government's target of distributing 285,000 subsidized housing units through the Fasilitas Likuiditas Pembiayaan Perumahan (FLPP) scheme in 2026 has come under scrutiny. Economist Wijayanto Samirin from Universitas Paramadina expressed concerns that this figure represents a stagnant target that fails to effectively address the country's significant housing backlog.

Challenges in Meeting National Housing Needs

Wijayanto highlighted the substantial gap between the annual target and the government's ambitious goal of constructing 3 million housing units per year. The economist emphasized that with subsidy numbers remaining in the hundreds of thousands, achieving the broader vision appears challenging. "The number of homes receiving FLPP subsidies in 2026, at 285,000, is relatively stagnant over time. The target of 3 million homes annually is clearly unachievable," Wijayanto stated.

Need for Innovative Financing Solutions

The current FLPP scheme, while beneficial, appears insufficient to bridge the gap between the government's housing ambitions and the actual numbers being achieved. Experts suggest that a combination of financing schemes might be necessary to boost the housing supply. The government faces the challenge of either scaling up subsidy allocations or introducing more innovative financing mechanisms to meet its housing targets.