Developers' Perspectives on Private Sector Engagement and State Regulation for Low-Income Housing Provision in Indonesia

Abstract

Since the spread of neoliberal policies in the 1980s, many scholars have conducted studies on private sector involvement in low-income housing provision.  While many have focused on issues of implementation (e.g. Abdul-Aziz and Jahn Kassim, 2011; Ebekozien, Abdul-Aziz and Jaafar, 2020; Nyein and Hadikusumo, 2021), developers' perspectives on this concept remain largely unexplored, particularly for developing countries.  This paper examines various forms of developer involvement in low-income housing provision for an illustrative case in Indonesia: Bandung Metropolitan Area, Indonesia’s third-largest metropolitan area with a population exceeding 8.5 million. We address the following questions: 1) How does the state regulate and facilitate private sector involvement in low-income housing provision in Indonesia? 2) What are the developers’ perspectives regarding private sector involvement in low-income housing provision in the Metropolitan Bandung Area?  Like many other countries, Indonesia has implemented various enabling strategies involving developers in low-income housing provision, such as infrastructure support, inclusionary housing arrangements (known locally as balanced housing rules), streamlined licensing, and, recently, public-private partnerships. The paper makes clear that the predominant form of collaboration still revolves around government-provided infrastructure assistance to developers willing to construct single-family low-income housing. Meanwhile, only a limited number of private developers have implemented other types of low-income housing arrangements into their housing projects (Mungkasa, 2013). The paper, through an in-depth case study, shows that developers are crucial actors in low-income housing provision in Indonesia, with their adoption of government-provided assistance a crucial factor in the role of planning regulation around property market dynamics.