Munich Personal RePEc Archive

Demand and supply side policies to address the housing problems for low income households in Indonesia

Prasetyono, Pipin (2016): Demand and supply side policies to address the housing problems for low income households in Indonesia.

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Abstract

Indonesia has suffered a housing problem because its structure of workforce creates a barrier for low income people to access housing mortgage. Almost 70 percent of the workforce are informal sectors, characterized by low income, have limited access to the banking system, and are deemed non-creditworthy. As a response, the government of Indonesia launched a program namely Fasilitas Likuiditas Pembiayaan Perumahan or Liquidity Facility for Housing Finance (FLPP, hereafter) in 2010 that was initially designed to increase the demand for low income housing by bringing down the interest rate of housing loans. Against this background, this paper will examine the FLLP as a form of the government’s intervention in the low income housing market from the microeconomics perspective.

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