It is becoming increasingly difficult for individuals in many countries to have at least a house or rent accommodation. This situation leads to a vulnerability, given the fact that housing is one of the primary needs for living. This essay will identify the main causes of this situation and provide effective solutions that can be intervened by the government in tackling the issue.
In recent years, owning a house has been difficult for everyone. The main reason behind this problem is that the housing market is expensive and unaffordable for many people. Moreover, the price has been surging from time to time, which is incomparable to the rise in income. Take a look at Jakarta, for example, the biggest city in Indonesia, has the highest price of accommodation and housing compared to any other city. The average price for a medium-sized house with two bedrooms attained one billion rupiahs while some other regions still made up around 300-500 million rupiahs. The mortgage scheme by the bank may provide an alternative solution to minimize the problem, especially for the younger generation. However, it’s kind of difficult to obtain a loan if you are not a worker in the formal sector with a regular income. Meanwhile, the reality that 90 percent of the workforce in Indonesia is from the informal sector affected the problem in a more complex situation.
It is evident that relying on the market mechanism alone does not work; there should be a role for the government in handling this situation. The most popular policy based on evidence is giving subsidies to its citizens. The Government of Indonesia has been implementing home ownership credit financing, also known as KPR. The program is designed to support homeownership for low-income individuals at affordable prices, including a safe building. Even though there is still a need for lots of improvement, such as reducing target errors, we cannot set aside that the KPR program is moderately effective. In addition to this, creative funding schemes for the informal sector should be taken into consideration in the next policy planning.
To summarize, it is undeniable that most people cannot afford a house for living because of the high price of housing, which is incomparable with the average income of individuals. While the market and the bank cannot provide an effective solution, strategic policies by the government can play a vital role in tackling the issue.