John Larsen

Life-Cycle Data and its Importance to the Provision of Housing in Indonesia Abstract In recent years new housing programs were developed in Indonesia, however more can be accomplished in this area with the help of more detailed housing and population data. As people progress through the different stages of life, their housing needs also change. With Indonesia still experiencing a sizeable housing backlog, data and research designed to consider changes in housing needs over time can help the Indonesian government, housing policy analysts, and developers create targeted policies and programs. In order to be successful in this endeavor, however, housing should be classified by the benefits it can provide to humanity first rather than its importance to economic growth. This is most easily accomplished by classifying housing as social policy as opposed to infrastructure. Housing life-cycle data, often referred to in the industry as “housing career data”, aided other countries in their quest to provide adequate housing to their citizens. Comparing housing career data from Indonesia with that of other countries revealed how subtle cultural differences and other factors influence housing needs, emphasizing further the value of continuing to update and elaborate on the data analyzed in this research. Keywords: housing career, housing needs, social policy, Indonesia 1. Introduction In recent years, new, more detailed data has been collected in Indonesia, which can provide guidelines for the creation of targeted housing programs. This new data is unique because it places more focus on the concept of change over time. The people profiled were from different locations and represented different age groups to give a full picture of the housing situation in the country. Indonesia already has some successful housing programs and the government has taken additional action recently to address the current housing shortage. However, as in many other countries the programs that exist are not able to provide enough relief, especially due to Indonesia’s status as the fourth most populated country in the world with more than 263 million people (Countries in the World by Population, 2017). Also, during 2017 the Indonesian population is expected to increase by more than 3,355,000 people (Indonesia Population, 2017). With the World Bank estimating that 68 percent of the Indonesian population will be living in cities by 2025, the importance of housing program development will continue to grow as rapid urbanization continues (Indonesia's Urban Story, 2016). Due to this, the research presented in the following sections was conducted in order to discover how to best cover the housing needs of the Indonesian people. More specifically, it was designed to present information about some current housing programs and to view current statistics about housing and population demographics to provide the best options for the future. As the population of Indonesia as well as that of the world as a whole shifts more towards city life, new policies will need to be designed in order to reflect this change. However, this will only be possible if accurate population housing data is analyzed in order to assess what is necessary to achieve housing goals. The development of housing programs from the analysis of housing related data is not only important for the purpose of providing affordable living spaces for the people of Indonesia, but also because of the relationship between housing and other factors that together play a significant role in determining the prosperity of individuals within the country, as well as the prosperity of the country itself. 2. Method The amount of population data collected was just enough to serve the purpose of this research. Qualitative inquiry “employs different philosophical assumptions; strategies of inquiry; and methods of data collection, analysis and interpretation” and even though the processes for qualitative and quantitative research are similar, qualitative research depends on text data and draws on more diverse strategies of inquiry (Creswell, 2009, p. 184). Another key characteristic of qualitative research is that researchers collect data in the field, often through interviews conducted in person rather than taking individuals to a lab. Qualitative research projects also usually involve multiple forms of data like interviews and documents rather than just one data source (Creswell, 2009, p. 175). The housing career data included in this research includes information collected in the field and much of the paper, especially chapters four and six, relies on data collected from documents, books, and previous reports. Due to these facts about the data included in the subsequent chapters, it can be determined that this research project is quantitative in nature. 3. Current Housing Programs and Laws a. Public Housing Savings (Tapera) Law The Public Housing Savings (Tapera) bill was passed into law early in 2016. This law is an attempt to address the housing backlog issue in Indonesia, as the Indonesian Real Estate Association (REI) states that developers can only build 300,000 to 400,000 houses annually. This number falls well below the 800,000 needed to begin to address the housing issue according to the Ministry of Public Works and Public Housing (Paramita, 2016). The Tapera Law is also designed to enable more people in the working population in Indonesia to be able to afford a home by providing long term financing for housing. The program will start sometime in March 2018 with a specific date not yet set, although it is expected to require contributions from employers and employees (Indonesia: New housing fund to require employer and employee contributions, 2016). The most important details that are available about the program are as follows: • Employers will be expected to register all employees who are at least 20 years old (or married and who earn at least the minimum wage for the Tapera program, including foreign workers who have working visas for longer than 6 months.) • Independent workers earning more than minimum wage also have to register for the program • Contributions to the program will be paid into members’ individual accounts at the custodian bank. The initial draft of the law said that the contribution rates would be a percentage of pay, 2.5% from the employee and 0.5% from the employer but the final version of the law did not include specific rates, and the final rates are still being decided. • There will be a management board, BP Tapera, which will oversee the investment manager, custodian bank, and financial institutions • The employee will have a choice between conventional funds and Islamic funds • The funds for home construction or improvement will be available to employees who have participated in the program for at least 12 months, make below a certain income, and who do not own a home yet. Those who do not meet these requirements will receive their contribution to the program plus an investment return when they turn 58 (Indonesia Introduces 'Tapera Law': New Housing Fund that Requires Employer and Employee Contributions, 2016). Employer costs will increase because of this program, but the hope is that it will allow people making lower incomes to be able to afford a home. Due to rising costs in employing workers, the law has been met with some opposition from employers. b. Bapertarum The Bapertarum-PNS (Housing Savings Advisory Board for Civil Servants) program will be merged with the Public Housing Savings (Tapera) program in 2018. Until then BapertarumPNS will continue to manage the Rp 800 Billion per year housing fund for government workers (Susanty, 2016). c. KPR-FLPP The FLPP program was established in 2010. This housing loan program (Sejahterah KPR) offers credit or financing for home ownership which includes mortgages issued by a bank executive, conventionally or with Islamic principles and is supported by the Housing Financing Liquidity Facility (FLPP) (Final Report: Preparation of Policy Documents and Strategies for the Provision of Housing through the Housing Career System, 2016). The purpose of the liquidity is to allow for citizens with income below Rp 4 million to obtain a home loan with low interest and an affordable down payment. However, the government’s allocation of between Rp 4 and 5 trillion has not been enough to address the housing problem for low-income Indonesians and in 2014 the recorded housing backlog in Indonesia was 15 million units (Paramita, 2016). 4. Housing and Human Rights Adequate housing is something that most people around the world strive for, and many people spend years saving money with the hope that eventually they will be able to afford to purchase their own home. In fact, housing is not just a dream for most of us, but it is considered to be a human right. On December 7, 1987 at the 93rd plenary meeting the United Nations General Assembly officially drafted a realization of the right to adequate housing due primarily to the fact that the Universal Declaration of Human Rights and the International Covenant on Economic, Social, and Cultural Rights “provide that all persons have the right to an adequate standard of living for themselves and their families” which includes adequate housing (United Nations General Assembly A/RES/42/146, 1987). The UN committee on Economic, Social, and Cultural Rights states that the right to adequate housing should be described as the right to live somewhere in peace, security, and dignity. Adequate housing must be protected from forced harassment or eviction, and must include safe drinking water, adequate sanitation and energy for cooking, heating, lighting, and food storage. It must be affordable to the extent that the cost does not threaten the occupants’ ability to enjoy other human rights, and must have protection against the elements and provide physical safety. Housing must also be accessible for disadvantaged groups of people, and it must be located in a place which is close enough to schools and the workplace. “Lastly it must be capable of taking into account the inhabitants expression of cultural identity” (The Right to Adequate Housing, 2015, pp. 3-4). In Indonesia, the UN resolution on the right to adequate housing has been adopted officially, as “Indonesia’s Constitution and additional legislation guarantee the right to adequate housing as defined by international human rights law” and the government has also “reiterated its commitment to the progressive realization of the right to adequate housing” (Rolnik, 2013, p. 4). The Indonesian government issued “Law Number 1 of 2011 on Housing and Habitation (‘Housing Law’), with the purpose of fulfilling the public needs for housing” (Shalmont). This law as well as the more recent Public Housing Savings (Tapera) Law were passed with the right to adequate housing in mind. The fact that in recent decades housing has begun to be recognized as a human right that governments should be obligated to provide has encouraged countries around the world, including Indonesia, to develop policies that will allow this right to become a reality for their citizens. 5. The Data The urgency of collecting data and understanding how best to reduce the housing deficit in Indonesia is expressed in the effect the current situation is having on the poorest citizens. Housing backlogs cause the prices of the homes that do exist to go up, making it more difficult for low-income people to afford them. Currently “the bottom 40 percent of households in Indonesia cannot afford to buy a home on the formal market.” First and foremost, the situation requires public housing policy designed for the needs of the country as well as an increase in housing production (Input for the Setup of a Housing Career System, 2015). More specifically, a more targeted approach is necessary, in which housing needs for specific life stages are also taken into account. The data included in this section represents the importance of providing housing that more accurately reflects the changing housing needs throughout one’s life and can help in the development of policies that include rents and mortgage rates that are feasible for different deciles. Different situations in life can also influence where people live and what type of housing they can afford. The population information below, collected in the diverse locations of Surabaya, Makassar, and Palembang, reflects this concept. The data presented as part of this research focused on large cities because they present the biggest challenges, so if housing problems in large cities can be solved then those in the smaller cities and villages can be also. Table 1: Housing Related Population Data from Indonesian Cities Name : Ibu Juwariyah Name: Bapak Fauzan Age : 56 years old Age : 42 years old Job : casual laborer Job : entreprenuer Ethnic group : Javanese Ethnic group : Javanese Husband died, 3 children Income : Rp 1 million/month Address: Rusunawa Siwalan Kerto Size of living space : 24 m2 Occupancy status : renter Rental price : Rp. 38.000,-/month excluding water and electricity Married at age 13 Moved from parents’ house: age 19 (rented a house), Started working at a factory: age 22 1 child (3 years old) Income: Rp 3 million/month Address : Kenjeran Size of living space : 60 m2 Occupancy status : lives with parents (youngest Male Child) Married at age 38 Name: Ibu Mirna Age : 22 years old Job : housewife Ethnic group : Javanese Husband: private employee, 1 child Income: Rp 1.2 million/month Address: Rusunawa Siwalan Kerto Size of living space: 24 m2 Occupancy status: renter Rental price: Rp. 38.000,-/month excluding water and electricity Married at age 16 and immediately moved from parents’ house (rented a house) Name : Ibu Mintarsih Age: 52 years old Job : housewife Ethnic group : Madurese Address : Surabaya Occupancy status : owns an Islamic boarding school Moved from parents’ house : age 20 (lived in Islamic boarding school) Able to fund living alone : age 20 Name : Bapak. Muhammad Tarmin Age : 27 years old Job : trader Status : Married Address : Kenjeran Moved from parents’ house : Age 14, to Jakarta (rented, close to workplace) Occupancy status : lives with in-laws (brother-in-law lives in an Islamic boarding school) Married at age 27 Wants to own a house, but income is not yet enough and in-laws will not allow it (Input for the Setup of a Housing Career System, 2015) As can be seen from this data many factors including, age, marital status, location, income, and age at which they became independent affect the type of housing that a person needs and whether they are able to purchase a home. The following information was taken from “Executive Summary: Input for the Setup of a Housing Career System” (2015): Table 2: Affordability by Income Decile household decile - affordable household affordable price paying capacity price estimate income per estimate only per month with advance month with loans payment- - - - (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 22)(Numbers listed in millions of Rupiah) Table 3: Affordability of Rental and Ownership Rates estimated rental price per installment per selling price of month * month ** 21 110,000,000 458,333 831,-,000,000 625,000 1,134,-,000,000 833,333 1,512,-,000,000 1,145,833 2,079,100 *assuming the rental price is 5% of the value of the property per year **simulation with a State Savings Bank (BTN) interest rate of 9.75% and 15 year down payment of 30% type (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 22) Table 4: Affordability by Income Decile and Housing Type decile income D10 13,900,000 D9 7,000,000 D8 5,100,000 D7 4,200,000 D6 3,600,000 D5 3,100,000 D4 2,600,000 D3 2,100,000 D2 1,800,000 D1 1,200,000 *rent able to be paid is 15% per month **road map housing policy reform the rent able to be paid per month * 2,085,000 1,050,000 765,000 630,000 540,000 465,000 390,000 315,000 270,000 180,000 the type of installment residential able to be property paid per owned month** type of residential property rented- 5,600,000 2,600,000 1,800,000 1,400,000 1,100,000 900,000 700,000 500,000 400,000 100,000 - (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 23) The data in the graphs above shows that for many people, particularly those in the lower deciles, affording to own a housing unit or even to rent a space to live seems out of reach without some form of government funding assistance. Only those in the highest few deciles can afford to live in the better types of housing the way the system is now. The poorest Indonesians are then left completely dependent on others in order to be able to afford housing that is considered to be adequate. Decile groups 1-4 that include people considered to be poor or at least near the poverty line have a need for shelter that is very minimal in the free rent (living with parents or in-laws) or home rental categories. Decile groups 4-7 which include those considered low-income begin to have the ability to rent or own a residence. Decile groups 8 and 9 which are considered middleincome or middle class start to show variations in their housing needs. Decile group 10, the upper-income group, also shows more variation in housing needs. Unfortunately data on housing affordability based on household spending ability shows that deciles 1-7 still experience difficulty in accessing homes that are classified as type 36 or higher. This group represents 7080% of the population, so the proportion of housing stock based on the level of housing affordability is as much as 70-80% for rental homes and 20-30% for owned homes (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 23). At the beginning of this chapter housing which follows different stages of life was alluded to briefly. In the housing industry this has been increasingly referred to as a housing career. Generally the life cycle of Indonesians follows a pattern which is represented by stages, each with an age range. This has been used in Indonesia to formulate a list of appropriate housing options which change over a person’s lifetime. A description in “Final Report: Preparation of Policy Documents and Strategies for the Provision of the Housing Career System”(2016) outlines the basic proposed formula that the housing career in Indonesia will be based on according to thorough demographic data and research as well as cultural knowledge about the life cycle that most citizens follow in Indonesia. The common life cycle in Indonesia related to housing is: “18-22 years old (single), 23-30 (young couple), 31-45 (young family), 46-55 (adult family), 56-65 (pension), and finally 65+ (seniors)” (Final Report: Preparation of Policy Documents and Strategies for the Provision of Housing through the Housing Career System, 2016, p. 25). The age range of 0-18 years old is included in the graph below from the document “Executive Summary: Input for the Setup of a Housing Career System”, however it is assumed that at this life stage most people live with a parent or guardian. Table 5: Housing Needs Based on Age typology of residential site age life stage occupancy requirement 0-18 school age free rent (live with parent or guardian) 18-22 single, university, start work room, rent together studio, room, 2.5x3 22-30 young couple house, 1 room Type 21 31-45 young family house, 2-4 rooms Type 36, 45 46-55 adult family house, 2-4 rooms Type 36, 45 56-65 Pension house, 1-2 rooms Type 21, 36 65+ senior citizens house,1-2 rooms, free rent, nursing home Type 21,36 Source: analysis 2015 (Executive Summary: Input for the Setup of a Housing Career System, 2015, pp. 20-21) The Housing Needs Based on Age table is an ideal scenario; however it is less likely for each of these age groups to move to a larger house than the type that has been proposed in the table. The minimum house size for a young family should be 2 rooms, or Type 36. There are some aspects of this table which must be noted, as they influence the type of housing that is needed. For example, senior citizens could live alone, still with children, or with grandchildren. Depending on their age and health, they may still be living in a house, being cared for by their children, or living in a nursing home. Each of these possible living situations is likely to require a different type of housing. There are many other factors which influence housing type, such as occupation, ethnicity, religion, or other symbols of status, or whether someone has been a victim of a natural disaster, which can change the housing type which is needed. For this reason, the graph should be considered a general depiction of housing needs in Indonesia for various age ranges (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 21). The housing life-cycle, or housing career, is not only important because more accurate housing needs statistics are provided when the needs are graphed for different age ranges, but life-cycle is also directly related to changes in the percentage of people who own a home. Housing career is a concept that is being used more and more often in the housing industry. It describes a series of dwellings occupied by households during their lifetime (Abramsson, 2012). The next table is similar to the Housing Needs Based on Age table; however it includes economic situation as a factor, listing the decile groups as well as more detailed information about rent/ownership status. Table 6: Housing Needs Based on Age and Economic Situation Occupancy Requirement Decile 1-4 Decile 5-7 Decile 8-9 free rent free rent free rent free rent Kos (boarding house) Kos (boarding house) rent type 36 rent type 21/27 rent type 21/27 own type 36 rent type 36 own type 36 Housing Life-Cycle 0-18, school age 18-22, single, working 22-30, young couple 30-45, family (2 children) 46-55, adult family, children are rent type 36,45 students or work, family lives together 55-65, retirement rent type 21/27 own type 36, 65+, senior citizen free rent, social extension own type 36, extension Decile 10 free rent rent type 21 rent type 45 own type 45 own type 45, extension *posts in bold: need help financing as well as government intervention (Executive Summary: Input for the Setup of a Housing Career System, 2015, p. 29) Notice that within the young couple, family (2 children), adult family, retirement, and senior citizen life-cycle stages, all those in deciles 1-7 are in need of financing as well as government intervention just in order be able to afford their basic housing needs. When comparing this graph to those previously listed from “Executive Summary: Input for the Setup of a Housing Career System” pages 22 and 23 it is not difficult to see that this is true, as there is a gap between the actual rental price per month and paying capacity/rent able to be payed per month particularly for the lower deciles. For example, decile 1 is only able to pay Rp 180,000 per month on their income, however monthly rent for a home in housing type 21 is listed at Rp 458,333. According to the same graphs, all decile groups below 5 would not be able to pay the estimated rental price for a type 21 home without assistance. The housing career data has been successful in providing more detailed information about housing needs for different life stages so that exact deficits can be more accurately estimated, allowing for a more focused path to the goal of providing basic housing needs for all Indonesians, at every life-stage. Demographic data and a life-cycle plan specific to Indonesia has supported the development of a housing career plan that will continue to help the government, private developers, nonprofits, and international aid organizations to see clearly what must be done and to develop policies that will allow for more successful outcomes for the people of Indonesia. The following data from 2015 was taken in Germany and was presented in the document, “Final Report: Preparation of Policy Documents and Strategies for the Provision of Housing through the Housing Career System”. Table 7: German Rent vs. Ownership Percentages Based on Life-Cycle Type Own Free Rent Rent Single, > 65 years old 35 5 60 Single, < 30 years old 3 5 92 Single parent + children 25 2 73 Couple without children, >65 years old 57 5 38 Couple without children, <65 years old 51 3 46 Couple + children 39 2 59 Average 35% 3.70% 61.30% (Final Report: Preparation of Policy Documents and Strategies for the Provision of Housing through the Housing Career System, 2016, p. 36) Overall in 2015, 61% of the German population lived in Rental housing whereas 35% owned their own homes. The development of a housing career system complete with factual data based on different age groups has allowed for more effective housing development programs and for more accurate percentages related to rental housing vs. ownership. It can be concluded with the data above that only couples without children were more likely to own their homes than rent them. This information could then be used to conclude that overall, German housing programs are more oriented towards rental housing. That conclusion could then be used to either continue the trend towards rental housing if housing programs appeared to be effective or try to introduce the idea of ownership to some of the age groups that heavily emphasize renting if the programs seemed to be failing for those age groups or at least needed to be countered with a different type of housing program. However Germany’s heavy emphasis on rental housing and its obvious popularity based on the number of age groups that predominantly rent shows that it is not always necessary for countries to push citizens to own a home in order for the housing system to be successful. The extreme emphasis on rental housing among those who are single and less than 30 years old in Germany reflects a common trend for people in that demographic across the globe who often do not have enough income for a down-payment on a home or do not wish to settle in one place yet, opting to avoid buying a home until they are more sure of where they want to live. In the Housing Needs Based on Age table outlining the estimated life-cycle of the Indonesian population, single life ends at the age of 22, whereas the single category in The Percentage of Homeowners Based on Life-Cycle table is listed as below 30 years old for the German population. This shows a remarkable difference in age range for the same category in two difference countries. It is possible that in general, housing needs might change at a younger age for the average Indonesian than the average German, as the young couple demographic between the ages of 22 and 30 in Indonesia would require a larger space than in the single category. This is an example of why cultural and social trends as well as general differences between countries must be taken into account when developing a general housing career study, and why this research to develop housing career statistics specific for Indonesia is so important to the development of more targeted housing and housing policy. This study as well as future housing career studies in Indonesia can help reflect which programs are working well so that new conclusions and discoveries can be made about the housing situation. When combined with population numbers, housing career data will allow policy makers and housing developers to see more clearly what steps must be taken to improve the housing market for each age group based on their preferences. Many countries besides Germany and now Indonesia have studied the life-cycle of their citizens, collected data from the population, and developed housing programs based on the result of their findings. In 1976 the Rand Corporation in the United States published a paper in which the author argued that “movement through life-cycle stages brings characteristic changes in the size and consumption of households and, consequently, in their housing requirements” (McCarthy, 1976, p. 11). The research was conducted in Brown County, Wisconsin and concluded that less than 7 percent of all young single household heads were homeowners due to their small living-space requirements, relatively low-incomes, and the fact that their jobs and the place they want to live is less stable than, for example, families with children. The research also showed that more renters in the middle of the life-cycle preferred single-family homes to apartments but could not afford them. However, for people fortunate enough the life-cycle pattern related to housing generally started with renting, continued to homeownership during the middle stages, and would return to renting or remain in homeownership during the later stages depending on financial ability. In all life-stages however, owners were more prosperous than renters (McCarthy, 1976, pp. 12-14). Although this data is from 1976, many of its discoveries are still generally accurate in much of America. Today, homeownership is often considered a sign of wealth, as not everyone has the ability to afford mortgage payments. Demographers have considered the Millennial generation to be “stuck in place” until recently, as the Great Recession occurred as many of them were entering the housing market (Myers, 2016, p. 1). However, some of the discoveries from the data collected for McCarthy’s study which was cited above are also implied in the housing career data from Indonesia. Monthly installment for a type 21 home in Indonesia is Rp 831,700; however the installment payment that is possible on the salaries for deciles 1-4 is below that number. That is why according to housing career data from the Housing Needs Based on Age and Economic Situation graph, even those family age or older in deciles 5-7, with decile 7 considered close to middle income, are listed as in need of financing and government assistance in order to own an appropriate home. According to a 2016 article from The Jakarta Post, in big cities, the price of housing has been skyrocketing at a rate of 15-20 percent per year, making “the idea of purchasing their first home seem like a daunting task for most young Indonesian middle class people” (Dalimunthe, 2016). Low supply and high demand causes an increase in prices. Articles like this tend to paint a bleak picture of the housing situation in Indonesian cities even for those in the middle class, and this is especially pronounced by the fact that culturally in Indonesia, homeownership is considered to be something that is highly desired and an expectation for certain stages of life. In addition to cultural implications of homeownership, it must be noted that the amount of money that banks are willing to loan is determined by bank calculations of the total assets of the loan applicant. If assets are too low the bank may conclude that offering a loan would require them to assume too much risk. Since housing is an asset it influences the amount of loan money that can be acquired to build a business, greatly affecting those who are self-employed. In Indonesia, the workforce is still highly informal, with 63% of the workforce in the informal sector, a significantly higher number than in surrounding countries (Alatas & Newhouse, 2010, p. 56) In the opposite way, many loan applicants in the informal sector find it difficult to get a loan from a bank to purchase a home because their income is considered to be too unpredictable and unreliable. Thus, for many Indonesians the ability to make a living and the ability to acquire housing are directly linked, further emphasizing the need for a solution to housing shortages and issues with affordability. 6. The State of Housing in Indonesia, including Targets and Deficits The Indonesian government is taking steps to tackle the housing deficit and to upgrade existing housing which is considered not up to livability standards. Government housing reports published recently show signs that some aspects of the housing career concept are being considered in the plans for new housing projects, but that targets for various housing types are still not being met. The graph below shows 2016 government plans for new rental apartments, with separate categories for students, single workers, and working families that could be considered part of a housing career progression. However, the housing career concept is still not fully integrated into the Housing Ministry’s programs. Table 8: Typology of Low-Income Rental Apartment Development Assistance No. Allocation Type Number of Floors Size (L x W) (meters) Number of Units 1 Islamic Boarding Schools Ward 3 floors 37.5 x 14.9 12 units 2 Army/Police 45 (2 rooms) 3 floors 73.8 x 15.5 40 units 3 Students 24 (1 room) 3 floors (void) 59.25 x 17.6 66 units 4 Single Workers 24 (1 room) 5 floors (void) 74 x 16 114 units 5 Working Families 36 (2 rooms) 5 floors (void) 61.25 x 18.2 (Directorate of Low-Income Apartments: 2016 Programs and Activities, 2016) 66 units The government set targets related to housing, to be achieved by 2019. They were: 2014 Target for 2019 Tenancy Backlog 7.6 Million 5 Million Ownership Backlog 13.5 Million 6.8 Million Uninhabitable Housing 3.4 Million 1.9 Million Set to be achieved between 2015 and 2019, these goals to reduce the tenancy backlog by 2.1 million units, reduce the ownership backlog by 6.7 million units, and upgrade 1.5 million units that are currently uninhabitable (Public Policy Plan for the Provision of Housing, 2016) are ambitious. Unfortunately, these goals are not being reached. Housing Backlog Uninhabitable Housing Upgrade In every category of housing listed, there is a substantial gap between the overall target and the achievement (2015), target (2016), and plan (2017) outcome for-. With a priority activities list for 2017 focused on; 1.building low-income rental apartments, 2.improving the quality of uninhabitable housing, 3.building special housing, and 4.housing infrastructure development, the government seems set to attempt to remedy the situation (Progress of Activities in 2016 and 2017 Work Plan , 2016). However, a few obstacles must be overcome. One interference that is hindering progress is financing. For example, the funding required to realize the government’s strategic plan and uninhabitable housing upgrade targets was estimated to be 184.66 trillion rupiah, but the state budget only allocated 33.09 trillion rupiah, a deficit of 151.57 trillion rupiah (Progress of Activities in 2016 and 2017 Work Plan , 2016). It is simply not possible to reach these housing targets if less than 1/5th of the proposed budget is allocated. Nonetheless these numbers show that lack of sufficient funding is likely to be an ongoing issue, drawing attention to the need to earn the greatest return on investment possible. This will be easiest to achieve through the more accurate and targeted system offered by the implementation of housing programs that follow the housing career model and are based on housing career data derived from studies of the Indonesian population. This data can continue to present the government and stakeholders in the housing sector with the most accurate projections of housing need, specific to each type of housing. The lack of adequate funding was addressed as part of a “strategy to lessen the housing backlog and number of uninhabitable houses” presented at a housing sector coordination meeting in Bali in September 2016 through the suggestion to increase the role of government via human resource capacity building and increased funding for housing development. Other suggestions included improving and strengthening the role of State-Owned Enterprises related to housing, improving the allocation of special funds for housing like the stimulus for self-help housing assistance, and increasing cooperation and collaboration with the World Bank (Realization of Activities in 2016 and 2017 Activity Plan, 2016). 70% of the housing in Indonesia is self-help housing meaning that only 30% is built formally (Directorate of Self-Help Housing Work Plan-, 2016). This is a product of multiple factors one of which being the difficulty of acquiring a mortgage loan discussed in chapter 5 and another the current inability of the Indonesian government and others involved in the housing sector to keep up with demand, a problem which is easily identified by the presence and size of the housing backlog. The strategy proposed must be followed and housing career data must be viewed as what it is, an invaluable tool and necessary resource for the realization of the current objective: to equip the entire Indonesian population with adequate housing, an internationally recognized human right. 7. Housing as Social Policy Over time the debate about how to best classify housing has become more important, especially as populations in urban areas have begun to grow at a faster pace. In many countries important figures in the housing industry have pushed for housing to be classified as most closely related to infrastructure. In 2016 The Confederation of British Industry (CBI) called for housing to be included in the National Infrastructure Assessment in its annual housing report. The deputy director-general of the CBI said that the housing shortage in Britain is a problem because high prices keep people from staying in jobs and because of the “dent it puts in productivity” (Johnstone, 2016). A couple years earlier an article for the guardian argued that the Treasury of Britain did not consider housing to be infrastructure, so it has been unable to attract enough funding from the private sector. Furthermore, the article’s author said that much of the problem comes from the fact that housing has an identity crisis when it comes to policymaking, stating “what is housing? Is it a human right, like our universal commitment to the right to an education? Or is it infrastructure? Today, it is neither” (Fearn, 2014). This is just one of the conversations from one country surrounding the topic of how to classify housing, and it presents the main arguments for housing as infrastructure. When housing is linked with infrastructure, the focus is primarily on the negative impact that housing shortages have on business, stunting productivity and hindering economic growth. Infrastructure is often defined as the structures, systems, and facilities serving the economy of a business, industry, or country. In this interpretation, the issue of social need is taken out of the equation. Fearn asked the question of whether housing is a human right or infrastructure. The focus should be on developing adequate housing because this will be beneficial for humanity and help to improve sectors like health and education, not simply because it will increase production rates. The Malcolm Weiner Center for Social Policy at Harvard University defines social policy as relating to “health, human services, criminal justice, inequality, education, poverty, immigration, and labor” (About Us: Malcolm Weiner Center for Social Policy, n.d.) In “The Student’s Companion to Social Policy”, a compilation of written pieces by leading European professors in the field, the section on housing states that “housing plays a central part in debates about social policy and welfare”. The authors continue by clarifying that “unlike some areas of social policy, housing has never been a state monopoly, but responses to housing problems have involved a significant role for governments” (Mullins & Murie, 2012, p. 352) The fact that housing is described as an “area of social policy” is enough to convince many of its relevance to the subject, but the fact that homelessness and access to social housing is mentioned relates housing to poverty, one of the eight areas listed in the Malcolm Weiner Center’s definition of social policy (Mullins & Murie, 2012, p. 355). Housing has been shown to be directly related to culture, through its importance to family culture and neighborhood culture, directly relating to the achievement rate of family members, with place playing a vital role in determining the chances that families and children have to be successful. According to an article by the Center for the Study of Social Policy in Washington D.C., “Living in a distressed neighborhood exacerbates the effects of family poverty on individual educational achievement, economic prospects, health, as well as other indicators of well-being” (Affordable Housing as a Platform for Improving Family Well-Being: Federal Funding and Policy Opportunities, 2011). In other words, the livability of the housing in an area can greatly influence many other social factors, which although they appear to be individual issues, are all interrelated through their connection to housing. Additionally, poor housing conditions can cause dissatisfaction among individual families and the greater neighborhood community, negatively influencing the overall culture of the area, and decreasing the unity of the people living in the area. This can contribute to the creation of a less than ideal environment, particularly for children. Overall, quality of life in neighborhoods can be greatly affected by housing conditions there. Housing that is not considered “adequate” often carries many health risks for the occupants, providing further justification for the UN’s statement declaring that adequate housing is a human right. “Respiratory and cardiovascular diseases from indoor air pollution, illness and deaths from temperature extremes, communicable diseases spread due to poor living conditions, and risks of home injuries” are just some of the many housing-related health risks (Health Impact Assessment (HIA)- Housing and Health, 2010). Scientific evidence showing the links between housing and health has increased substantially in the past few decades, with more evidence every year, and health organizations have begun to promote improvements in housing quality and design as ways of reducing the rate of many common but often serious health problems. Some of these health problems are more common in developing countries, with data affirming that millions of people have died in developing countries as a result of “indoor air pollution caused by the burning of biomass and coal in leaky and inefficient household stoves” (Health Impact Assessment (HIA)- Housing and Health, 2010). However many housing-related health problems can impact people all across the globe and are not limited to the geographical region or the perceived economic rank of the country in which an individual resides. Evidence of this can be seen in epidemiological studies conducted both in Canada and internationally which pointed to higher rates of poor health amongst individuals who are poorly housed, specifically with heightened rates of mental illness, infectious diseases (HIV/AIDS and tuberculosis), and substance abuse related ailments and injuries (Mahamoud, Roche, Gardner, & Shapcott, 2012, p. 3). Some cities and countries have even begun providing supportive housing directed at offering services for residents suffering from specific health issues like mental illness and substance abuse, underlining the importance of place to overall health and vice versa. In the past couple of decades, more research has been published specific to the connections between housing and health in Indonesia. For example, the abstract of an article published in the International Journal of Environmental Health Research in 2003 mentioned that environmental health programs in Indonesia had focused on preventing and treating diseases affecting villagers for decades and that a primary cause of disease in these villages was due to unhygienic conditions of houses in these rural areas (Josodipoero, 2003). Research on the connections between housing, or place, and health must continue as Indonesia moves forward with new policies and projects to address housing deficits so that the housing designed provides a healthy environment for residents. Significant research has been published which analyzes the relationship between housing and education as well. Studies have shown that access to affordable housing can lead to improved student achievement. Low-income children can benefit educationally from the “supported financial stability, reduced mobility, safe and nurturing living environment, and platform for community development” that comes with access to affordable housing (Brennan, Reed, & Sturtevant, 2014, p. 1). Moving is considered disruptive when it occurs due to negative reasons such as “unstable housing situations, rising housing costs, or other difficulties” and students who move at least three times before turning six years old exhibit increased behavior and attention problems (Brennan, Reed, & Sturtevant, 2014, p. 2). People are already likely to move periodically throughout their lifetimes due to altered housing needs shaped by life-cycle changes or changes in family size as seen in the housing career data, so steps must be taken to reduce the number of disruptive moves, which can be easily avoided through the provision of affordable housing. Health issues caused by inadequate housing and unhealthy living situations can also affect the ability of students to succeed in the classroom as they can cause discomfort or distress which reduces concentration levels. Health problems due to unhealthy housing situations can also contribute to excessive and/or prolonged absences from school. Unfortunately Indonesian students are not immune to this, as the health problems that often occur in villages as described above can affect the children who live in those unsanitary homes. As research continues to uncover the remarkable influence that the housing situation of an individual has on their overall health and likelihood of academic success, procuring data that can assist in a more targeted approach to addressing housing needs must become a primary focus for governments and others with the means to create effective change. Although many are quick to see housing as an infrastructure issue due to its relationship with productivity levels and economic growth, these can still end up as a primary focus when housing is viewed as a social policy and human right. A healthy and well-educated work force is a productive workforce. If health is poor due to unhealthy living conditions, job attendance decreases and illnesses are spread at workplaces. As was stated earlier, health problems caused by inadequate housing can cause decreases in school attendance, and disruptive moves by families due to a lack of adequate low-income housing can negatively affect their children’s ability to concentrate at school, ultimately contributing to a less educated population. Essentially, if enough adequate housing is provided, health and education issues caused by housing will improve creating a healthier and better-educated society, ultimately increasing productivity and economic growth. The role of knowledge in economic growth has been studied increasingly for decades, with a 1996 report on OECD countries concluding that in that year the average unemployment rate for people with lower-secondary education was 10.5 percent and fell to 3.8 percent for those with university education. “Investments in knowledge can increase the productive capacity of the other factors of production and since these knowledge investments are characterized by increasing (rather than decreasing) returns, they are the key to long-term economic growth” (The Knowledge-Based Economy, 1996, pp. 10,11). The return on these investments will not be as great if the negative effects of outside forces such as inadequate and unhealthy housing remain, hindering the productivity of a better-educated population. Indonesia must take notice of the conclusions of studies like these as they infer that recent national budget increases in education both at the grade school and university level should be met with, at the very least, equal attention to housing so as to receive the greatest return on investment possible. 8. Conclusion Prior to the collection of data and development of research related to housing career in Indonesia, excerpts of which were included in this paper, information related to the actual housing needs of the Indonesian people was incomplete. As work and family life progresses in cycles, so too does the type of housing that is essential for success. Besides pinpointing the specific housing type that should be provided for people in different stages of life and income levels, the data itself and analysis of it presented above uncovered the amount of financial assistance needed to make these housing provisions a reality for each specific life-stage and income level. The Indonesian central government, private developers and investors, as well as NGOs can now accurately see where their money will have the greatest impact for the people who need it the most, reducing the risk of wasteful spending and displaying a clear path to the development of housing policies and programs that are more effective than those currently in existence. After analyzing the housing career data specific to Indonesia and comparing it to similar information from Germany, we were able to see some important cultural distinctions between the average populations in the countries displayed in the context of life-cycle stages, revealing why country specific housing data is necessary. In Indonesia for example, housing needs are accentuated by the fact that most of the people eligible for some sort of housing assistance are self-employed, making food or other goods and selling it out of their home. In this way, housing career has been shown to be vital to Indonesia, as having a proper home is directly related to job creation. Analysis in chapter 7 showed that the way housing is classified can determine how it is viewed in terms of its relationship to other fields, influencing policy as well as the impact it is perceived to have on the well-being of humanity. Classifying housing as infrastructure detracts from the human aspect, insinuating that the primary benefit of reducing housing deficits is its relationship to economic growth. Viewing housing as a social policy issue highlights the direct influence it has on health and education, proven by Chapter 7’s thorough analysis. Improvement to any of these fields often results in a decrease in poverty. If the goal is to follow the U.N General Assembly resolution and the Indonesian Constitution and consider housing to be a human right, it is best to classify it as related to other fields within social policy and in time an increase in production will follow. Although the data included in this research is new and will undoubtedly be influential to policymaking and program development in Indonesia for years, it is just the beginning. More studies must be completed related to housing career in Indonesia and the data must be regularly updated to account for demographic changes and any cultural shifts that occur. Its direct correlation to education and health, status as a human right, relationship to job creation and importance to creating positive neighborhood environments that allow for cultural expression all justify why the provision of adequate housing must be viewed as a priority not only in Indonesia but in all countries. 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