Affordable Housing Development

Affordable Housing
Affordable Housing Development
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Real Estate
Business Model Description

Construct affordable housing complexes for low-income population, offered through low-cost financing schemes. Examples of some companies active in this space are:

PERUMNAS, founded in 1974, is a State-Owned Enterprise (BUMN) providing housing and settlements for the lower-middle income community. It has built >600,000 housing units in >150 cities in Indonesia. In 2016, it raised USD 18.82 mn in an equity round from the Government of Indonesia.

Elang Group, founded in 2007, is engaged in housing development, building thousands of affordable housing units in Bogor and surrounding areas. The group has built >10,000 houses so far and focuses on housing project with Simple Healthy Housing (RSH) concept

PT Waskita Karya Realty, founded in 2014, operates as a subsidiary of PT Waskita Karya (Persero) Tbk (hold 99.99% stake) and invests in, owns and develops real estate properties. As of 2019, it raised total USD 137.13 mn, including USD 1.1 mn in a Venture round PT Waskita Karya (Persero) Tbk.

PT Astra Modern Land, founded in 2016, is a joint venture between PT Mitra Sindo Makmur and PT Astra Land Indonesia. It provides real estate development services.

Expected Impact

Promotion of affordable and climate resilient housing development to ensure quality accommodation for all sections of society.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
In 2020, Perumnas reported Return on Investment of 0.74% and Return on Equity of 25.96%. (20)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
Affordable housing target - 1 mn units (16) Real estate contribution to GDP - 2.94% (17)
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Sustainable Cities and Communities (SDG 11)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1) Reduced Inequalities (SDG 10)
Sector Sources
  • 1) Republic of Indonesia. 2020. Indonesia's 2020-2024 National Medium-Term Development Plan (RPJMN). 2) Republic of Indonesia. 2021. Voluntary National Review For Implementation of New Urban Agenda (Provisional Report). 3) Statistics Indonesia (BPS). 2017-2019. Percentage of Urban Slum Households (40% and Below), by Province (Percent), 2017-2019. 4) Ministry of Public Works and Housing (PUPR) of the Republic of Indonesia. 2022. Tingkatkan Kualitas Hunian, Kementerian PUPR Siapkan Anggaran Rp5,1 Triliun Pada Tahun 2022 di Sektor Perumahan. 5) Asian Development Bank (ADB). 2022. Building Resilience of the Urban Poor in Indonesia. 6) 2022. Skema KPBU, Inovasi Pembiayaan Pembangunan Infrastruktur. 7) 2022. Pemerintah Targetkan Pembangunan 2 Juta Rumah Per Tahun. 8) National Disaster Mitigation Agency (BNPB). Potential Disaster Threats. 9) Harrison, Dao. World Bank Blogs, 2017. Five lessons on affordable housing provision from Indonesia. 10) Cabinet Secretariat of the Republic of Indonesia. 2021. Wapres Dorong Peran Swasta Atasi Backlog Perumahan. 11) OECD Council on SDGs. 2019. Gender Equality and Sustainable Infrastructure. 12) Elias, J., et al. The University of Warwick, 2018. The Gendered Everyday Political Economy of Kampung Eviction and Resettlement in Jakarta: Final Project Report. 13) Ministry of Public Works and Housing (PUPR) of the Republic of Indonesia. 2021. Program Bantuan Rumah Subsidi Kementerian PUPR, Capaian Penyaluran Dana FLPP Tahun 2021 Tertinggi Sejak 2010. 14) Petriella, Yanita., 2021. Pemerintah Siapkan FLPP untuk 200.000 Rumah Tahun Depan. 15) Ministry of Public Works and Housing (PUPR) of the Republic of Indonesia. 2020. The Ministry of Public Works and Housing 2020-2024 Strategic Plans.
IOA Sources
  • 16) Ministry of Public Works and Housing (PUPR) of the Republic of Indonesia. 2021. Improving Decent Residential Services, Ministry of PUPR Distributes 25,781 Units of Subsidized Housing PSU in 2021. 17) Statista. Statista Research Department, 2021. Contribution to GDP Indonesia 2020, by Industry. 18) Bahfeini, Suhaiela., 2021. Backlog of Poor Community Houses in Central Java Reaches 419,000 Units. 19) Kementerian Pekerjaan Umum dan Perumahan Rakyat. 2022. TEMUKAN LOKASI PERUMAHAN SUBSIDI BERDASARKAN KRITERIA. 20) Perum Perumnas. 2020. Laporan Keuangan Perum Perumnas dan Entitas Anak 2020. 21) Regional Housing Summit. Identified Barriers to Affordable Housing. 22) Republic of Indonesia. 2019. Roadmap of SDGs Indonesia Towards 2030. 23) Astri, Carolina, et al. World Resources Institute (WRI) Indonesia, 2020. Land Ownership and Women Empowerment. 24) Republic of Indonesia. 2021. Voluntary National Review: Annexes. 25) Republic of Indonesia. 2021. Voluntary National Review. 26) United Nations Environment Programme (UNEP). 2021. 5 Ways to Make Buildings Climate Change Resilient. 27) United Nations Environment Programme (UNEP). 2020. 2020 Global Status Report for Buildings and Construction: Towards a Zero-emission, Efficient and Resilient Buildings and Construction Sector. 28) Ministry of Public Works and Housing (PUPR) Republic of Indonesia. 2020. Ministry of Public Works and Housing Regulation No.23/2020 concerning the 2020-2024 Minister Strategic Plans. 29) Republic of Indonesia. 2021. Presidential Regulation (Perpres) No.18/2020 concerning the 2020-2024 National Medium-Term Development Plan. 30) Republic of Indonesia. 2016. Government Regulation (PP) No. 64/2016 concerning the Development of Low-Income Community Housing. 31) Ministry of Public Works and Housing (PUPR) Republic of Indonesia. 2020. Ministry of Public Works and Housing Decree No.242/2020. 32) Republic of Indonesia. 2017. Government Regulation (PP) No. 13/2017 concerning Amendments to the Government Regulation No. 26/2008 concerning the National Spatial Plan. 33) Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) of the Republic of Indonesia. 2018. Minister Regulation No.1/2018 on Guidelines for Spatial Plans. 34) Indonesia Investment Coordinating Board (BKPM). 2021. BKPM Regulation No.4/2021. 35) Ministry of Public Works and Housing (PUPR) Republic of Indonesia. 2021. Ministry of Public Works and Housing Regulation No.35/2021 concerning the Ease and Assistance in Housing Financing for Low-Income Communities. 36) Ministry of Finance (Kemenkeu) of the Republic of Indonesia. 2022. Ministry of Finance Regulation No.6/2022, revoking Regulation No.103/2021 concerning Value-Added Tax on the Delivery of Land Houses and Residential Units For Fiscal Year 2022. 37) Pusat Pengelolaan Dana Pembiayaan Perumahan (PPDPP PUPR). Konsep Backlog. 38) Pusat Pengelolaan Dana Pembiayaan Perumahan (PPDPP PUPR). Grafik Penawaran dan Permintaan Per Provinsi.