Proposed Reduction in Subsidized Housing Size Gains, Developer Support to Accelerate 3 Million Homes Program
Jakarta, 19 June 2025 — Property developers and business players have expressed support for the government’s proposal to allow smaller-sized subsidized homes. The initiative is seen as a practical step to accelerate the 3 Million Homes Program while addressing the challenges of limited land availability and low-income earners’ purchasing power—especially in urban areas.
In the draft revision of the 2025 Ministry of Housing and Settlement Areas (PKP) Decree, it is proposed that subsidized homes may be built on plots of land starting from 25 square meters, with a minimum building size of 18 square meters. Previously, the minimum land size was set at 60 square meters with a building size of at least 21 square meters.
Thomas Jusman, Deputy Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for Infrastructure and Rural Development, emphasized that the introduction of smaller subsidized housing should be viewed as an additional option—not a replacement for existing models. “This is an additional choice, not a substitute for the 36-square-meter type. The government needs to conduct wide-reaching public outreach to avoid misunderstandings,” said Thomas.
He added that smaller subsidized homes are particularly relevant in urban areas, where land prices are high and supply is limited. Thomas also stressed that while the house sizes may be reduced, livability standards must still adhere to Indonesia’s National Standards (SNI).
A Solution for Limited Land
Endang Kawidjaja, Chairman of the Association of Settlement and Public Housing Developers (Himpera), believes that revising the size criteria of subsidized homes will provide more options for low-income families. With greater variety, households can choose homes that align with their financial capabilities. “A 25-square-meter plot with an 18-square-meter building could be a solution for narrow lots that previously didn’t qualify under subsidized housing criteria,” he explained.
Bambang Ekajaya, Deputy Chairman of the Indonesian Real Estate Association (REI), suggested that small subsidized homes be prioritized within a 20-kilometer radius of city centers. He added that the segment would be ideal for young people or newlywed couples without children. “These compact homes could serve as a first home that is affordable and strategically located,” he said.
Budiarsa Sastrawinata, Director of PT Ciputra Development Tbk, pointed out that adjusting the size of subsidized homes is a realistic response to rising land prices. Developers can maintain affordability without sacrificing quality. “Livability and functionality can still be achieved even with a smaller footprint. The key lies in efficient design and accessibility,” Budiarsa concluded.
Real Model
Lippo Group CEO, James Riady, highlighted the Hunian Warisan Bangsa (HWB) housing project as a practical model for implementing smaller-sized subsidized homes. The project offers two unit types: a one-bedroom unit with a 14 m² building area and a two-bedroom unit with a 23.4 m² building area—each built on a plot of approximately 25–26 m².
Despite their compact size, these homes are thoughtfully designed with mezzanine levels and complete facilities, including a living room, kitchen, bathroom, and even a carport. “A decent home doesn’t have to be large. With smart design principles, even small homes can be comfortable, safe, and affordable,” said James.
Anita (28), a visitor to the HWB mock-up home at Lippo Mall Nusantara, shared her enthusiasm for owning a subsidized home instead of continuing to rent. “If I can pay in installments for my own home, it’s much better than paying for a boarding room every month—as long as it's still within commuting distance to Jakarta,” she said.
The small-sized subsidized housing initiative is expected to expand access to homeownership for more segments of the population, especially those previously marginalized due to limited land availability and high housing prices.
