Housing ownership and affordability among

low-income society in the poorest sub-

district of Semarang, Central Java, Indonesia
Cite as: AIP Conference Proceedings 1818, 020019 (2017); https://doi.org/10.1063/1.4976883
Published Online: 10 March 2017

Lulut Indrianingrum

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© 2017 Author(s).
 Housing Ownership and Affordability among Low-Income
Society in the Poorest Sub-District of Semarang, Central
Java, Indonesia
Lulut Indrianingrum1,a)
1
Architecture Engineering Program, Civil Engineering Department, Engineering Faculty,
Universitas Negeri Semarang, Indonesia
a)
Corresponding author: lutyindria@gmail.com

Abstract: The Government has intervened to deal with various affordable public housing programs, as well as financing
programs for Low Income society in Indonesia. The characteristics of this society in each region are so diverse, that made
the housing programs for this social segment uneasy in reaching the right target. Regulation of Housing and Settlement
No. 2/2001 has mandated that the State are obliged to implement a habitable public housing for people, especially for the
low income society. The purpose of this study is exploring the low-income residents’ preferences and affordability of
home ownership for their families in the poorest sub-district of Semarang. Aspects of studies include family conditions,
financing, location, housing type and price. The research used a descriptive method to analyze a set of questionnaire
data, distributed to low income residents in Sub district Tanjungmas, which isthe poorest sub district in Semarang. The
results showed that the respondents developed a vision of home ownership by saving their money for the allocated
housing budget and taking a bank installment. They tended to plan to get a house in their current neighborhood or nearby
or anywhere else with the same price range. They really understood that, in order to get a better home and neighborhood
they have to pay for higher prices. Therefore, their housing criteria or standards were set based on the quality of life in
their current residential area, and should be located in a township (kampung).

INTRODUCTION
Housing becomes a priority in every household around the world. Consumers, especially low-income groups,
find it harder to access appropriate and adequate housing at an affordable cost in countries including Australia,
Canada and China (Beer, Kearins,& Pieters, 2007; Chen, Hao,& Stephens, 2010; Purdy, 2003). As a part of Asian
countries, Indonesia’s government regulated a decent and affordable housing as one of priorities highlighted in the
implementation of housing and settlements. This is to ensure that low-income society have the same access to the
ownership of housing as much the high-income groups generally do. Low-income society are the people who have a
limited purchasing affordability, and thus needs the government’s supports. Characteristic of this society, according
to the Public Housing Ministry Regulation (Permenpera No.5/permen/M/2007), is a public group with a family
income below two million five hundred thousand rupiahs per month.
Recently, the low income society becomes a priority because of their weaknesses in accessing an affordable
housing. Some financial schemes have been offered eventually by the government to encourage developers to
provide an affordable housing for this group. Developer’s interest in providing a low-cost housing is still prominent
or evident, because the demand is also significant. It is because this group really needs a home and not necessarily
for an investment. Although there are improvements in terms of demand and supply, the supply of homes to meet
the backlog was not easy, because of the complexity of the implementation of housing and settlements, as well as
policies that do not address the existing problems. Some of the arising problems are related to the supply of land
that is increasingly expensive and limited to housing development, the homebuyer’s target does not match with

Engineering International Conference (EIC) 2016

AIP Conf. Proc. 1818, 020019-1–020019-7; doi: 10.1063/1.4976883
Published by AIP Publishing. 978-0-7354-1486-0/$30.00

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characteristics and preference of low income groups, and public apartments are not preferable for the targeted public
groups. Furthermore, the housing affordability problem seems to be embedded in the operation of a market-driven
housing system and has proved difficult to solve under prevailing policy settings (Cai, W., & Lu, X., 2015).
Cultural factors greatly affected the interest of the community to live in a public housing. Living style and
culture in a landed housing environment is very different from those in a public apartment complex. Handayani
(2013) found that only 36% of the tenants would want to occupy a multi-story public housing or flat. They did not
want to occupy a public housing for reasons related to the comfort of living in a landed housing and a tendency to
own or buy a public apartment, instead of renting one. Another evidence was based on a survey by Rumah.com in
2013, which claimed that the majority of Indonesian people (70%) preferred to buy a landed house rather than buy
an apartment . This is different from Singaporean case, where 80% of the people preferred to buy an apartment
(http://panduanbisnisproperti.com/jenis-rumah-berdasarkan-target-konsumen).
Based on the explanation above, this paper is going to analyze the housing preference of the low income society
related to the housing ownership and affordability aspects. The ownership aspect was analyzed through their visions
on ownership status and housing type preference. The affordability aspect was analyzed based on affordable
installment factor, preferably housing price and debt institution installment.

Housing for Low Income Society

An understanding of the low income society or community, according to some sources, is very diverse,
especially related to the economic and social conditions. Related to social conditions, Lewis explained that a low
income society is a group of people who experience an economic pressure, social, cultural and political in a long
period, so as to produce a culture called a poor culture (Suparlan, 1984). In addition, according to the Asian
Development Bank (ADB), a low income society are the people who do not have access in the process of
determining decisions affecting their lives. Socially, they were eliminated from public institutions; economically,
seen from the low quality of human resources due to the low level of their income, in culture and values, they are
trapped in a low work ethic, shallow mindset and fatalism, as well as their access to low environmental facilities.
Related to economic conditions, as set out by Permenpera 5 / PERMEN / M / 2007 on the income limits, this
society is a group with an income below Rp 2,500,000, - per month. Meanwhile, the 2004 National Program for
Development of Million Houses outlined that this society is a family / community that have a maximum income of
Rp 1.500.000, -. Another take on income criterion limit is one by Karamoy in Budiardjo (1998) that pictured a low
income society as those who earn Rp 10,000, - Rp. 30,000 per month per day?. From the above explanation, we can
conclude that, based on income condition, a low income society are those with income below 2.5 million rupiah per
month.
Housing program for this society is a decision process that considers various needs and abilities both
economically, socially and physically. Housing qualification includes location, which must be in a close proximity
to a workplace or a region with sufficient job opportunities. The top priority for them is the proximity of the home
and the workplace (on site), while tenure and the quality of the home is the next priority (Turner in Panudju, 1999:
9-12). This society is not overly concerned with the physical quality of the house, as long as it ensures the continuity
of life, and they also do not see the importance of tenure rights to land and buildings (Santoso, et.al, 2002: 41).

Profile of Poor Family in Tanjungmas Village

Village of Tanjungmas was in the District of Semarang Utara, covering an area of 323.782 acres. This district is
located in the coastal areas that are still affected by tidal conditions of the Java Sea. Tidal flood in the region
becomes a daily sight and affects the environmental condition of the area. The population of the Village Tanjungmas
is 128 thousand people; the number of the poor is as many as 11.859 people or 9%. Table 1 is the profile of poor
families in the District of Semarang Utara, takenfrom the Semarang Digital Information of Poor Family
(SIMGAKIN) year 2013.

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 TABLE 1. Profile of Poor Family in Villages of Semarang Utara District, 2013

Village Almost Poor Poor Very Poor

Family People Family People Family People

BANDARHARJO 2.244 7.731 469 1.520 1 2

BULU LOR 1.053 3.650 267 978 2 8

PLOMBOKAN 711 2.408 358 1.281 - -

PURWOSARI 846 2.721 80 255 - -

KUNINGAN 945 3.248 145 453 1 3

PANGGUNG LOR 55 165 3 13 - -

PANGGUNG 678 2.286 115 379 - -

KIDUL

TANJUNGMAS 2.762 9.243 787 2.612 1 4

DADAPSARI 943 3.215 210 732 - -

TOTAL 10.237 34.667 2.434 8.223 5 17

Source : SIMGAKIN, 2013

There is the Indonesia Power Plant structure in Tanjungmas sub district, which occupies a fairly extensive part
of the territory. It makes the settlement location tend to be quite far apart, and the primary arterial road divides the
village into two locations of kampung. Tanjungmas village covers two areas of neighborhoods, namely Kampung
Tambak Lorok in the north and Kampung Sidodadi in the south part. Environmental problems that are quite
difficult to handle today are the floods and land settlement. Housing conditions and infrastructures are poorly
maintained because of the periodic occurrences of tidal flood.

METHODS

This research was conducted in Tanjungmas Village, North Semarang District, Semarang Municipality, which
has the largest percentage of poor people in Semarang. The research was using comparative and explorative method
to analyze two kinds of data. The main data were derived from the questionnaires and field observation. The
secondary data were derived from institutional documents of the research area.
The sampling method used was non-random / non-probability, whereby each member of the population did not
bear the same probability of being sampled. The total population for poor people in Tanjungmas Village is 3550
families (fig.2). The sampled population was Tanjungmas Village residents who had more than one family member
in a household. There were some difficulties to find the households with the above expected characteristic because
of the limitation of the research team. In order to secure the expected sample, a snowball sampling was conducted.
The team searched and interviewed the head of a group of citizens to explore the sample, and finally obtained 62
respondents which met the desired requirements.

RESULT
The result of the collected data showed information that explains the profile of the low income society in
Tanjungmas in terms of their affordability and preferences over housing ownership. Respondents were heads of a

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family who lived in a house with more than one family member. Their income rate was in average of one million or
below, which was suitable with the characteristics of low income group (below 2,5 million per month).

Income Rate (in thousands)

80%

60% 60%

40%

20% 16%
9% 6% 7%
0%
< 100 100-200 200-300 300-500 > 500

FIGURE 1. Income Rate

Among respondents in this research, there were people with a very low income rate of 100-500 thousand rupiah
(fig. 1). This rate of income represented the livehood of the people in Tanjungmas, which mostly were fisherman,
traditional trader, low-level factory workers, even unemployed ones.

Vision of Housing Ownership % of Family Budget For Housing

100%
Purpose
80% 81% 50%
46%
60% 40%
40% 30%
20% 20%
12%
0% 1% 4% 10% 7%
Rent Own with Own with others 0% 1%
installment saving 10-30% 31-60% > 60%

FIGURE 2. Vision of Housing Ownership FIGURE 3. Allocation for Housing Purpose

Regarding the vision on housing ownership, 81% of the respondents chose to own a house by saving their
income to meet the budget. This answer was quite interesting since they had a very low income, but still showed
willingness to save money (fig.2). There seemed to be a rational choice on the saving allocation for housing purpose,
which was within a range of 10%-30% out of their monthly income (fig.3).
The saving amount was of course very little because of their low-rate income, therefore, their housing preference
was also rationally based on the total saving allocation. More than 90% of respondents chose to have a residence in a
village, rather than housing types like a cluster housing or a public apartment. Based on the unstructured interview
data, they refused a cluster housing because the price was still very expensive for them, and a public apartment was
inconvenient to live in.

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 Settlement's Preference
150%

100% 97%
50%

0% 3% 0% 0%
Cluster housing village Public apartment- Public apartment-
rental owned

FIGURE 4. Settlement Preference

Settlement that is affordable to them was clearly stated from their responses on the housing price that are within
their financial reach. On affordable housing price, more than 70% responses were in the range of 50-100 millions.
In this group, the average response was around 100 million. In the respondent’s neighborhood, the housing price
was exactly within the amount range they stated in their responses. . Respondents with a higher income, most likely
resided in Kampung Sidodadi, in average stated that the housing price was over 100 million rupiahs.
Analyzing the ability to pay the installment, most respondents answered that the installment was within the range
of 500 thousand per month (fig.5). This installment amount was the average monthly rental price in the location they
lived. Installments over 1 million was not their choice because it did not match with the amount of their incomes
(fig.6). With 500 thousand per month, in fact, low income family could already have a rental public apartment with
better environmental conditions or neighborhood. However, most respondents were not in favor of or dislike a
public apartment or public housing

Affordable Installment per Expecting Affordable Price

month (in thousands) (in million)
40% 80%
72%
30% 29% 60%
24% 25%
20% 40%

10% 20%
15% 12%
4%
0% 0% 1%
< 300 300 – 500 500 – 1.000 > 1 .000 < 50 51-100 101-150 >150

FIGURE 5. Affordable Installment FIGURE 6. Affordable Housing Price

The preferred financing options was through an installment (76% responses), although the number of
respondents who preferred full payment was also significant (19%). If we look at the fig.2, the choice to take a bank
loan was only 12%. This means that their installment option was not with the bank. When comparing this fact to
their responses on installment selection, it is becoming very contradictory. 60% of respondents were given a set of
choice of financial installment agencies; they rather chose a bank and a post office than a cooperative or a social
group (fig.7). It means that when the respondents were not faced with the financial installments, they would tend to
keep their money in a bank, rather than to use it for a debt installment—although it serves the same purpose, that is
for buying a house. But when they were faced with the installment or debt, they would choose a bank as a reliable
institution

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 Installment Institution
80%
60% 60%
40%
20% 18%
15%
0% 0%
Post Office Social group Bank Cooperative

FIGURE 7. Installment Institution

. The study reveals several emerging themes from the findings. There are: saving option for housing budget,
choices of living in a village, choices of installment and negative response of living in a public housing. The
discussion of these themes will be explored in the next section.

DISCUSSION: HOME OWNERSHIP AND AFFORDABILITY

This research focuses on the low income society’s preference concerning home ownership and affordability
based on family economic conditions. Basically, the respondents showed a vision towards home ownership. They
had the budget of home financing and the desire for owning a house, but with different affordability levels. Most
respondents had a desire to own their houses, and to not rent, by saving their money for the allocated budget. This
answer was quite interesting. Considering the structure of their income (below 1 million / month in average), they
had a vision to own a house without taking or subscribing to any loan. In addition, the option to save their income
for the housing budget was a highly creative decision, because they did not go for a bank installment option.
For them, the vision of home ownership was set based on conditions they were experiencing today. At this time,
the respondents were residing in the housing village and they felt comfortable with the social conditions in the
village. They also claimed that the house in the village has a price that is affordable for them. Through this
comparison, it is learned that they still had a vision of living in and near their current neighborhood or anywhere else
with the same price range. They really understood that in order to obtain environmental conditions and a better
home, they had to pay for higher prices. Therefore, their future housing standard was based on the quality of life
they live now or was about having a house in a village residence.
Living in a public apartment was not an option for respondents because almost none chose the public apartment
as a vision of home ownership. Most respondents were reluctant to live in a multi-story public housing because of
the inconvenient condition, cramped situation and difficulty for having to go up and down the stairs. This shows that
the socialization policy on public housing needs to be emphasized on the sociological approach within the
community. This is because a social transformation has more effects on the low income society’s preference towards
public housing.
From the description above, it showed that the respondents were affected by the condition of the house and the
neighborhood currently occupied. The standards they expected for their future home were the same as those of the
neighborhood they live now.

CONCLUSION
The low income society, when not facing with the installment choice, tended to save their income rather than
subscribe for debt. But when facing with the installment or debt choice, they chose a loan from a bank as a reliable
institution.
Their vision was still about living in current or nearby neighborhood or anywhere else that had the same price
range. They really understood that in order to obtain a more quality environmental conditions and a better home,
they had to go with higher price housing. Therefore, the standards they applied referred to the quality of life in their
current neighborhood and a home in the village complex.

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 The public housing, either renting or owning, was not an option for respondents, because almost no one chose a
public housing or public apartment as a vision of home ownership. Public housing was still considered less suitable
for the respondents because it was less comfortable for physical movement and spatial navigation, and also, the
process of social transformation was relatively difficult.

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