Background

Indonesia is a country of over 200 million people, with 48% of Indonesians living in urban areas.  Prior to the 1998 economic crisis, Indonesia had been remarkably successful in enabling the housing industry to meet the needs of the low income population.  However, since 1998, this has slowed down, and in Indonesia evictions of low income residents have occurred to make room for large-scale commercial developments.  Nevertheless the government at all levels is committed to housing and slum upgrading - the Kampung Improvement Programme (KIP) has achieved significant results in slum upgrading and infrastructure improvement.

For the fiscal years 2006 – 2010, Surakarta Municipality has been implementing a significant program for improving 6,612 substandard houses in the city, whereby each eligible house receives a grant of USD 223 to help pay for repairs and upgrades. The aim is that by the end of 2010 Surakarta (also known as Solo) will be a slum free city. 

Objectives

The project aimed to provide secure land tenure, introduce land consolidation, upgrade substandard house in well-planned stages through a community based initiative of a slum cluster.

Implementation

Solo municipality granted secure land tenure and in return the community consolidated their land plot fairly and rearrange the site plan to allow healthy air circulation, utility networks, and future sanitation systems. The construction was divided into 3 stages starting from the construction of basic ground floor then continued by second floor construction and final stage would be to finish the building with quality materials. The physical design and financing package follow this staging in accordance to the community affordability levels. It involved 11 substandard houses in a total land parcel of 179.5 m2. The project took 9 months in which 6 months were spent to deal with land consolidation and community planning.  This project has been completed.

Results

Expected results include tried and tested mechanisms for providing capital financing for slum upgrading in Indonesia and for the Kratonan community; the provision of housing and infrastructure upgrading; improved quality of life in participating communities, and; and leveraged private bank participation in slum upgrading projects.

Impact

Improved living conditions for the low-income community of Kratonan.