Syndicate content

Why Disruptive Technologies Matter for Affordable Housing: The Case of Indonesia

Dao Harrison's picture

  The Case of Indonesia

Big Data. Blockchain. Drones. E-Wallets. Artificial Intelligence.
These are words that one would expect to hear at the latest conference in Silicon Valley, not during a discussion of Indonesia’s affordable housing challenges. Yet they were buzzing through the captive crowd in Jakarta at the Disruptive Technologies Workshop for Affordable Housing on September 17, 2018. The event, hosted by Indonesia’s Ministry of Public Works and Housing with support from the World Bank’s National Affordable Housing Program (NAHP), was attended by 150 participants from local public agencies, developers, lenders, and community organizations. The workshop’s goal was to explore one big question: How might Indonesia harness the power of disruptive technologies to transform its housing ecosystem?   

Indonesia cities are growing faster than those of its Asian neighbors at a rate of 4.1% a year. However, the benefits of urbanization – economic growth and poverty reduction – won’t be fully realized until the country can increase access to basic services and invest in affordable housing for its residents. An estimated 820,000 to 1 million housing units are needed on a yearly basis to meet the growing demand between now and 2030.

Indonesia’s current housing situation dovetails with the rapid development of its technology sector. There is strong start-up culture that has birthed local giants like Go-Jek, which started as a simple ride-hailing app for motorcycle taxis and expanded to over a dozen services, including food delivery, massage booking, and mobile payments. Go-Jek is currently valued at close to $5 billion. Through its ascent, it has revolutionized aspects of life in Indonesia’s cities and contributed to a booming gig economy.

Workshop participants were keen to discover: were there other budding technologies out there, like Go-Jek, which could change the way Indonesia approached housing? Here are a few of the promising pitches that were presented to the group.

iBuild
Citizen-centric mobile application that facilitates home self-construction processes

Who it’s for Households; construction workers; contractors; lenders; developers; policymakers
Why it’s needed Most housing is self-built, as it’s often the only financially affordable option. Access to credit is limited, and the construction sector is largely unorganized and informal. Government subsidies given towards self-build projects are difficult to track and highly vulnerable to fraud.
How it works Using the mobile platform, users find contractors and get quotes for projects, purchase materials, track the progress of construction projects, rank quality of services and make mobile payments to vendors.  E-wallets help ensure that government subsidies are being used for intended purpose.
Why it’s promising
  • Empowers citizens to take control of the home construction process
  • Improves transparency, organization, and competition in a huge informal construction sector
  • Aggregates data on previously informal transactions to boost inform policy-making
 
City Planning Lab Affordable Housing Suitability Tool
Geospatial planning tool that identifies optimal locations for affordable housing developments
Who it’s for Spatial planning agencies, central and local government, and developers
Why it’s needed Government-subsidized housing projects are often poorly located on multiple factors. They tend to be far from the central business district, geographically risky, and lack access to basic services and employment centers.
How it works Using the online tool, which combines geospatial and satellite data, users can generate a heat map that displays optimal locations, based on a detailed list of critical factors such as access to
Why it’s promising
  • Boosts local government capacity to identify more optimal, and thus more successful, locations for affordable housing
  • Facilitates collaborative and informed decision making
 
IBM Blockchain 
Secure, transparent, and efficient digital ledger that streamlines land titling processes
Who it’s for Low-income and informal populations; NGO’s; Land Planning Agencies; lenders
Why it’s needed Nearly 20% of urban slum dwellers don’t have formal tenure on their homes, which means they can’t access formal financing for home improvement. The process for obtaining this tenure in Indonesia is inefficient and costly.
How it works Networks of community workers survey and map land/ property ownership in a “fit for purpose” manner, and use blockchain – a public, secure, decentralized digital ledger – to streamline the mapping process and accelerate land titling.
Why it’s promising
  • Streamlines the process and reduces the transaction costs of obtaining formal tenure  
  • Provides a uniquely secure, transparent, and tamper-proof method of documentation


Property PriceTag  
Use of Big Data and new technologies to track housing supply and demand for informed decision-making
Who it’s for Public agencies; developers; lenders; other key stakeholders  
Why it’s needed Data on the housing market is currently scattered across public and private agencies, and difficult to analyze in real time and on a large scale.  
How it works Big Data is consolidated across various sources, including public and private data, and data gathered through innovative methods (i.e. trained Artificial Intelligence bots that can count the number of individual homes on satellite images).
Why it’s promising
  • Equips policymakers and companies to make more timely and informed decisions with regard to the housing market 
  • Technologies to be incorporated into the development of NAHP’s Housing Real Estate Information System, a real-time housing database used for decision-making by both the public and private sector
 
The technologies described above are just the tip of the iceberg of what was discussed at the workshop.  No longer a luxury of advanced economies, these disruptive innovations hold vast potential to empower informed decision-making, formalize the informal, and radically reinvent housing value chains to transform the affordable housing sector and improve the lives of millions. Of course, as with any technological advancement, there are serious issues to consider and plan for such as consumers’ privacy rights protection and cybersecurity in an age of interconnectedness. It’s a tricky task for any government to navigate, but one well worth the waterfall of benefits.
 

Add new comment