Jakarta. The government defended its plan to introduce smaller subsidized housing units in urban areas, following public backlash over proposals for homes as small as 14 square meters, smaller than a typical hotel room. Officials say the concept is still in its early stages and aimed at addressing the specific needs of young, low-income urban dwellers.

The Housing Ministry said the compact housing scheme is designed as an alternative for Gen Z residents and young professionals seeking affordable homes near their workplaces. The initiative is part of broader efforts to expand access to housing in increasingly expensive cities.

“We’re responding to feedback from young people, particularly Gen Z, who prioritize location over size,” said Sri Haryati, the ministry’s Director General for Urban Housing, during a press briefing on Monday. “This is a concept under discussion, and we’re open to input from all stakeholders.”

The ministry recently circulated a draft ministerial decree to developers and industry associations such as REI, Kadin, and HIPMI, inviting feedback on the proposal. The plan is limited to urban centers, while housing in rural areas will continue to follow existing standards.

Critics have questioned whether homes as small as 14 square meters can meet livability standards. In response, Sri said the design complies with Indonesia’s National Standard (SNI), which considers air volume per person rather than floor area. A 14-square-meter unit can support a small family of up to three members, she added.

The initiative has gained backing from parts of the private sector. Thomas Jusman, Vice Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), called the compact homes a “breakthrough” for informal sector workers earning around Rp3 million ($184) per month. Current subsidized mortgage installments often exceed Rp1.2 million monthly, while the proposed units aim to cut this to Rp600,000–Rp700,000.

“These homes offer a realistic option for those who are typically excluded from formal housing markets,” Jusman said. “Young people are often living in cramped boarding houses. A small but healthy home can be a national investment.”

Lippo Karawaci, one of Indonesia’s major property developers, has completed mockups for 14- and 23-square-meter housing units. These would be built in areas east of Jakarta, such as Cikampek and Purwakarta, and priced from around Rp100 million. The houses will feature ceramic tile flooring, concrete structures, light brick walls, and basic sanitary facilities.

Fritz Atmodjo, Head of Project Management at Lippo Karawaci, said the mockups are intended to demonstrate feasibility, but the homes are not yet on the market. “We’re still in the early stages, and pricing is provisional,” he said.

The government is expected to revise regulations, including Government Regulation No. 12/2021, to accommodate the new housing concept if it proceeds. “We will ensure any changes remain aligned with the principle of decent and affordable housing for all,” Sri Haryati said.

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