The Case for Closer ASEAN Housing Cooperation

Efforts to strengthen cooperation within the ASEAN region have intensified in the recent years, with more expectedly to follow. In apparent response to the increasingly competitive global regionalization, ASEAN member countries have begun envisioning an ‘ASEAN Community’ by the year 2020. Three main pillars for closer cooperation have been recently developed, namely the Security Community, the Economic Community and the Socio-Cultural Community. Moreover, a ‘roadmap’ for the integration of 11 economic sectors has also been intensively discussed. Despite all of these, however, the issues of housing and possible strengthening of cooperation in achieving housing for all in the ASEAN region have hardly been gotten formal attention.

Often overlooked by public policy makers, housing is actually a critically important aspect in development. The most commonly shared concern in housing is that it is one of the basic needs beside foods and clothes. Other common view of housing is its economic face in the form of property sector, a stimulating sub-sector in the economy that can generate other economic activities such as building material and related service industries. However, housing is more than just property. It also possesses a socio-cultural role in the growth of individuals, families as well as communities. Good housing has been reported to contribute positively to wealth accumulation, health improvement, education enrichment and even strengthening of social cohesion. In other words, those who are lucky enough to live and grow up in decent housing units in good environments tend to have better lives than those who are not. And in the ASEAN region, unfortunately the latter constitutes the majority except in Singapore, Malaysia and Brunei where more people have been able to live in more-than-decent housing units.

Moreover, housing should not only be associated with landed houses because there are many other forms of housing such as apartment units, town-houses, shop-houses and the like. And discussing housing cannot only limit to the physical buildings but should also include the necessary physical as well as economic and socio-cultural environments within which the housing units are situated. This is where the notion of human settlements is often used in lieu of housing. This is also where housing issues become critical aspects in urban planning and environmental management. Some scholars have even gone further to suggest that housing can also be seen as a never-ending process of production and development of humanity.

As indicated, the main problem faced by most ASEAN countries is the inadequacy of housing, both in terms of quantity and quality. This has everything to do with the gap between the rising costs of housing provision and the people’s limited affordability. This also relates to financial mismatch between long-term nature of investments in housing and the mostly short-term sources of money. More than just economic and financial, the problem of housing has also political, social and cultural faces of it. Successful governments have used it as a tool for political supports while others have practically overlooked its importance. While the private sector tends to emphasize houses’ exchange value and ignore their use value – and therefore does not care whether the houses it builds are used or not as long as they are sold – the communities also forget to use their own potentials to work together as was the case in the past. The overall result is a misallocation of scarce resources and a mounting housing backlog.

Indonesia, for example, is facing a housing backlog of more than six million units. Furthermore, many of the existing housing units – both in urban as well as in rural areas – are in unhealthy or unsuitable conditions. And because the number of households needing housing units increases every year, it will take many years of continuous hard works and comprehensive undertaking for even the now-forgotten One-Million Housing Program to achieve the ideal of decent housing for all in Indonesia. The progress of that program was not encouraging with housing industry failing to produce even one-fifth of the target. One of the results has been the proliferation of slums and squatters. To make things more worrying, consistency in housing policy has not been a feature in Indonesin housing development. With the One-Million Housing Program now seems to have been forgotten, the Ministry of Housing has just launched the 1000-tower low-income high-rise housing program.

With backlog reportedly to be in the neighborhood of four million units, the housing situation in the Philippines is not that far different than the one faced by Indonesia. Meanwhile, Thailand has apparently been doing better with some innovative initiatives (the original idea of One-Million Housing Program in Indonesia came about after a visit to Thailand by the then Director General of Human Settlements in mid-2003), although housing problems are certainly not entirely solved. The housing situations in other Mekong River countries – Vietnam, Cambodia, Laos and Myanmar – are generally still less developed with limited supply from the formal private sector, if any. As these latter countries began to develop, industrialize and urbanize, the issues of affordable housing will certainly come into view in the near future.

In the meantime, as also indicated earlier, the housing conditions in Singapore and to some extent Malaysia and Brunei are in much better shapes. Most, if not all, Singaporeans can be considered well-housed, whereas people in Malaysia and Brunei have increasingly been able to afford better housing along with the increase of their economic wealth, the improvement of their public service and progress of their housing industry. For example, Malaysia’s National Mortgage Corporation, the Cagamas Berhad, has been widely reported to function well as a secondary mortgage facility (SMF) and therefore increase the accessibility and affordability of housing to ordinary Malaysians. Indonesia, as a comparison, has so far not been able to develop the same facility, prompting the new Minister of Housing to pledge that the facility’s establishment is his immediate priority.

Looking at such diverse housing conditions in the ASEAN countries, one cannot avoid considering these two following points. The first point is that it will be difficult to imagine a well functioning ‘ASEAN Community’ in the year 2020 if such a wide gap in housing conditions remains or only slightly decreases. If the envisioned ‘ASEAN Community’ lies in a territory where barriers are limited, if not inexistence, people will have the temptation to move from places where living conditions are poor to the better ones. If this happens, population pressures will be on member countries with better living conditions whereas the other members may also face different kind of problems such as brain drain or under-development. While this may be a simplistic illustration, it indeed provides the basis for an argument that it will be difficult to imagine an ‘ASEAN Community’ without seriously considering a much closer and more systematic cooperation in the housing sector.

The second point is more pragmatic and less visionary. It argues that such diverse housing conditions in ASEAN inevitably provide big opportunities for closer cooperation among the players and decision makers in the housing sector that will benefit all stakeholders, with or without the envisioning of an ‘ASEAN Community’ by the year 2020. Indonesia and others may learn about the peculiarities of establishing a secondary mortgage facility from Malaysia, while on the other hand the Malaysian counterpart may expand its area of services. Similarly, Vietnam and others may learn from Indonesia on the good and bad experience of its award-winning but now discontinued Kampung Improvement Program, while others may learn from the Philippines’ ‘Bayanihan’ micro-financing practices that have helped poor people to develop their welfare and afford better housing. Business enterprises in the region’s housing industry can also develop business cooperation among themselves. In such a way, limited resources in the region can be utilized more efficiently and reinventing-the-wheel kind of efforts can be avoided.

The cooperation can and should go beyond sporadic exchanges of knowledge and experience – something that have actually been conducted by the ASEAN Association for Planning and Housing (AAPH), an ASEAN affiliated non-government organization – in the past 25 years of its existence. Other modes of cooperation should be seriously explored and implemented. This can be in the form of more systematic technical assistance, financial aids or supports, joint programs or actions and business alliances. However, such closer forms of cooperation – except the last one – need more continuous interests and consistent supports from the governments of ASEAN member countries as well as from the ASEAN Secretariat. After all, the main role of the governments in the housing sector is not to build the houses but to create an ‘enabling environment’ for the private sector and the community to make decent housing available and affordable for all.

(Wicaksono Sarosa is a former Secretary General of AAPH. The views expressed here are his own)