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Finally, someone high up in government, in this case Vice President Boediono, has gotten it right when it comes to improving and expanding the housing industry.

As he said in Bali at the 61st congress of the International Real Estate Federation that housing was a basic human need. And yet there was still an enormous unmet demand of 7.9 million homes in 2009. It doesn’t take much to see the growing gap between what is needed and what is available.

The acute shortage of housing has intensified with the rapid urbanization that is taking place throughout Asia, and is expected to get worse in coming decades. Long a rural country of villages and farmland, that image is no longer true for growing numbers of Indonesians. The lack of proper housing development is thus a major cause of urban poverty and the emergence of slums, with all their attendant problems.

Despite this, many developing countries, including Indonesia, have yet to develop a coherent framework for a successful housing policy. Urban growth and housing development have not followed a rational blueprint or design. In essence, as the vice president noted, there is growth without practical planning. We have yet to come up with a way to provide housing for low-income households.

Boediono outlined four crucial elements of a successful housing policy: rational urban planning; an efficient housing and construction industry; clear laws on land ownership; and, of course, financing.

We agree with the vice president on the need to move quickly to tackle this. But we need a holistic approach. And a bold one.

To solve the housing problem, we must first settle the issue of who takes responsibility for housing development. The government cannot and should not run away and simply throw the ball into the court of Real Estate Indonesia, the industry association, for private developers to take up as part of their social responsibility programs.

It is impossible for private developers to take on the task of housing the poor. How could some 100 developers provide seven million homes for the poor? They can’t, and that’s why the program has failed so far.

Here, we can borrow a leaf from our neighbor, Singapore, which has been successful in providing low-cost homes to its citizens. Nearly 90 percent of Singaporeans own their own homes.

When Singapore gained independence, founding Prime Minister Lee Kuan Yew made housing for all a key pillar of government policy. He introduced the Central Provident Fund to help finance both housing development and land reform. The government then created a land bank by buying land at a fixed price.

Indonesia should adopt a similar system to Singapore’s CPF scheme. It is a good investment for employers and the business community. Such a scheme could be part of social development and capital formation.