INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 6, ISSUE 07, JULY 2017 ISSN 2277-8616 137 IJSTR©2017 www.ijstr.org CThe Effectiveness Of Rental Housing Finance For Low-Income Households In Sombo Rental Flats, Surabaya Annisa Nur Ramadhani, Mimin Aminah Yusuf, Rika Kisnarini, Dewi Septanti, Happy Ratna Santosa Abstract: Fullfilment for the needs of housing is a priority that cannot be suspended, especially in urban areas of developing country whose population continues to increase because of the rapid urbanization. Indonesia as the developing country still has a fairly high backlog approximately at 7.6 millions unit house in 2014, most of them are low income people. The Government has several plan in striving for the scarcity of housing. One of them is the development of rental flats which have goals for the social housing fulfillment for low income people and increase their housing affordability by lowering the rental rates. The intention is to assist the low income people save their money to buy their own homes. But in facts, there are several constraints related to this rental flats finance, such as late payment by the residents, uncontroled right transfer, and the tariff adjusted to the ability of the inhabitants, can not cover the cost of the physical building management and maintanance. This study aims to evaluate Sombo rental flat finance for for low income people, in which the data are collected through in depth interview, observation, and documentation. The results of several qualitatively descriptive analysis show that the effectiveness of rental flat financing in the aspect of the purpose and goal to facilitating low income community needs of housing is quiet accomplished. Beside that, the organization is also well structured and have the efficient human resources. But Sombo rental flats effectivenes is relatively low in the aspect of profit ability, rental financing program, and in the enforcement of rules and regulation. The main problem is in the arrears of residents rental payment and the deficiency for maintanance cost so it has to depend on the city government subsidies. The rental finance constraint are caused by several factors, which are historic factors, resident’s factors, and the vision and commitment of the city governme nt to facilitate housing for low income people in Surabaya City. Index Terms: Effectiveness, Housing Finance, Low Income Rental Flats, Sombo Rental Flats ———————————————————— 1 INTRODUCTION Housing is one of the basic human needs, so then the fulfilment for the needs of housing is a priority that cannot be suspended. In developing country context like Indonesia with a large number of population (over 200 million people), housing problem become a serious matter. Especially in urban areas as the population increases from the village because of the urbanization trend nowadays. On the other hand, the communities have limited capacity to cover the cost of housing procurement, because they can not afford legal land in the city center, so low-income people occupy the land illegally along railways, cemeteries, high cliffs, river banks and other abandoned land. The action resulted in the emergence of squatter settlements which is the land that is not assigned for occupancy that is not theirs [1]. Based on a study conducted by the Ministry of Public Works and Housing of Indonesia in 2014 it is known that the backlog of the current housing needs reach 7.6 millions unit in 2014. Beside that the house that has been built by people all over Indonesia around 3,4 million houses are houses with unfit conditions [2]. Looking at the data above shows that the ability of the Government in the provision of housing, especially for Low-Income Communities through the formal market is still low. The data in 2006 show that 68 percent of Indonesians earn homes by building their own, while 15 percent of people buy new homes from formal markets. The rest through corporate allocation and transfer of rights [3]. From year to year the gap between the needs and the provision of houses still occurs. From the various obstacles faced, especially by middle and lower income communities, due to the low purchasing power and limited access to the housing finance system. The terms housing and settlement are often identified even though they are not the same. Housing is a group of houses that function as a residential environment and equipped with the facilities. Settlement is dominated by housing area with main function as residence equipped with infrastructure, environment and work place (limited) to support livelihood so that the function of the settlement can be efficient or effective [4]. The Government in striving for the scarcity of homes for the low income group of people by arranging the planning and financing patterns of housing for low income groups. The development of vertical public housing (flats) is one of the alternative solutions to the housing problems and settlement needs, especially in urban areas whose population continues to increase. One of them is Surabaya City which is the capital of East Java province. The Surabaya City has approximately 333,063 km² area with a population of 2,909,257 people (2015). Surabaya also is metropolitan area surrounded by the small city called Gerbangkertosusila (Gresik, Bangkalan, Mojokerto, Surabaya, Sidoarjo, Lamongan) with a population of about 10 million, is the second largest metropolitan area in Indonesia after Jabodetabek. With a very high population density, Surabaya City is highly required in the development of rental flats public housing as a solution to overcome the problem of providing decent housing, especially for low income people. The phenomenon is, If reviewed directly, some of the rental flats management in Surabaya did not escape the problems that hampered the achievement of the initial goal development of rental flats. One of the problems that often happens is the difficulty of rental flats managers in dealing with the late payment of rental fltas and control of the residents who _____________________________  Annisa Nur Ramadhani, Mimin Aminah Yusuf, Rika Kisnarini, Dewi Septanti, Happy Ratna Santosa  Annisa Nur Ramadhani and Mimin Aminah Yusuf are currently pursuing masters degree program in Architecture Department at Sepuluh Nopember Institute of Technology Surabaya, Indonesia  Rika Kisnarini, Dewi Septanti, and Happy Ratna Santosa are currently a lecturer in Architecture Department at Sepuluh Nopember Institute of Technology Surabaya, Indonesia