Sustainability of Neighborhood Upgrading and Shelter Sector Project (NUSSP)


A high level of urbanization has significantly caused the poor and slum shelters in many urban areas. NUSSP is intended to help the government in reducing the urban poverty through partnership with the government, private sector and community Institutional. The direct beneficiaries are the poor people on the slum areas. 

The NUSSP objectives are: 1. Improve neighborhood quality for the low income community, 2. Facilitation to access housing improvement through housing micro finance and 3. Building capacity of local government and
community in formulating participative plan. 

Implementation NUSSP involving the community from the planning phase, implementation phase to the monitoring and supervision phase – which conducted with participative approach, and developing institutional community and grant supported by central and local Governmentt. 

Involvement of the community enhances ability and awareness of the community in growing sense of ownership of the infrastructure asset which they have planned and built through NUSSP project. Based on the project, the built infrastructure assets really determine the sustainability of the shelter and housing improvement. 

To build the capacity of community in operation and maintenance of the built infrastructure asset, besides facilitating trainings in construction skill, Operation and maintenance, NUSSP also establish advocacy and strengthen institutional of Maintenance and Operation Managing Team, KPP which is
the beneficiary group and user which is hoped to increase the community ability to finance the operation and maintenance cost on their own. 

The development of infrastructure through NUSSP has a significant impact on the economic condition of community in slum area because the economy activity, ease of access to information, health, education and other social facilities.

Based on the BPS data’s, March 2008, the number of poor people is 34.96 million people or 15.42% of Indonesian population, (below poverty level which is expenditure of Rp 188,931 per capita per month). It is less than the number in March 2007 which is 37.17 million or 16.58% of national population by declining of 2.21 million. The poor population in rural areas has declined 1.42 million, and 790 thousand in urban areas.
The increase of urban population or urbanization basically is caused by three factors; natural growth – birth rate higher than death rate, reclassification of rural settlements into cities, and migration from rural to urban areas. In recent decade, the birth rate in Indonesia had been able to be controlled; therefore this factor is not a major concern. The last two factors are slightly increasing along with the industrialization in Indonesia.
The development of industrial areas in cities (urban perimeter) further attracts many rural inhabitants to move to urban area. Otherwise, the economic pressure to farmers live in non-urban areas has forced them to
adapt to urban livelihoods, surely changing non-urban land into urban land.


The high level of urbanization has significantly caused the flourishing new slum settlements in various urban areas. The pace of urbanization without adequate space and infrastructures has brought settlement into over capacity and tend to become under serviced. Typically slum area must deal with problems such as: 1) size and width of the building does not meet the health and social standard; 2) high density between buildings which is prone to fire; 3) lack of potable water supply; 4) lack of capacity of electricity system; 5) poor drainage system; 6) inadequate neighborhood path system; 7) and very limited sanitation facilities. Those conditions lead to more health and social problems such as diseases, conflicts and crimes, and low economic
productivity of the citizens.

Moreover, as a result of poverty in urban area there are people who by force build their dwellings on government lands or individual lands. Althoughthey understand that they encroach on other’s property right, they reluctant to move away. Usually the land which they encroached is on strategic location, proximate to their source of income.
The vision of housing and settlement development in Indonesia is that every citizen able to fulfill their needs of decent and affordable housing in a safe, just, civilized, productive house, and develop sustainability, empowering each other in achieving regional development. In order to achieve this vision, there are three policies: 1) institutionalizing system of housing and settlement delivery with involvement of the community; 2) Realizing housing delivery as one of basic human rights to all level of community; and 3) Development of
decent, civilized, and just human settlements.
These policies, in the era of autonomous decentralization in Indonesia, face new challenges. Inherent with the autonomous local government is setting priorities for local budgets. The challenge comes from the local governments which have not considered planning in housing and settlement development as priority, especially for the low income communities. Moreover, there is a weakness in relating between planning, budgeting and
lack of capacity for implementing policies in local governments.

So far, the efforts for relieving urban slum issues have not shown a significant decrease in the number of urban slum area. The government in the past has undergone projects for urban slum neighborhood improvement. Though, several models already developed, none have been able to use as reference of pro-poor urban development – institutionally. Besides that, the urban poor – particularly those working in “informal” sectors – is difficult to access credit for built or buy a house or improve their existing house.
The weakness in settlement planning, urban development, and management system, and unavailability of access for the urban poor to the housing financing system are the reasons for the increasing of urban slum neighborhoods, and altogether it reflects the perspectives and concept which create urban planning and management system. One perspective is that poverty, income disparity, and urban slum just an excess of development, and government must responsible; on the other side, housing is regarded as individual needs. Both perspectives should be clarified as a whole and comprehensively. In response to the aforementioned problems, NUSSP offers one alternative solution as a concrete and comprehensive way.


Considering the limited capacity of government in providing budget, either at national level and local level, for the slum neighborhood improvement programs, therefore government carried out Neighborhood Upgrading and Shelter Sector Project (NUSSP) with funding from Asian Development Bank (ADB) loan. From this project, the government is expected to increase their capacity with synergic partnership with citizens in bringing slum problems to and end.
The Neighborhood Upgrading and Shelter Sector Project is using Tridaya approach. Tridaya approach is turn into action of: 1) empowerment of local government and community by delivering trainings and ongoing assistance; 2) optimization of neighborhood facilities through neighborhood upgrading and housing refurbishment by giving access for housing micro credit; and 3) local community economic empowerment by channeling this project with other related projects in that particular location.
The general objective of NUSSP is to help Government in reducing urban poverty level by partnership between government, private sector, and civil society. In detail, the objectives of this project are: 1) Improved quality of neighborhood by providing resources to the Local Government in partnership with citizens and private sectors; 2) Facilitation to the low-income community to access housing micro-credit for house improvement or development; 3) Increase capacity of Local Government and citizen in formulating participatory planning emphasized in harmonious role between public, private, and Local Government.
NUSSP is implemented in four components: 1) Improve the planning and management system to upgrade and develop new sites for the urban poor; 2) Improve access to shelter finance by the poor through Central Financial Institution and Local Financial Institutions or their branches; 3) Upgrading of poor neighborhoods and develop new sites for the poor; 4) Strengthened Sector Institutions to deliver the program.

The agenda of NUSSP implementation is a process of building mediations and facilitations. In community empowerment context, NUSSP facilitation process is carried out according to the Community Development principles. Local communities are organized. The community organization works in partnership with local government (municipality) and private sector that provide funding and technical expertise. Collectively, community is able to decide project which will directly or indirectly bring good impacts for their lives.

3.1 Activities

In NUSSP implementation, citizens are actively involved since the planning phase, implementation phase, toward monitoring and supervision phase, which overall are participative. Involvement of citizens is started with preliminary socialization that aiming at giving information about NUSSP and building critical awareness and understanding of the community so that they will be willing to carry out subsequent activities.

The next activity is community meeting in small scale, involving several local citizens in the particular kelurahan (district) to discuss information about NUSSP which has been received beforehand from the preliminary socialization. In this process, facilitator team identifies at least 3 persons from community volunteers as Community Cadre (Tenaga Penggerak Masyarakat). These Community Cadres will be trained by Oversight Consultant experts and organized by facilitator team. 

Subsequently, community meetings are held regularly in larger scale, discussing issues about community institution and leadership. These meetings are expected to result in overall agenda of community which is realistic according to community awareness and understanding on current problems. A community institution with collective leaders is then established, which called Community Self-help Organization (CSO). Until 2008, 802 (eight hundred and two) CSOs has been established in NUSSP target location.
After community institutions been established and trainings been delivered, citizens are obliged to conduct Community Self-Survey of their neighborhood (kampung). The result of this self-survey is maps and profiles low-income community in the kelurahan for each slum area. Profiles of community comprise of condition of infrastructure and houses, potency of human resources, and the needs of citizens for improvement of their neighborhood. This maps and profiles are further followed up with participatory planning process and the final result is Neighborhood Upgrading Plan (NUP).

According to formulated NUP, community itself who deliver the implementation starting from the procurement of materials, construction works, and operation of the built infrastructure. The monitoring is also conduct by the citizens itself. Involvement of community is emphasized in NUSSP with the intention of growing the community sense of ownership of the built infrastructures. This is very essential for the sustainability and continuity of neighborhood upgrading programs.
In the process of NUP formulation and in the implementation of neighborhood and houses upgrading, CSO seeks advice from the Local Government and the result is integrated into the city programs, with mediation and facilitation of Oversight Consultant and Local Coordinating Office.
On the other hand, Local government is facilitated to formulate their planning document in housing and human settlement development which is more pro-poor. It consists of the formulation of City Shelter Strategy, and Spatial Plan for Shelter Strategy. The process of formulation City Shelter Strategy goes through several public meetings, with the purpose to integrate the citizens’ aspiration about housing and settlement development into the city program.

3.2 Trainings and Capacity Building

Relevant trainings, courses and seminars are conducted for the local government personnel. Several trainings and courses have been conducted with the aim to increase capacity in project management, including Management Information System (MIS), and Geographical Information System (GIS) – which should be integrated with Local Planning System.
In order to develop skills of the community members, several trainings are carried out: basic training, strengthening training, and on the job training. Basic training comprise of Community Cadre training, CSO Basic training, financial management training for Financial Management Unit (FMU), specific training for Neighborhood Management Unit (NMU), and strengthening trainings. During operation and maintenance of the built assets (infrastructure), besides intensive assistance from facilitators, community also received training in Asset Operation and Maintenance.
A team called the Operation and Maintenance Management Team consists of community members who use and benefits from the assets, will manage the operation and maintenance of the built assets (infrastructures). With the community having skill and knowledge about operation and maintenance, it is expected that assets can reach its economic age. Besides technical skill, the team is expected to be able to finance reparation for light damages independently. The source of fund can be collected in a form of toll collected from the beneficiaries, and the amount is determined in the community meeting.

3.3 The Stakeholders
As mentioned in the preceding paragraphs, NUSSP involve at all level of stakeholders – from national government to local government and community level. The institutional arrangement of NUSSP management can be describe as follow. The executing agency of NUSSP is Ministry of Public Works – Directorate General of Human Settlements. The EA is assisted by a team of National Management Consultant. While at local level, a Local Coordinating Office, which is from relevant Local Technical Agency (Dinas), is responsible for the coordination, supervision of the project in their city. There are 32 Municipalities implement NUSSP, in 17 provinces. Several LCO from nearby cities are helped by a team of Oversight Consultant in the project implementation. The OC team assigned a City Coordinator for each city and a facilitator team. This facilitator team is the closest to the community; they assist the community for technical matters and deliver the trainings.

Source of funding of NUSSP is soft loan from ADB to the Ministry of Public Works. While Local Governments receive the fund for upgrading as grant from Central Government, but they must provide counterpart funding from their Local Budget (APBD). The amount of counter part funding is according to the fiscal capacity of each Local Government based on the Ministry of Finance. Besides counterpart funding, LG also have to prepare budget for the formulation of City Shelter Strategy, monitoring and evaluation of the subproject (upgrading) in their area, and other operational requirements.


Infrastructure development built through NUSSP has significant impact to the lives of the community in increasing income of low-income community who live in the slum area. Many locations where NUSSP is implemented have felt the impact of improved access of transportation; access of information; and access to health, education, and other basic social facilities. Since the implementation of NUSSP in 2005 up to 2008, especially for upgrading sites and community capacity building (institutional development), in many locations is found creative and innovative activities of the community in managing NUSSP implementation. Those activities bring considerable positive impact, furthermore able to promote changes in community life style.
Thus the lives of citizen improve in many aspects – economic, social, health – and become more dynamic and developed.

These practices need to be explored, particularly on the factors that support success of activities and dynamics of the participants in overcoming various problems which emerges. These practices and the outcomes are also valuable as lesson-learned and example for other participants in different cities. They could be used for analysis for the policy makers, viewers, and other stakeholders in designing and developing similar programs in the future.
For example, in Kelurahan Siantan Hulu, Pontianak; development of pathway above marsh land (called the hanging-cast / cor gantung) has give a great impact, more than just human transportation matter. The 465 meters long pathway is accessible by two-wheel vehicle, thus make easier for transporting goods from outside the kampung. In two years, the pathway has brought significant economic impact, indicated by multiplying number of warungs (small grocery stores) from 2 to 6. This ease of access has also increased the interest to build houses, proven with 10 newly built houses. This condition has consequences on the double of land price and house price compare to the price in 2006. Aware of the importance of cor gantung, community regularly maintain the pathway by cleaning it from garbage and grass, particularly on the supporting wood post.
Another example is water supply pipe installation in Kelurahan Laloeha, Kabupaten Kolaka. Responding to limited clean water supply during the dry season and the expensive of local Water Supply Company (PDAM), with facilitation of NUSSP the citizen determine to flow water from the upstream of Pondiu river which is 2,5 kilometers away from the settlement. Near the water source, a water tank is built with installation of pipe to flow the water to four public water valves distribute in two neighborhoods (dusun) in Kelurahan Laloeha. In the development, some citizens facilitated by Independent CSO built pipe network from the public water valves to their own houses on their own expenses. For the maintenance each household is tolled Rp 5.000 per month. This value is much smaller than the cost for buying clean water from PDAM (Rp 50 thousands to 70 thousands per month per household). Up to now, clean water supply pipe in Laloeha not only covering the needs of local citizens but also other surrounding kelurahan; in wet season and in dry season.
Awareness and willingness to provide maintenance funding is also shown by citizens of kelurahan Morokrembangan Kota Surabaya. Through NUSSP, citizens are facilitated to renovate a public toilet (MCK) with 4 toilets which had been unusable for a long period. Thus they use the nearby river as a place for defecation. With NUSSP funding, the proposal for the public toilet renovation is carried out; including lighting, clean water installation from PDAM and room for the caretaker. For maintenance cost of the facility, electricity cost, water supply cost, and caretaker wage, each user must pay Rp 3.000 for each usage. Every month is collected Rp 400 thousands on average at the User and Maintainer Group (Kelompok Pengguna dan Pemelihara / KPP). The awareness and willingness of the citizens to pay the toll is to avoid the same damage that causes the facility to become inoperative for a long time.


NUSSP is a participatory project. This project is an alternative approach of housing and neighborhood delivery system to provide livable neighborhood, especially for the low income community. The already developed system is ‘formal’ development by developers and the citizen buy – usually with housing credit facilitation from the bank. This system builds houses to supply new housing demand. While NUSSP use a different approach. The deteriorating neighborhood is improved – with a big share of self-build. Community themselves identify their needs and priority, which will be built according the scale of priority.
There are three main features in NUSSP. First is the participatory process, which is the method in all implementation of upgrading from planning to post construction (operation and maintenance). Second is building and strengthening community organization as a place for the process to take place at community level. Third is changing paradigm of Local Government as the motor in settlement development and strengthening its capacity

5.1 Community Participation

The participatory process could give impact in budget efficiency. With the available budget, community themselves decide what to build. Therefore the built infrastructure and facility would answer the main necessities of local citizens. At the end, citizens who involved in planning process will build sense of ownership and willingness to maintain the built infrastructures. And this could prevent heavy damages that need costly reparation which usually funded by local government. Improved conditions of access roads in many locations bring impact on the economic improvement of community, for examples rise in land price. Also there is improved health condition after the installation of water supply and development sanitation facilities.

5.2 Community Organization

Since from the beginning of pre-construction to post-construction process the community is continually involved, thus they need an organizing body. In a participatory project like NUSSP, community institution is an essential social capital. 

Citizen which organized in the CSO is a foundation for building a civil society. CSO in the future, even after NUSSP has ended, should be institutionalized in the city planning system – as an integral part of participatory planning system. CSO should be accustomed to participatory planning procedures, like Musrenbang Kecamatan, and able to speak their needs and aspiration to the Local Government. After the reformation of democracy process in Indonesia, this kind of practices must be further developed and evaluated.

5.3 Strengthening Local Government

We are aware that each Local Government has their priorities in budgeting the Local Income and Expenditure Budget (APBD). Many Local Governments have not made housing and settlement as their priority, thus budget for infrastructure maintenance is insufficient.

NUSSP offer an alternative for tackling the urban slum settlement problems – besides the already developed pattern of housing delivery system. Not only grant in form of infrastructure, Local Government obtain empirical experience in formulating participatory housing and settlement development strategy and program. The output is a City Shelter Strategy which is pro-poor and applicable.


Neighborhood Upgrading and Shelter Sector Project with the participatory approach give results in these key outcomes:

1. Positive impacts on the lives of beneficiaries in the economic, health, and social aspects.

2. Build a clean, healthy, and productive behavior of the community. This behavior is important for the efficiency of local maintenance budget of the built infrastructure.

3. Local Government capacity strengthening to deliver the project with participatory approach, particularly in housing and settlement development.

NUSSP is carried out only by 32 Municipalities in 17 Provinces in Indonesia. It is too early to judge the success of this project. Next, for the scaling up and sustainability of similar projects one thing to be emphasized in the implementation of such projects is that infrastructure built in this kind of project is not the final goal, instead it is only one of the means to get to the main goal – sustainability in upgrading projects.

source by Guratno Hartono journal

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