ANALYSIS OF THE GAP BETWEEN DEMAND AND SUPPLY OF VERTICAL HOUSING IN MAGELANG CITY, INDONESIA: AN SEM ANALYSIS

ANALYSIS OF THE GAP BETWEEN DEMAND AND SUPPLY OF VERTICAL HOUSING IN MAGELANG CITY, INDONESIA: AN SEM ANALYSIS

The growing population has led to increased demand for housing in Magelang City, Indonesia, especially for the low-income society. Despite the efforts of the local government to provide housing aid through vertical housing, the demand for vertical houses is still relatively low, as indicated by the low occupancy level of the currently available vertical houses. This paper applies the SEM to analyze the gap between the demand and supply of vertical housing in Magelang City, Indonesia. The data is collected using questionnaires distributed to respondents eligible for housing aid in Magelang City. The analysis is conducted using four latent variables: socioeconomic, perception, promotion, decision, and applying Confirmatory Factor Analysis (CFA) with three additional variables on the supply side: price, facilities, and occupancy. This paper shows that from the demand side, the decision to choose a vertical house is affected mainly by the perception of the vertical house. Meanwhile, from the supply side, facilities play a crucial role in determining the occupancy level of the currently available vertical houses. These two variables explain the gap between demand and supply of vertical housing in Magelang City. The result also suggests that promotion might be a valuable tool to correct society's perception.