Business Activities Stopped: What the Government Can Do to Help

Did you know that Jakarta's garbage-filled rivers, rising water levels, and subsidence have contributed to flooding in some parts of the world? Without question, Jakarta is facing urban problems such as: flooding, lack of affordable housing and green initiatives, and the worst traffic jam in the world. Even so, the property sector has shown considerable resilience. However, as Jakarta becomes increasingly less livable and unsustainable, the growth of the property sector has reached its limit.

The property sector (such as real estate and construction) plays an important role in Jakarta's economic growth. It contributes more than 20% of Jakarta's GDP and influences more than 100 other industries and creates jobs for Jakartans. As the backbone of Jakarta's urbanization initiative, it is only right to help property entrepreneurs by making their business easier rather than harder. After all, property entrepreneurs are interested in contributing to the good of Jakarta. Moreover, if Jakarta's economy grows, it will benefit their property business.

Unfortunately, this is not the core issue in this case. World Bank research suggests that Indonesia's ease of doing business index is still low compared to Kenya and El Salvador. Jakarta's rapid development in the last 36 months has shown that existing regulations, from licensing to urban zoning, may be ineffective or even a hindrance to business activity.

For example, unclear and contradictory licensing regulations have slowed down development companies from obtaining a Certificate of Fitness (SLF). Without SLF:

• A Tenants' Association to collect maintenance and service fees from tenants could not be formed. The developer must then bear these costs.
• Developers can't afford to rent out their space to banks and ATMs
• The developer was unable to process the Sale and Purchase Deed for the buyer, so the buyer could not get a loan from the bank.

Given these issues, Jakarta's high-rise and high-density building owners have agreed to reconcile the issues affecting their industry. They realize that individually, they cannot convey this to the government so they choose to voice this issue collectively. Therefore, the Jakarta Property Institute (JPI) was formed as a form of advocacy that bridges the members' interests to the city government to support property development in Jakarta, which will ultimately drive economic growth.

Given these issues, Jakarta's high-rise and high-density building owners have agreed to reconcile the issues affecting their industry. They realize that individually, they cannot convey this to the government so they choose to voice this issue collectively. Therefore, the Jakarta Property Institute (JPI) was formed as a form of advocacy that bridges the members' interests to the city government to support property development in Jakarta, which will ultimately drive economic growth.