Increase key density of affordable housing in the city center
Spatial policies that increase density are the answer to solving the housing crisis and making vertical housing in the city center affordable. The DKI Jakarta government, which controls the Detailed Spatial Plan (RDTR), is the main player.
Jakarta Property Institute (JPI) Program Director Mulya Amri in the discussion, themed "Realizing Affordable Housing in the Middle of the City" said that Jakarta actually still has a lot of room to build vertically, especially to overcome the housing backlog problem of 1.25 million units with private funding.
He said that if you look at it, only certain parts of Jakarta have high density, while the rest is still residential. This is due to the government's restriction of floor area through the low Building Floor Coefficient (KLB).
"The low KLB limits supply, which makes housing prices very expensive. As a result, workers in Jakarta are forced to buy housing far from their workplace," he said in the discussion, a collaboration between JPI and the School of Business and Management of the Bandung Institute of Technology (SBM ITB).
He added that this will lead to urban sprawl and other urban ills such as congestion and pollution.
According to a World Bank report this year, housing prices in Jakarta are far from affordable when considering people's lower income levels. Prices are even higher than in expensive cities, such as London, New York and Singapore.
The main cause of high property prices is unbalanced supply and demand. The housing backlog in Jakarta was recorded at 1.25 million units in 2015 while the increase in the number of units is not proportional to the high number of new labor force entering Jakarta every year.
In addition to sharpening regulations, Mulya also hopes that the Jakarta government will be active in building housing, especially for low-cost flats, on land owned by the local government.
"The government has a lot of land in the city center and strategically but under-utilized, such as markets and terminals that can be developed into flats with markets underneath," he said.
To build the flats, Mulya said the government could utilize developer funds. The funds are part of the developer's obligation to build flats, which is a condition of the IPPR (Permit for Use and Utilization of Space).
Local governments require developers who build commercial housing to build subsidized flats. However, the execution of this obligation is often constrained due to lack of land. Even if it is built, the location of the flat is usually very far away such as in Marunda, North Jakarta or Rawa Bebek in East Jakarta.
"If the local government can provide land in these strategic locations, developers are happy to build flats there because if they do not fulfill their obligations, this will also have an impact on their books," he said.
In line with Mulya, Director of Land Consolidation of the Ministry of Agrarian and Spatial Planning/National Land Agency (ATR/BPN), Doni Janarto Widiantono, emphasized that to overcome the problem of slum arrangement and housing backlog in Jakarta, extraordinary/business unusual efforts are needed.
For this reason, the government encourages innovation in vertical land consolidation (KTV) policies in urban areas, especially in urban villages, areas around economic centers (markets, industries and terminals) and housing around the water's edge (rivers, lakes and coastal areas).
"DKI Jakarta alone still has around 1,000 hectares of areas classified as slums spread across 118 of 267 urban villages (44 percent) that need to be arranged," he said.
"With this vertical land consolidation policy, both the government, the private sector and the community can collaborate to develop existing areas more efficiently and cheaply. Thus, we will get a double effect of providing additional residential space while overcoming the problem of slum improvement and adding green open space (RTH) and other public facilities," he said.
In contrast to the central government, local governments that have a large share in the availability of housing are promoting the construction of flats with a 0 Rupiah DP scheme.
Head of Jakarta's Public Housing and Settlement Areas Agency Kelik Indriyanto said that the government is targeting the availability of 250,000 housing units until 2022. "But we face many obstacles, especially land availability," he said.
However, for Urban Housing Expert from the University of Indonesia, Joko Adianto, the homework of local governments is not only a matter of availability, but also the sustainability of the lives of residents of flats.
"So far, the government has only provided housing but not thought about flat operations that can improve the lives of residents," said Joko.
He added that there needs to be design and social engineering so that people who usually live in landed houses can adapt and feel at home in apartments or flats.
Jakarta Property Institute (JPI)
Established in 2015, the modern property industry. JPI conducts research, recommends innovations and management practices Jakarta Property Institute is a non-profit organization whose mission is to help Jakarta become a more livable city and encourage best urban practices from successful countries, as well as facilitate stakeholder dialog to address problems in Jakarta that affect economic growth and urban living standards. JPI members are property industry players who are ready to make an optimal contribution to realizing a sustainable Jakarta.
For more information, visit www.jpi.or.id or contact Corry (+6281226977668).
School of Business and Management ITB (SBM ITB)
SBM ITB was established in 2003 to become a business school with world standards. Today, SBM ITB is named the Best Business School in Indonesia by Global Brand Magazine, UK, and holds the highest ranking in Indonesia in Business and Economics by Times Higher Education.
With more than 3800 students and 9000 alumni, SBM ITB is ready to produce innovative leaders with an entrepreneurial mindset, develop, and disseminate knowledge about business and management for the advancement of business, government, and society.
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