An Affordable Jakarta

Indonesia is one of the few countries in the world with an expensive cost of living. One indicator is Indonesia'sprice-to-income ratio, which is 13.81. This figure, which is an indicator of housing affordability, is shocking. Indonesia is far behind Malaysia and Japan, where the ratio is 9.77 and 11.25, respectively. The higher the ratio, the less affordable the house.

An example of high housing prices can be seen in Jakarta, the capital city of Indonesia. Young people (millennials) cannot afford to buy a house in the city center. This phenomenon has led to the city center constantly becoming emptier due to the uncontrolled spread of population to the suburbs.

As a result of this population dispersal, long commutes and traffic jams to get to the city center became inevitable. Empty fertile lands in the city center also turned into concrete jungles.

To curb this population spread, how can we make Jakarta's spatial layout compact and housing prices affordable for everyone?

One way to prevent house prices from continuing to soar is to increase the number of floors available. Jakarta must build upwards (vertically), because land is increasingly scarce. The average Building Floor Coefficient in Jakarta is still 2, while Singapore's coefficient is 9. Jakarta's regulations do not fully support vertical development and dense development. In other words, the building floor coefficient, which has an effect on housing supply, is deliberately limited.

The Jakarta Property Institute actively participates in dialogs on policies that will increase the building floor coefficient. JPI also works closely with experts, practitioners and local governments on TOD (Transit Oriented Development), zoning regulations, and the Detailed Spatial Plan (RDTR).