The Jakarta Property Institute and the Bandung Institute of Technology have collaborated to conduct research on "Conversion of office buildings to residential: a comparison of mechanisms in several countries." The results of this research were presented through a webinar on Thursday, March 10, 2022. Wiwik Dwi Pratiwi (lead researcher from ITB) as the speaker presented the results of the research and was responded to by Afan Adriansyah Idris (Assistant for Development & Environment of the DKI Jakarta Provincial Secretariat) and Candra Giri Artanto (Director of Development and Utilization of the State Asset Management Agency).
The results of this research found three recommendations for converting office buildings into residential buildings for planning in Jakarta and even Indonesia. The three recommendations are:
1. Policy recommendations
Successful office-to-residential conversions are supported by written regulations from the central (national) government which are then translated into technical requirements at the regional (city) scale. Although Indonesia has converted offices into residences. However, in the regulations, changes in building functions are allowed as long as they follow the applicable regulations. In Government Regulation No. 16 of 2021 concerning the Implementation of Law No. 28 of 2002 concerning building buildings, it is stated that in the event of a change in the function/classification of a building, the owner is required to apply for a PBG change (previously IMB).
2. Location recommendations
The location is divided into two, namely in a strategic location (city center) and in a non-strategic location. In strategic locations, the potential for building conversion is quite high, because generally in these locations there are already available facilities and access needed by residents. However, comfort related to noise limits needs to be considered, given that locations close to highways tend to have noise levels that are less suitable for residential functions. For the conversion of buildings in non-strategic locations, generally the selling value is lower so usually the building owner will continue to strive to increase the value of the property, one of which is by converting the building. However, converting buildings in these locations requires the addition of public facilities needed by residents, such as convenience stores, clinics, and transportation facilities. Aside from the above provisions, other things that need to be considered are related to natural ventilation and lighting, as well as access to the view outside the office building to be converted.
3. Financial recommendations
Taxes and incentives for building conversion depend largely on the stakeholders involved in issuing policies related to building conversion. Then, at the planning stage, the government can provide support in terms of reducing planning fees or facilitating permits for building conversion. Then, at the conversion process stage, there should be technical assistance in the form of technical consultations so as to save the cost of consultant services. As for the post-conversion stage, the government can release data on converted buildings in the context of promoting these buildings, so as to save on promotion and marketing costs. Then, there should be a financing scheme from pre-conversion to post-conversion in collaboration with banks or other investors.
Full report of research results: a comparative book on the conversion of office buildings into residential buildings