Housing in Indonesia is unaffordable, according to Finance Minister Sri Mulyani Indrawati. Prices are so prohibitive that only the richest 20 percent of households can afford to buy a house in the formal market. The bottom 40 percent cannot access the formal housing market at all. The middle 40 percent can only do so through government subsidies.
Jakarta residents are not only deprived of affordable housing but also of green spaces. The latter make up less than 10 percent of the capital city’s land area, depressingly short of the 30 percent mandated by the 2007 Spatial Planning Law. The consequences are dire: Water catchment areas to prevent flooding are insufficient; trees to produce oxygen are scarce; free and healthy recreation areas are inadequate.
What hampers the provision of housing and green spaces is land shortage. Jakarta is among the world’s densest cities, on par with Tokyo with about 14,000 residents per square kilometer. The difference is how they are built. Jakarta’s density is sprawling horizontally with low-rise single-family houses.
Such development swallows excessive land area and leaves little space for affordable housing and parks. For this reason, Jakarta needs to build upwards.
The advent of the mass transit system in Jakarta could make the capital’s land utilization significantly more efficient and housing more affordable. Agrarian and Spatial Planning Ministerial Regulation No. 16/2017 promotes transit-oriented developments (TOD) through densification around transit nodes. Thus, Jakarta is to create more floor space around MRT, light rail transit (LRT), bus rapid transit (BRT) and commuter train stations by building vertically.
This entails designing compact, mixed-use and mixed-income neighborhoods that are well-integrated with mass transit options while allowing open, green areas. While TODs are theoretically attractive, their implementation in Jakarta is challenging because of two key issues: lack of vision in Jakarta’s master plan and the high cost of land.
Jakarta’s 2030 master plan, published in 2014, is devoid of a spatial vision and offers projections on its population and economic growth that are too conservative. It assumed a population increase of merely 20 percent (from 10 to 12 million) between 2014 and 2030.
While it is true that Jakarta’s population only expanded by 20 percent (from 8.4 to 10 million) between 2000 and 2014, its economy grew astonishingly by 187 percent in real terms in the same period.
Indeed, most of the economy is still based in Jakarta, but the bulk of the population expansion happened in the suburbs: Tangerang, Bekasi, Bogor, Depok, etc.
Clearly, Jakarta cannot continue to rely on its suburbs to accommodate its population in low-density housing. We are already experiencing the drudgery of long commutes, not to mention the further loss of water catchment areas and fertile agricultural land.
The first step toward better planning is to acknowledge that population growth is inevitable and to support it Jakarta needs to build upwards.
Adopting TOD principles as mandated by the 2017 ministerial regulation requires an update in Jakarta’s master plan. The plan, due to be updated in 2019, needs to allow more space for housing, particularly the affordable kind.
This means allowing densification and vertical development around transit hubs while simultaneously enabling space to be used for much needed green areas.
The second issue stems from the high cost of land. Previous non-subsidized attempts to get developers to build affordable housing as part of their social obligations have been ineffective. Those vertical houses ended up in far-flung areas, such as Marunda and Rorotan in North Jakarta, where land is affordable, but these locations are undesirable for low-income household who earn the minimum wage as they need easy access to the city’s economy and job markets. Businesses and other segments of the population too require the services of cleaners, drivers, etc. to maintain daily operations.
Because of the high cost of land, providing affordable housing in TODs requires public subsidies in the form of land in strategic areas. Otherwise, affordable housing will always be built in unattractive, inaccessible locations.
An innovative way to address the issue is to engage state- or provincial-government-owned enterprises as part of the solution.
They own vast amounts of land in strategic areas, yet such land has low floor area utilization for its use is limited to a single service (i.e. a market or a bus terminal). Take one- to two-floor traditional markets for example. What if we build multistory low-income apartments on top of them?
This could be a win-win solution: Public enterprises earn extra income from unused air rights for developers to build low-income apartments that they are obligated to construct anyway; markets get more business; low-income households live in the city.
Finally, once some residents of low-rise housing have moved to nearby vertical flats in TODs, Jakarta can carve out land for green areas. This is in fact a way to revitalize kampung without relocating them to the fringes and disrupting existing establishments. Furthermore, this will help Jakarta fulfill its obligation to allocate 30 percent of its land for greenery.
TODs offer a timely opportunity to address the city’s long-standing issues: lack of affordable housing and scarcity of green spaces.
However, to seize this, as a first step, Jakarta needs to properly update its master plan to accommodate higher density, especially around transit hubs, allocate under-utilized public land for residents’ welfare and reclaim space to make Jakarta green again.
Jakarta must build upwards!
The writer is executive director of Jakarta Property Institute.
Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.