Posted on : The Jakarta Post, 22 December 2017
(Certified Property Valuer & Real Estate Analyst at Amin, Nirwan, Alfiantori & Partners Valuation Firm)

Housing backlog in Indonesia is relatively high. According to the Ministry of Public Works and People’s Housing, the housing backlog in Indonesia has reached 13.5 million units. This figure indicates that there are 13.5 million families that have no living place and/or permanent living place. Even the latest data from Perumnas stated that there is an increase in housing needs of about 800,000 units each year, caused by population growth and urbanization. On the other hand, the supply of houses that can be met in the residential class segment for low-income communities (MBR) is only 400,000 units per year, with a gap of 400,000 units per year. According to the data taken from Central Bureau Statistics, DKI Jakarta is the province with one of the lowest home ownership rate of 51.09%.

One of urgent agrarian affairs, is uneven distribution of land which has resulted in the emergence of slum housing. Jakarta is a clear example of an uneven distribution of land. It sadly has become a common sight in Jakarta to find slums area located very close or even beside a skyscraper such as a five-star hotel. Five-star hotels are rented at 3 to 4 million Rupiah’s per square meters, ideally filled with 2 persons, while houses in slum areas with 4×5 square meters are filled with the number of occupants of 7 to 4 people. Of course, this phenomenon triggers a lot of people questioning about social justice against the agrarian affairs.

The concept of a land bank is nothing new, in the context of urban spatial planning. The policy of the land bank was first performed at St. Louis, which is a part of the state of Missouri, USA with the given name St. Louis Land Reutilization Authority. European countries such as Netherlands, Switzerland, Sweden and other countries have also applied the policy of the land bank. While in Southeast Asia, Singapore and Thailand have been involved in implementing the land bank policy since several years ago. The concept of a land bank is arising from the government’s awareness to regulate urban spatial planning to be better, particularly in fulfilling the basic needs of urban communities such as houses, public facilities and infrastructure. This must be carried out because land is a finite resource that does not have the ability to be reproduced on one side, and on the other hand the human needs for land is rising higher and higher than ever. Therefore, the land bank is projected to have several functions as land keeper, land warrantee, land purchaser, land distributor and land management.

The next question is what type of assets can be compiled into a land bank? The first is idle assets owned by stated-owned enterprises (SOE/BUMN). We know that a lot of Indonesia’s SOE assets are not utilized properly. In addition, idle assets owned by ministries, department, non-government institution, local government assets in various region, as well as state-owned land reserves assets have the potential to be compiled as a stock of land bank. Besides the above methods, the government may also purchase new lands using state budgets in locations that relevant to land use or spatial plans that will be used as housing, infrastructure or public facilities in the future. Based on my notes, there are at least 23 thousand hectares of land with clean and clear status throughout Indonesia. In fact, 12 thousand hectares of that area is located around Jabodetabek (Jakarta, Bogor, Depok, Tangerang, Bekasi). Of course, this figure is quite fantastic if it can be utilized properly for the benefit of the people.

With this method, it is expected to minimize the practice of land acquisition which often led to conflict due to the mismatch of land acquisition price. It should be recognized, the constraints of land acquisition are one of the main reasons for the development of public infrastructure projects becomes protracted and inefficient.

In the context of providing housing for low-income people (MBR), land bank is an effective solution. The classic problem related to provision of housing for low-income people is the high price of land that must be redeemed by developers both private developers and government-owned developers such as Perumnas. With high land prices in various regions, developers need a lot of capital to buy land. Moreover, the selling price of housing for low-income people must follow the Housing Financing Liquidity Facility Scheme (FLPP), where the selling price should not exceed the selling price set by the government. Therefore, housing growth for low-income people tends to be slow and not progressive. On the other hand, the level of housing demand for low-income people continues to increase significantly.

Land that has been inventoried as a land bank in the future can be utilized and managed by the parties who want develop, especially related to the development of residential area. For example, the developer may submit a proposal as a condition of granting access to managing the land area owned by the land bank. In this way it is hoped that the problems related to the land provision for low-income housing can be effectively resolved. This policy also could be the solution in responding to various challenges related to current housing needs. Like the concept of housing with 0% down payment initiated by DKI government under Anies and Sandi regime, with land bank policy, this matter will be much easier to be realized without considering the burden of land acquisition costs.

It becomes very clear that the embodiment of land bank is urgently needed, especially in the context of agrarian reforms which became one of the main platform of Jokowi and Jusuf Kalla Government policy. The land bank is expected to be a permanent solution in controlling the balance between land needs and availability, controlling reasonable land prices, as well as the effort to integrate government policies related to land.


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