Jakarta Boosts Public Vertical Housing Development Through Incentives

Jakarta Investment Centre (JIC) held its first JIC Talks in 2022 virtually  on Friday, March 11th with a topic on the “Incentives for Public Vertical Housing in Jakarta”.  As speakers of the discussion,  Jakarta Capital City Government Head of Bureau for Development and Environment, Iwan Kurniawan, and Executive Director for Jakarta Property Institute, Wendy Hartanto, engaged the participants with a fruitful discussion. 

Around 173 participants from various professional backgrounds joined the event to find out more information as well as to give feedback about the policy from private perspectives. The engaging discussion was moderated by Mrs. Annisa Danu Purwanti from the Department for Investment and Integrated One Stop Services, Jakarta Capital City Government. 

The initiative in offering incentives for interested developers to build public vertical housing is regulated in Governor’s Regulation (Pergub) No.1/2022 regarding the incentives offered for public vertical housing developers to encourage collaboration from private sectors in meeting settlement needs in Jakarta Capital City.  

The implementation of this regulation is expected to solve one of the main settlement problems which is the unaffordable property price that pushes the majority of the working force to live in satellite areas. This policy can be a solution to provide affordable and liveable housing for the working group to live closer to their workplace. Consequently, it can also contribute positively to increase regional income through property tax as it can attract commuters who work in Jakarta while living in satellite areas to buy a house and live in the city. 

Incentives Types Offered for Public Vertical Housing Developer 

Jakarta City Government Head of Bureau for Development and Environment, Iwan Kurniawan, said that developers who are eligible to get an incentives offer are the ones who contribute to build public vertical housing according to Jakarta Capital City Government’s needs–public vertical housing without down payment and with rental scheme–after getting the legal permits. The incentives are given in two forms which are additional floor area and additional Building Coverage Ratio (Koefisien Dasar Bangunan).  

“The additional floor area is a form of incentive categorized as floor area ratio (KLB) addition where for every 1 square meter of public flats built on provincial government’s land, an additional 2 square meters of floor area is given,” he explained.

“As for every 1 square meter of floor of public flats built on developer’s land, an additional floor area of 3 square meter is given,” he added. 

In addition, the government also provides incentives for additional Building Coverage Ratio (Koefisien Dasar Bangunan. However, a maximum limit of 20% of building site area in terms of the building floor coefficient limit of 40% in accordance with the city plan is applied. 

Executive Director for Jakarta Property Institute, Wendy Hartanto, appreciated this incentive offer for developers through the Governor’s Regulation No.12022. “From the developer side, we see that we are given the opportunity to contribute,” she said. 

In conclusion, this policy is a positive movement from the government to meet public settlement needs which is highly appreciated by the private sectors. Further discussions among stakeholders are expected to bring this policy into realization onwards.