Agrarian Reform in the City: Options by the Government

By March 26, 2021 No Comments

Agrarian reform is a goal of the government since the promulgation of agrarian law of 1960. More than sixty years has lapsed since agrarian law and agrarian reform is currently not only about the land redistribution of farm to the farmers, but also land to the non-farmers. In the city like Jakarta, farmers might be non-essential subject. Illegal house and illegal occupancy that also cause slum areas are more problematic. Some people live, by building a house, on a plot of land that he does not own, or at least is unable to be legally proven as his or her ownership. Never-ending legal disputes involving many parties claiming the land are huge problem to be resolved. The people, mostly low-income community, keep on living on that disputed land, without any land ownership and building license at hand.

Agrarian reform is dealing with asset arrangement and access arrangement. Asset arrangement includes land redistribution and asset legalization. Part of land redistribution is the distribution of certificate of right of ownership over condominium unit (SHMSRS). Where, access arrangement is a provision of opportunity given to the people to access capital or other assistance. The main point here is to empower the people.

Based on the Indicator of Housing and Environmental Health 2020 published by the BPS, 72.04% of household occupies their own residential building in the city in 2020. For DKI Jakarta, it is only 45.04% of household occupies their own residential building in 2020. This is the lowest in Indonesia. More than one third of household in DKI Jakarta occupies the residential building by way of leasing. In Indonesia, less than half of household who occupies their own residential building has land ownership i.e., certificate of right of ownership (hak milik). Thirteen out of 100 household in Indonesia does not have any land ownership over its residential building. In 2020, in DKI Jakarta, only 45.04% household owns their residential building. From the perspective of land ownership, in 2020, 56.47% household in DKI Jakarta has hak milik certificate, 20.65% has other types of evidence e.g., girik, letter C, etc, and 7.69% does not have any.

What then the government can do to achieve the agrarian reform’s goal in the city? The government has been systematically registering the land all over Indonesia. This program should be supported since it was mandated since 1960. Its completion target is 2025. This is part of asset legalization. If this is done correctly, at least the ‘other types of evidence’ statistic will be significantly decreased and moved to the eligible land ownership certificate. The government may also build more low-cost housing and condominium for the low-income community. This is the responsibility of the government. In big cities, housing may not be feasible anymore due to limit of land. Hence, what options does the government have in building condominium for low-income community?

There are two main models to build low-cost condominium for the low-income community. First is by being a developer. The government will build over its land a condominium intended for low-income community. From this first model, after the condominium construction is completed, the government has several further options. First is to grant the condominium unit. Second is to sell it according to the determined price for public condominium. Third is to sell the condominium unit only, without transferring its land. Fourth is to rent it out. Every option has its pros and cons that will not be discussed here. In addition, the government must comply with the current regulation on the transfer and rent of asset to the third party i.e., low-income community.

Second is not by being a developer, but by giving its asset utilized by third party, namely credible developer. This might be a state-owned enterprise, local-government owned enterprise, or private party. Under condominium law, the government has two options to do it. First is to rent it for long term, namely 60 years. The developer as government’s partner will rent the land, build it, and sell the certificate of building ownership of condominium unit (SKBG). Second is by implementing the utilization cooperation (KSP) for 30 years. Under KSP, the developer will build the condominium over the government’s land (e.g. right of management – HPL), request for land right to be issued (e.g. HGB over HPL), convert the HGB to HMSRS and then sell them to the low-income community. Again, each option under this second model has its pros and cons that will not be discussed here and requires government’s compliance over long-term rent and KSP.

Surely the asset redistribution to the low-income community requires control so that it will be right on target. The amended condominium law (under employment creation law) has given this controlling authority to the housing acceleration implementation body (BP3). Despite this change, this body should have been established since 2011. We are now waiting government’s commitment on this matter. Would it be real this time ?

Eddy M. Leks