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Housing and Settlement Law Post Job Creation Law

By May 19, 2021 No Comments

The Job Creation Law changes, sets new, removes some provisions stipulated in the housing and settlement area law, condominium law, construction services law, and water resources law. These four laws are packages that fall into the public works and public housing sectors. The Job Creation Law stipulates that changes to the package of laws are intended to provide convenience for the community, especially businesses in obtaining business licenses and ease of investment requirements. So, what are the key points of change in the housing and settlement law post the Job Creation Law?

First, the Job Creation Law changes the provisions on technical, administrative, spatial, and ecological requirements contained in the previous provisions to be based on standard. What should meet the standard? The result of planning and designing of the house. In government regulation,  the standard is divided into sections that will not be discussed here. Nevertheless, in the general elucidation of government regulation, it is explained that the ‘standard’ is done through adjustment of nomenclature, namely nomenclature of building permits into building approval (PBG)  and change in nomenclature requirements to standard. What  was previously referred to as a conditions, e.g. administrative requirements, technical requirements etc., is now changed to ‘standard’. In other words, the essence is the same as the previous rule, other than regarding the change of nomenclature.  The removal of the ‘terms’  and being changed to  ‘standard’ can be, however, confusing. Administrative requirements are completely removed in the rules. Is it true that there are no administrative requirements at all such as land rights, landowners, etc.? It seems impossible. Where are the administrative requirements lie then? This seems to be arranged when applying online through the building management information system.

Second, the opportunity for construction actor (housing developer) to convert the obligation of simple house construction into a form of funds for the construction of public housing. The management of the funds will be carried out by the accelerated housing organizing body. Nevertheless, conversion to public condominium also remains available. So, the construction actor has two options if a simple house cannot be built in the form of a single house or a series of housing, namely converted into public condominium or funds for the construction of public housing. This is positive and probably better considering developers often have problem building public houses. If the developer is small-scale and only focuses on luxury or at least medium-scale homes, with a small number of houses, this rule will make it difficult for those developers. Nevertheless, if converted to public housing funds, it also means that the construction of public housing or public condominium becomes the responsibility of the government. The funds are not intended to be dormant in savings, but should be used for the benefit of low-income communities.

Third, the change of location permit terminology to become suitability of space utilization activity (KKPR). The term ‘location determination’ which is still included in the law does not refer to ‘location permit’ but rather at the stage of land acquisition for the public benefit stipulated in different law. What will be interesting to note, if the location permit is no longer there and becomes KKPR, is it still necessary for a land designation permit that is generally issued by the local government or is it completely removed? KKPR will refer to the detailed spatial plan that already exists in an area. KKPR approval even includes the basic coefficient of the building and the floor coefficient of the building and the requirements for the implementation of space utilization activities.[1] Therefore, it seems separate permits will be no longer required from the respective local government. KKPT approval needs to be obtained by the construction actor before they can do land acquisition through the transfer or relinquishment of land rights.

Fourth, the establishment of a housing acceleration agency (BP3) to realize the provision of public housing for low-income people. BP3 is formed by the central government.

Fifth, construction actor organizing residential neighborhood or ready-to-built area (kasiba) that does not separate the residential neighborhood or kasiba into a unit of residential neighborhood or ready-to-built neighborhood are subject to administrative sanctions. This provision was previously a criminal provision with a criminal offense of a maximum fine of Rp 5 billion.

Substantial changes appear to be only in the obligation to build public houses that can be converted in the form of funds and changes to criminal provision into administrative sanction. Other changes are non-essential in nature because their substance are the same as before. The changes also actually only follow the changes that have occurred in the spatial planning laws and building laws.

[1] Article 108 verse (8) PP Number 21 of 2021 on Organizing Arrangements room

Eddy Leks