Incentives and Transfer of Developmental Rights

Under Article 175 of Spatial Planning Regulation, the mechanism for providing incentives originating from regional governments is regulated under the regulation of governor. However, the form of incentives is also regulated the other national regulations, i.e. Minister of Public Works Regulation No. 06 / PRT / M / 2007 concerning General Guidelines for Building and Environmental Planning (“Minister Regulation of RTBL “). In the Minister Regulation of RTBL, it is stipulated that the Transfer of Developmental Value Coefficient System (TDR) is the right of the building owner/developer that can be transferred to another party or land, where the transfer is calculated based on the transfer of KLB value, which is the difference between the rule of KLB and the KLB that has been built, where the maximum transfer is generally 10% of the stipulated KLB value. The transfer of KLB value can only be permitted if it is located within the same planned area and intergrated, and the person concerned has utilized 60% of the KLB from the KLB that has been determined in the planned area.

Furthermore, referring to the Regulation of the Minister of Agrarian Affairs and Spatial Planning / Head of the National Land Agency No. 16 of 2017 concerning Guidelines for the Development of Transit-Oriented Areas (“Minister Regulation of TOD”), the Transfer of Developmental Rights is a device to encourage voluntary transfer of developmental rights from a place that wants to be preserved or protected to a place or the area that is expected to develop. The transfer of developmental rights can be carried out with the following conditions:

  1. The right to build that can be transferred in the form of floor area from the difference between the KLB limits stipulated in the zoning regulations and the KLB that has been used in the plot;
  2. The recipient of the transfer of floor area receives a maximum of 50% of the KLB determined in the planned land;
  3. Transfer of floor area can only be done one time;
  4. For land that has transferred floor area and received floor area transfer, there is no KLB addition;
  5. If the floor area has been transferred in the planned land, and the new KLB for the planned land is stipulated, then the KLB difference cannot be transferred.

Besides that, TDR can be applied when there is a land plot which buildings are set forth as cultural heritage, areas that are protected/conserved. TDR can also be a financing scheme for such safeguards, so the society /developers who lose their economic opportunities due to spatial provisions can be replaced through TDR schemes. TDR allows developers/society who agrees to reduce the use of their developmental rights in certain lands to transfer their excess rights to other lands (in the TOD area) they wish to develop. With TDR, the owner of the land transferring the building rights (KLB) receives compensation from the sale of transferrable developmental rights in return for limiting the land from the possibility of future development. TDR requires a mechanism that regulates relations between landowners and agreements made with local governments as well as good institutions to administer TDR so that the process and results are recorded to avoid the community selling / buying rights to build it repeatedly.

With these provisions, the incentives for spatial planning can be in the form of transfers of developmental rights that can also be traded by the developer/community, provided that the transfer is only limited to the KLB of land.

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The technical implementation of the provision of incentives and the transfer of development rights as referred to in the Spatial Planning Regulation is regulated in a Governor Regulation, specifically for the DKI Jakarta area, Governor Regulation No. 27 of 2012 concerning Incentives for Spatial Use in the Form of Calculation of Space Intensity Based on Land Ownership Areas (“GR 27/2012”). This regulation was issued by referring to the Spatial Planning Regulation, which was prepared to provide incentives for people / legal entities that build according to the spatial plan and provide a portion of their land for the main infrastructure of the city ahead of the availability of the main infrastructure that is the government’s obligation.

Article 3 of the GR 27/2012 stipulates that special treatment is given to the calculation of the spatial intensity of the requested land based on the area of land owned, the calculation of the spatial intensity is given in the spatial intensity limit in the form of KLB, however, the special treatment can be carried out after first being stipulated in a Executive Meeting of Land Affairs Advisory Team which was subsequently declared with a Governor Decree.

Furthermore, Article 4 of GR 27/2012 regulates that the location of land that can be given space intensity based on an area of land ownership is as follows:

  1. in a location according to the Regional Spatial Plan and is encouraged to develop and meet at least one of the following requirements:
    1. located at of the primary activity center and the secondary activity center;
    2. located at around the city’s infrastructure network;
    3. located at the mixed mixture area which is directed to become a dense area; and
    4. located at the transit-oriented development (TOD) area.
  2. Meet the technical requirements as follows:
    1. Plots of land that are subject to minimal infrastructure in the form of roads, canals or other infrastructure; and
    2. The land contributed to infrastructure development can be utilized according to its economic potential due to being exposed to the obligation of providing infrastructure.

Besides that, some requirements are needed to control the provision of special treatment in the calculation of space intensity based on the DKL:

  1. Does not cause changes in the structure of space;
  2. Does not conflict with the provisions of the legislation if the location is in the area of restoration;
  3. Cannot be given to housing related designations such as small guesthouses, medium guesthouses, large guesthouses, garden guesthouses and flat guest houses;
  4. Do not give a negative impact on the surrounding environment such as changes in land use values, causing congestion and causing floods;
  5. Must first be calculated the availability and capacity of infrastructure and the main utilities that support it;
  6. Considering the standard needs for facilities (space) in the public interest;
  7. Calculation of spatial intensity based on DKL only applies to lands with an area of more than 5,000m2 and construction vertically or more than 4 floors;
  8. Must contain the principle of equality, in the sense of equality between the value of land and its construction which is a liability with the economic benefit of the land owner minus the calculation of the amount of the increase in KLB increase, if it does not calculate the intensity based on the DKL
  9. Has been reviewed and received approval from TPUT.
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Without prejudice to the above conditions, the calculation of the Area of Land Ownership (“DKL”) is also regulated in the Governor Regulation No. 27/2012, with the following provisions:

  1. DKL calculation consists of 1 type of designation, the area of the Planning Area (the area of land owned minus the area of land for road plans, canals and / or land area with other designations by the provisions of the legislation cannot be combined – “DP”) is calculated from the area owned land;
  2. DKL calculation on land consisting of 1 type of designation, the area of DP is calculated proportionally or proportional to the area of each designation;
  3. The calculation of DKL consists of more than 1 (one) type of designation but there is an allotment which is excluded, then the proportion of the allotment cannot be utilized.

In 2014, DKI Jakarta issued Provincial Regulation No. Jakarta Special Capital Region. 1 of 2014 concerning Detailed Spatial Planning and Zoning Regulations (“RDTR Jakarta“). Article 597 of RDTR Jakarta stipulates that the DKI Jakarta regional government prepares Zoning Regulation (“PZ”) as an instruments for Regional Working Unit (Satuan Kerja Perangkat Daerah – SKPD), and related agencies in controlling spatial use based on spatial use zones detailed into spatial use zones. PZ consist the Zoning Management Technique (“TPZ”), which was determined by the Governor after obtaining consideration from the BKPRD. The application of TPZ is by TDR, namely code b.

Seeing that the TDR can be transferred, it can be interpreted that the developmental rights which are limited by Zoning Regulation, but have fulfilled the requirements referred to in Pergub No. 27/2012 can be transferred or sold with the provisions stipulated in Article 622 DKI Jakarta RDTR:

  1. Transfer of building rights in the form of floor area from one parcel to another in the same zone within a village administrative boundary;
  2. The transfer of building rights in the form of floor area from one parcel to another with the same zone in the area developed by the TOD concept is allowed not in one block;
  3. The right to build that can be transferred in the form of floor area from the difference between the KLB limit specified in the PZ with the KLB that has been used in the plot;
  4. The transfer of building rights in the form of floor area is not permitted in the village housing zone, the KDB medium-high housing zone, and the low KDB housing zone;
  5. The recipient of a floor area transfer receives no more than 50% of the KLB determined in the planned land;
  6. The transfer of floor area is only done once;
  7. Land that has transferred floor area and received floor area transfer has not received KLB exceedance;
  8. In a planned area the floor area has been transferred and then a new KLB is determined for the planned land, then the difference in KLB cannot be transferred; and
  9. The transfer of floor area to the zone in an integrated and compact planning land that already has a Urban Design Guidelines (UDGL), must redefine the Urban Design Guidelines.

Joshua Panjaitan