Why Not All Plots of Land Can Be Built on for Housing or Business?

JAKARTA - Not all plots of land can be used for building houses or business premises. This is related to spatial planning regulations, land status, and various legal provisions governing land use in Indonesia. One of the main factors is zoning in the regional spatial planning plan (RTRW). Some time ago, the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency (ATR/BPN) Nusron Wahid was urged to promptly revise the RTRW in line with development needs. For regions that have not yet entered the revision stage, temporary designation mechanisms will be prepared to ensure that strategic programmes, including the housing sector, can continue without disregarding spatial planning principles. “With the issuance of this agreement, local governments can immediately follow up through RTRW revisions or temporary designations. The KP2B minimum of 87 per cent remains the benchmark, while land already owned by developers can be exempted to provide business certainty. We hope for serious follow-up from local governments and industry players,” said Nusron, quoted on Wednesday (23/4/2026). Local governments determine land designations, such as residential areas, industrial zones, agriculture, and green open spaces (RTH). This is based on Law Number 26 of 2007 on Spatial Planning. The law stipulates that every region has an RTRW that determines land functions, such as residential, industrial, agricultural, or protected areas. If a plot of land is in a certain zone (for example, agriculture or green open space), its use is restricted according to that designation. Land with Hak Guna Usaha (HGU) is intended for large-scale agricultural or plantation activities. Meanwhile, Hak Guna Bangunan (HGB) is more relevant for property development. If the status does not match, construction can face legal obstacles. Other factors include environmental and technical aspects. Some lands are in disaster-prone areas, such as flood zones, landslides, or riverbanks, where usage is limited. On the other hand, there is also the availability of infrastructure and access. Land without road access, water networks, or electricity is usually not yet suitable for immediate construction, especially for residential or commercial purposes. These regulations are generally under the authority of agencies such as the Ministry of ATR/BPN and local governments. The aim is to ensure that land use is orderly, safe, and in accordance with the regional development plan. Therefore, before building on land, it is important to verify zoning compliance, legal status, and technical conditions to avoid future problems.