Urban clusters and land price variation in Jakarta, Indonesia

ABSTRACTJakarta’s dynamism is impacted profoundly by the growing economic activity of urban agglomeration. The high intensity of urban economic activities has transformed the capital’s spatial configuration with the emergence of concentrated commercial areas, so-called urban clusters. The agglomeration stimulated an increased demand for commercial property, raising the need for land parcels. Theoretically, various determinant attributes influence land value; one of them is the location aspect. Location was often measured using the distance calculation method despite the questionable accuracy of the current city spatial structure. This research analyzes a new location attribute by considering spatial design and configuration, specifically from the arrangement of the surrounding environments. This study quantifies the degree of clusterization of an area and finds its relation to land value. We found that spatial clusterization positively correlates to the land value by 0.172%, and clusterization creates real estate advantages by adding more value to the properties within the cluster.KEYWORDS: Urban agglomerationspatial autocorrelationurban clusterland valuelocation analysis AcknowledgementsThis research is supported by the Riset dan Inovasi Indonesia Maju (RIIM) Grant under contract number PKS-168/UN2.INV/HKP.05/2022, funded by the National Research and Innovation Agency and Educational Fund Management Institution (Indonesia). The author also would like to express their gratitude to DKI Jakarta Governor and University of Indonesia for providing access to data.Disclosure statementNo potential conflict of interest was reported by the author(s).Additional informationFundingThis work was supported by the Badan Riset dan Inovasi Nasional [PKS-168/UN2.INV/HKP.05/2022].Notes on contributorsAhmad GamalAhmad Gamal received his PhD in Regional Planning (2016) and Master of Urban Planning (2010) both from the University of Illinois at Urbana-Champaign. Gamal is a prolific urban planner, having written robust policy reviews for the Ministry of National Planning and Development (BAPPENAS) in the past. He encourages the need for in-depth economic impact evaluation to quantify physical development, vis-à-vis its consequences to poverty alleviation. He also conducted research beyond poverty alleviation such as investigating the value capture mechanism on Jakarta gated community housing (2020) and producing 3-D semantic segmentation method for urban growth detection (2019) to name a few.Risty KhoirunisaRisty Khoirunisa received his Master (2020) from Szeged University at the Department of Physical Geography and Geo-information. Her thesis research focused on Geographic Information System and Remote Sensing. Prior to her master, she has been working closely with government, Geospatial Information Agency, to provide assistance in spatial planning map production.Iman MuhtadiIman Muhtadi received his Master (2021) and Bachelor Degree (2019) from Universitas Indonesia at the Department of Architecture, Faculty of Engineering. His thesis research focused on real estate development. During his graduate study, he has been working professionally as an urban researcher and actively involved in several national-scale projects in Indonesia. He is currently working as a professional urban designer in a multi-national infrastructure consulting firm.