Layered Land Rights Under Government-Led Decentralization: LVC Implementation in Jakarta (Danandjojo, Ramezani & Woltjer, 2026)

Summary

"Layered land rights under government-led decentralization: Implications for land value capture implementation in Jakarta, Indonesia," by Yescha Nuradisa Ekarachmi Danandjojo, Samira Ramezani, and Johan Woltjer, published in Land Use Policy (December 2026). The paper investigates how Indonesia's multi-tiered, decentralized governance structure — where land regulation authority is distributed across national, provincial, and municipal levels — affects the practical implementation of land value capture instruments, using the Jakarta Mass Rapid Transit (MRT) project as its case study. This is the wiki's first LVC-governance case study for Indonesia specifically (distinct from Hernandi et al.'s SALAD model, which covers property-tax social acceptance rather than transit-financing implementation).

Method and Argument

The study is qualitative, drawing on interviews and regulatory-document analysis rather than statistical estimation. Its central claim is that the standard framing of LVC obstacles — assessment difficulty, political resistance, revenue adequacy — misses a governance-structural problem specific to decentralized states: multiple stakeholders hold overlapping, layered property interests, and fragmented regulatory authority across government tiers impedes the coordination LVC implementation actually requires. Formal LVC mechanisms exist on paper around the Jakarta MRT corridor, but the paper finds that ambiguity about who owes what to whom, combined with procedural complexity spanning multiple jurisdictional levels, restricts their practical application even where the legal instruments themselves are sound.

Contribution

The authors position their contribution as connecting specific LVC instruments to specific categories of rights holders — rather than treating "land value capture" as a single undifferentiated policy the state imposes on a generic "landowner," the paper maps which instruments interact with which layer of the rights structure, and where the coordination failures concentrate. Their findings emphasize three practical fixes: clarify which contributor owes what obligation, strengthen cross-level government coordination, and simplify administrative procedure — a governance-design agenda rather than an instrument-design one.

Relation to the Georgist Case

This paper sharpens a lesson the wiki has now documented across several jurisdictions — India's MoHUA framework, the Grand Paris Express case, and this wiki's general treatment of the assessment-accuracy objection — that LVC's real bottleneck is very often administrative and jurisdictional, not the underlying economics or even the specific instrument chosen. What this paper adds that the India case does not emphasize as sharply is the layered-rights mechanism specifically: in a decentralized state, land value capture requires coordination not just between the state and landowners but among levels of the state itself, and unclear division of authority between national, provincial, and municipal government can paralyze implementation even when every individual level's own rules are internally coherent. This is a distinct failure mode from India's capacity-gap story (weak valuation expertise across 4,000+ ULBs) or Australia's crediting-incentive story (the MRRT) — a genuinely different way LVC implementation can fail, worth keeping distinct in the wiki's growing catalogue of "good instrument design, still doesn't work in practice" cases.

A Quantified Counterpart: the New Jakarta Loopline

A 2026 engineering-journal study by Fery Safaria and Carunia Mulya Firdausy of Universitas Tarumanagara puts numbers on the same question for a different Jakarta project, the planned New Jakarta Loopline rail. Using assessed land values (NJOP) for 630 parcels around 21 stations and a hedonic land-price model, the authors simulate the uplift from station-area development and ask how much of the line's fare subsidy (its Public Service Obligation) a tax-increment earmark could cover. At the 0.3% land-and-building tax rate set by a 2014 Jakarta gubernatorial regulation, the earmark comes to about Rp 514 billion against a first-year subsidy need of about Rp 2.46 trillion, or 25%, and averages about 27% over the concession period as ridership and assessed values grow. The paper's own conclusion is that a tax-increment earmark cannot carry the subsidy alone and other financing streams are needed.[2] The venue is a general technology journal rather than an economics or planning outlet, and several of the per-station regressions rest on samples at the statistical minimum of 30, so the figures are best read as an order-of-magnitude illustration: even with the whole increment earmarked, Jakarta's statutory 0.3% rate captures only a quarter of what one rail line's operating subsidy requires, which is the fiscal side of the governance problem the Groningen study describes.

Nuances and Limits

• Qualitative case study, single city. The paper's method is interviews and document analysis around one transit project in one city; its conclusions are about mechanism and process, not a quantifiable estimate of how much LVC revenue Jakarta actually lost to the coordination failures it documents.
• Abstract-level sourcing. This entry rests on the publisher's abstract, as posted in the University of Groningen research repository; the paper's full case evidence, interview quotations, and specific instrument-by-rights-holder mapping have not been consulted.

Bears On

• Concept: Land Value Capture — adds a governance-structural failure mode (layered rights under decentralization) to the wiki's account of why LVC underperforms its theoretical potential.
• Research: India's Value Capture Financing Framework (MoHUA, 2017) — a comparative developing-country LVC-implementation case with a different (capacity-gap) primary obstacle.
• Objection: Land value can't be assessed accurately — this paper's coordination-failure mechanism is a distinct administrative barrier from the valuation-accuracy question this objection focuses on.

See Also

• Land Value Capture
• India's Value Capture Financing Framework (MoHUA, 2017)
• Hernandi et al.: The SALAD Model (Indonesia)
• Objection: Land value can't be assessed accurately
• Walters (2012) — sets out the practical conditions (timely reassessment, a maintained effective rate, adequate resulting revenue) that this paper's governance-fragmentation finding shows breaking down in Jakarta before valuation and rate-setting even come into play

Sources

1. Yescha Nuradisa Ekarachmi Danandjojo, Samira Ramezani & Johan Woltjer (2026), "Layered land rights under government-led decentralization: Implications for land value capture implementation in Jakarta, Indonesia," Land Use Policy (December 2026). research.rug.nl — abstract read 2026-08-17 — used for the paper's method (qualitative, interviews and regulatory-document analysis), the Jakarta MRT case, the layered-rights/fragmented-coordination argument, the instrument-to-rights-holder mapping contribution, and the three practical recommendations. Scan depth: abstract only (B-claim); the full paper was not consulted.
2. Fery Safaria & Carunia Mulya Firdausy (2026), "The Contribution of Value Capture from Tax Increment Financing to the Value of Public Service Obligations," Jurnal Media Teknologi 13(1), September 2026, pp. 54–64 (Universitas Galuh; English abstract, Indonesian body). ojs.unigal.ac.id — used for the New Jakarta Loopline study design (21 stations, 630 parcels, NJOP data, hedonic model), the 0.3% rate under Jakarta Gubernatorial Regulation 77/2014, the Rp 514.4 billion earmark against a Rp 2.459 trillion first-year subsidy (25.13%), the 26.98% concession-period average, and the authors' conclusion that the earmark alone is insufficient (C-claim; a general engineering-technology journal outside the economics and planning literature, with small per-station samples; figures read from the Indonesian text).