ARI Working Paper Series

Paired informal settlements and gated communities are prevalent phenomena in the developing countries. In the Jakarta metropolitan region, one of the high-density Asian urban centers, it is observed that informal settlements are ubiquitous in its central city, while gated communities are concentrated in the suburbs. This dual process of informal and formal urbanization, or co-existence of urban kampungs and gated housing estates, is a result of state incapacity and ineffective governance over the land development market. As a result of inadequate supply of housing both as social and private goods, informal housing is a popular initiative for the self-provision of shelters. However, under the pressure of rising population, urban kampungs are trapped in a self-perpetuating spiral of deterioration because of the property rights situations of the commons and anticommons. When public governance fails, private governance arises to fill the void. The mode of gate housing estates facilitates the private provision of urban amenities and facilities needed for the fulfillment of the emerging middle class’ housing aspiration. However, social polarization is exacerbated by the spatial segregation. The key to the ending of spatial dichotomy of social segregation lies in the effective state.