2022 Volume 10 Issue 4 Pages 240-259
In this template file as introduction for the format of this journal. All content should follow the suggested AbstractEn style.Groundbreaking methods, which can combine stakeholder analysis and cost–benefit analysis (CBA) on urban development projects, are lacking. This study thus proposes an evaluation framework using CBA integrated with stakeholder interest mapping through focus group discussion and analytical hierarchy process. The proposed framework is demonstrated as the methodology for the study. The investigation takes eight residential developments in Sleman, Indonesia. Stakeholder interest mapping is found to provide empirical information regarding stakeholder concerns about urban land-use and development. In addition, multi-stakeholder CBA enables evaluation to identify and estimate cost and benefit distributions for each stakeholder. Moreover, the identification of stakeholder-focused cost–benefit and the calculation of the net present value and benefit–cost ratio simultaneously assist in the estimation of the total economic value and its proportional fairness arising from the development decision. Furthermore, this proposed urban development evaluation framework is beneficial as a preventive measure of conflicts among stakeholders caused by the externalities of urban development projects.
In international academic and practical discussions, a spatial planning system is an ensemble of regional governance arrangements, which seek to shape spatial development patterns in particular places. In the practice of governance, spatial planning serves as a critical instrument to deliver economic, social, and environmental benefits by creating optimal conditions for investment and development, securing what communities can benefit from development, and promoting ecological protection (Izakovičová, Miklós et al., 2018). This instrument is fundamental, particularly in countries at the transition phase due to the rapid growth and urbanization (Spaliviero, Boerboom et al., 2019), such as Indonesia (Setiawan and Sunarharum, 2020).
In the spatial planning context, conflicts indicate that land-use planning sustainability has not been achieved yet. The Indonesian National Law No. 32/2009 on Environmental Conservation and Management (2009)states that land-use sustainability occurs when land-use planning provides benefits in various aspects, i.e., economic, ecological, and social. Consequently, sustainability must also be recognized from the excitement of diverse stakeholder interests that may obtain benefits socially, economically, and environmentally (Huang, Pai et al., 2016; Yu, Shen, Shi, Lai et al., 2017). Conflicts in the form of any objection and opposition expressed by surrounding communities or environmental activists may imply the potentials of negative externalities or losses of benefit opportunities for using resources by certain stakeholders (Marx, 2016; Yang, Song et al., 2016). Stakeholders can be defined as groups or individuals whose interests and activities strongly affect and are affected by a project (Freeman, 2004; Hartmann and Hietbrink, 2013; Yu, Liang et al., 2019). Stakeholders are also those who have the opportunity to provide input, either in the form of thoughts or costs, to a policy and the chance to benefit from the implementation of the land-use policy (Muñoz-Gielen, 2014). Costs and benefits can occur directly or indirectly and consciously or unconsciously.
The social, economic, and environmental implications of urban land-use development decisions are generally assessed through cost–benefit analysis (CBA) (Hudson and Botzen, 2019; McDonald, 2001; Milion, Alves et al., 2021; Roy, 2021; Ustaoglu, Williams et al., 2016). Previous studies demonstrated the significance and role of multi-stakeholder CBA in assessing various development cases. For example, Iwanciw, Zalles et al. (2013) studied the CBA of climate change mitigation and adaptation, especially in urban water provision programs. Other past works that performed multi-stakeholder CBA are energy megaproject assessment by Joseph, Gunton et al. (2020) and Ren, Wu et al. (2019) and the transport sector (Henke, Cartenì et al., 2020). As far as observed, multi-stakeholder CBA that evaluates residential land-use development is less elucidated. Thus, the current research contributes to literature by constructing a CBA framework that involves diverse stakeholders to assess and simulate urban land-use decisions, especially in residential development. The framework benefits Indonesian cities and other foreign cities in evaluating urban residential land-use decisions.
This investigation aims to evaluate urban development determination and decision through quantitative simulations using multi-stakeholder CBA. It assumes that conflicts or objections less likely occur as long as urban development does not harm certain parties and can provide maximum benefit to the public, as previous studies suggested (Yu, Liang et al., 2019; Yu, Shen, Shi, Zheng et al., 2017). CBA can quantify in detail the decline in property values and negative impacts on surrounding environments, including potential positive values and positive implications for diverse stakeholders (Hudson and Botzen, 2019). In this way, the development can please many parties involved. The study observes the realization of urban development as a result of stakeholder interaction dynamics, the consequences (to support or to oppose) observed in the field, and longterm consequences identified through CBA. From this perspective, urban land can be optimally used with the principle of highest and best use (Bertaud and Malpezzi, 2001).
Indonesian National Law No. 26/2007 on Spatial Planning (2007)mandates that spatial plans produced at every government level (i.e., national, province, regency, and city) are outlined at various scales, from 1:1,000,000 to 1:5,000. National, provincial, and district spatial plans mainly guide government investment, especially when the use of public budget for public infrastructure building is justified. For a spatial plan to be implementable at a low level to facilitate a community and private investment, the act mandates every district to provide a detailed spatial plan scaled 1:5,000, containing a zoning map and regulation for microscale land-use directives. The 1:5,000 spatial plan incorporates land-use and building permission mechanisms.
In Indonesia, the degree of excitement of all stakeholders that can represent sustainability and fairness can be identified clearly in the municipal (urban) scale whose land-use permits are based on a 1:5,000 spatial plan and zoning. At this level, stakeholders with direct interests are complete, and the economic interests of each of these actors are already observable; therefore, conducting a study using an economical approach as the basis for determining land-use and urban development projects is representative. Aspirations and bargaining dynamics among actors can already represent actual market dynamics, such as governments as regulators (Ianoş, Sorensen et al., 2017), property buyers or users as the direct-affected parties by the quality of residential buildings (Milion, Alves et al., 2021), surrounding communities as stakeholders who are affected by residential development externalities (Yang, Song et al., 2016), and nongovernment organizations (NGOs) that actively represent the interests of the broad community (Nae, Dumitrache et al., 2019). Accordingly, our research focuses on land utilization cases for residential zone development apparent on spatial planning at the 1:5,000 scale.
This research argues that urban development conflicts are usually triggered by adverse external effects (or negative externalities) in social, economic, and environmental dimensions. One of the solutions to mitigate conflicts is to recognize potential externalities of urban development projects (Chatziioannou, Alvarez-Icaza et al., 2020) and identify likely impacted stakeholders (Yu, Liang et al., 2019). By doing so, policymakers can formulate inclusive mitigation strategies to minimize conflicts among diverse urban stakeholders and provide additional inclusive urban development benefits (Zepharovich, Ceddia et al., 2021).
Various established works are available for externalities appraisal in urban development projects. For example, in the social dimension, a development project is usually accompanied by a social impact assessment to identify potential social effects in negative or positive facets and recommends solutions for such recognized impacts (Wang, Han et al., 2016). Another example of an established externalities appraisal is a strategic environmental assessment, which aims to identify environmental effects of urban development policies and provide mitigation strategies to respond to them (Cutaia, 2016). This study acknowledges that such an external effect assessment, as previously exemplified, is beneficial to provide a detailed evaluation and support project sustainability in respective dimensions. However, a comprehensive framework is still needed to inform the decision-making process of urban development projects. One of the obstacles is the lack of methods, and the lack of clear components for making these decisions can provide mutual benefits to various stakeholders and ensure the ecological sustainability of the project.
To perform stakeholder-focused externalities assessment for urban development projects, we propose a combination of stakeholder analysis and CBA as a framework for urban development evaluation. Motives underpin the integrated framework. First, stakeholder analysis aims to recognize the diversity of interests in urban areas. Literature suggests that urban areas and their developments comprise various parties and interests that can and should influence policymaking toward mutual consensus (Atay Kaya and Kaya Erol, 2016; Henke, Cartenì et al., 2020). Second, CBA enables the quantification of externalities caused by development projects, either positive or negative. CBA results can inform the policymaking process through an accountable estimation of potential project consequences, bad or good (Bidone, Maddock et al., 2002).
By combining stakeholder analysis and CBA, this proposed method thus offers two advantages. First, externalities experienced by each involved stakeholder can be recognized and incorporated into CBA, which increases analysis accountability and inclusiveness. With further accountability on CBA, policymakers can have additional opportunities in selecting the best urban development decisions that can provide mutual benefits to all interested parties without leaving anyone behind (Ren, Wu et al., 2019). Second, by recognizing each stakeholder externalities, potential conflicts can be mitigated effectively through dialogues, additional project requirements or any project conflict resolution measures (Atay Kaya and Kaya Erol, 2016).
The case location was in Sleman Regency, in Yogyakarta Province, Indonesia. This selection was based on the following considerations. First, the region was experiencing rapid urbanization. Records from 1987 to 2007 showed that the built-up area in the regency increased from 10,740 to 19,034 ha, whereas the agricultural area shrank from 26,493 to 23,062 ha. The housing sector development was dominant, especially from the 1980s to 2015. It even continued to the rapid growth of apartment buildings. Among the five administrative regions in Yogyakarta Province, Sleman is where rapid residential development concentrates. It ranks second for large-scale detached housing (exceeding 100 units) after Bantul Regency, but for small residential clusters (from 10 to 100 units), their development focuses on Sleman. Apartment building construction is predominantly concentrated in Sleman, and then in Yogyakarta. Figure 1 shows the distribution of residential development used as cases for this research.
Second, urbanization and its concomitant physical development were followed by intense socio-environmental conflicts. In Sleman, physical development is associated with the problematic rapid conversion of natural land (Aini, Dewi et al., 2019). As released by the local government, the conversion of agricultural land in Sleman has reached more than 100 ha per year. In an urbanized area, the community objections to new residential building developments are primarily caused by clean water competitions and water scarcity concerns (Suharko, 2020; Yusuf and Purwandani, 2020). Conflicts are also observed in various cases of construction objections by local communities and oppositions from environmental NGOs. The intensity of these conflicts even pushed the local government to issue a moratorium on the construction of hotels and apartments according to Sleman Local Regulation No. 63/2015 on Temporary Suspension of Hotels, Apartments, and Condotels Construction in Sleman in 2015.
Source: Authors' Own; the detailed map (right) is generated using Google My Maps
In our study, eight different cases of apartment and housing development were considered and analyzed for comparison. The selection of these cases was based on the combination of conformity/nonconformity to the spatial plan and the community presence/absence of objection, as presented in .
| No. | Code | Property Type | Location (Suburb) | Year | Land-Use (in the Detailed Spatial Plan) | Land Area (m2) | Price per Unit (,000) in IDR | Sold/Total Unit |
|---|---|---|---|---|---|---|---|---|
| 1 | D1 | Detached | Ambarketawang | 2012 | Limited Agriculture | 8,170 | 807,500 | 43/43 |
| 2 | D2 | Detached | Maguwoharjo | 2010 | Limited Agriculture | 8,004 | 717,500 | 61/69 |
| 3 | D3 | Detached | Maguwoharjo | 2014 | Limited Agriculture | 1,639 | 1,229,375 | 11/11 |
| 4 | D4 | Detached | Trihanggo | 2011 | Housing, Trade, and Services | 3,836 | 556,875 | 28/28 |
| 5 | A1 | Apartment | Depok | 2015 | Limited Agriculture | 4,000 | 269,333 | 406/406 |
| 6 | A2 | Apartment | Depok | 2015 | Service Trade | 1,900 | 398,742 | 117/159 |
| 7 | A3 | Apartment | Depok | 2017 | Service Trade and Settlement | 1,700 | 567,500 | 197/280 |
| 8 | A4 | Apartment | Ngaglik | 2015 | Medium-density Housing | 2,500 | 403,537 | 257/265 |
This research incorporated six steps of analysis flow, as displayed in Figure 2. A representative actor of each stakeholder group was selected and invited to a small focus group discussion (FGD) to determine relevant criteria for each group’s analytical hierarchy process (AHP). Stakeholder types were sampled purposively with a certain criterion—a person or a group that can influence and can be affected by the residential development project. Literature suggests that stakeholders involved in AHP analysis must play critical roles in respective projects(Arroyo, Tommelein et al., 2014; Henke, Cartenì et al., 2020). The criteria in selecting stakeholders include (1) creating stable conditions for investment and development, (2) securing community benefits from development, and (3) promoting urban ecological protection. On the basis of such criteria, six stakeholders related to urban project decisions for the development of residential properties in Sleman were selected: (1) property companies (apartments), (2) property companies (detached houses), (3) buyers/residents, (4) surrounding communities, (5) local governments, and (6) environmental activists. Table 2 presents the list of the respondents in this study.
| Stakeholder | Purpose | FGD Respondent | Questionnaire Respondent |
|---|---|---|---|
| Buyers | To buy or not | 3 local property brokers | 122 families in three urban subdistricts, selected randomly |
| Property Companies (Apartments) | To invest or not | 2 Real Estates Indonesia (REI) members | 12 REI members, selected by snowball sampling |
| Property Companies (Detached houses) | To invest or not | 12 REI members, selected by snowball sampling | |
| Surrounding Communities | To accept or to object | 2 community leaders | 10, set by snowball sampling |
| Local Governments | To permit or to reject | 2 government planners | 2, selected purposively |
| Environmental Activists | To support or to oppose | 2 NGO members | 2, selected purposively |
In general, this valuation was carried out to assess the economic value of development and the resulting economic, social, and environmental impacts. After all components of each variable were estimated (valuation), CBA was performed. Quantitative valuation data inputted to CBA were the survey results, documents on planning, data on the property market, and the Indonesian National Standard on Environmental Management, adjusting a framework from Chambwera, Baulcomb et al. (2012).
The total economic value (TEV) of every development and its distribution in each stakeholder group was computed from the net present value (NPV) generated in CBA. NPV may present the accumulative monetary value obtained from all incomes and expenditures in various aspects in a certain period (Ustaoglu, Williams et al., 2016). The NPV formula is as follows:
The overall NPV results were TEVs (NPV–TEV), where the positive results indicate sustainable land-use decisions and vice versa. NPV–TEV can also show the distribution of the benefit values in every stakeholder group (NPV–SH). All positive NPV–SHs suggest that no party was harmed by development, and possibly, all parties benefit from it. That is, if the positive externalities of each stakeholder group are more significant than the negative externalities that it receives, the proposed land-use is likely to be accepted by all parties. Even if some objections are expressed, they are potentially related to the distribution of benefits that must be proportional to the costs incurred by stakeholders. The ratio of benefits to costs (BCR) incurred represents this proportion. Fairness arising from the development and its multiplier effects were assessed by comparing the BCRs among stakeholders. The BCR formula is as follows:
In this study, CBA was estimated within a 50-year timeframe. The columns contain all types of income (benefits), expenses (costs), and stakeholder groups that benefit or incur costs from the development in the CBA matrix. The following columns present the annual values that the stakeholders receive (benefits) or spend (costs). In addition to these columns, some rows at the bottom show the difference between total income and expenses and NPV, i.e., the cumulative benefit value that has been adjusted to the discount rate. Components and valuation techniques for CBA analysis are presented in Table 3.
| Component | Technique |
|---|---|
| Initial asset values for buyers | The selling price per unit of a property is multiplied by the units purchased. Selling prices can be obtained from brochures |
| Increment of asset values per year for buyers | Inflation of asset values from the previous year |
| Rent values per year for buyers | Monthly market values if the units purchased are leased; these values come from the market value listed in the marketplace platform, then multiplied by 12 |
| Payments from banks on behalf of buyers to developers | Payments to developers as much as the annual installment of the purchase of units sold for the first five years, which is equal to 80% of the property price |
| Down payments from buyers to developers | 20% of the initial asset value (selling price) |
| Land and Building Tax per year paid by developers to governments | Tax is 0.5% of the taxable selling price |
| Licenses paid by developers to governments | 10% of the property price |
| Mortgage paid by buyers to banks | A mortgage in the second to the fifth year after the down payment, with the annual payment of 20% added with a bank interest of 7% |
| Multiplier effects of projects and properties on the regional economy | The total investment value of a project is multiplied by the output multiplier coefficient of Sleman Regency for 66 sectors (i.e., 1.0174); calculated on the basis of the input–output table of Sleman Regency in 2015 |
| Maintenance costs per year by buyers | Maintenance costs per year are calculated by 1% from the total asset selling value |
| Land acquisition costs incurred by developers | Land values obtained using the market value approach |
| Construction costs | Construction costs are obtained using the market approach, i.e., IDR4,000,000 per m2 for detached housing and IDR6,000,000 per m2 for an apartment building; based on the interview results |
| Waste management costs | This cost is divided into (a) domestic solid waste management with IDR25,552 for apartment and IDR21,293 for landed housing; and (b) graywater treatment with the cost of IDR20,000, both for every tenant per month |
| Opportunity losses or costs from production commodities that affect food security | Rice production cost per unit of land area with average productivity of 15 tons per ha for three harvest times and the price of rice per kilo (IDR10,000, using the market approach) |
| Opportunity losses or costs from the trade and services sector whose land has been re-purposed | Calculated using the multiplier effects of the trade and services sector |
| Opportunity losses or costs due to decreased groundwater discharge | These costs can be obtained using the formula Q = C.I.A and by multiplying each discharge by the treatment cost, i.e., IDR1,000,000 (contingent valuation method) |
| Opportunity losses or costs due to sunlight obstruction | Obstructed sunlight decreases the price of the surrounding land by 10% (contingent valuation method) |
| Costs due to noises | Willingness to pay to reduce noise is IDR347,000 per person per year |
| Costs due to congestion with air pollution approaches | Using the air pollution approach, the ability of the land to absorb CO2 is estimated at IDR30.000 per m3 (benefit transfer) |
| Opportunity losses or costs due to decreased clean water supply | A decrease in groundwater reserves in the surrounding environment is multiplied by the price of raw water, i.e., IDR5,500 per m3, and the area of the region (contingent valuation method) |
| Opportunity losses due to decreased water reserves | The groundwater reserves in the surrounding environment decrease by 1,793 per ha, multiplied by the price of raw water (IDR5,500 per m3) and the area of the region (contingent valuation method) |
| Opportunity losses due to reduced O2 production | The ability of green space (agricultural land standard) to produce O2 is 14,833 m3 per ha at IDR30,000 per m3 (benefit transfer) |
The FGD produced criteria that were outlined as questionnaire items and asked all respondents through pairwise comparison, and then analyzed using the AHP technique through these technical steps: (1) calculating the weight of criteria or alternatives through pairwise comparison, (2) creating the comparison matrix, (3) calculating the geometric average for each matrix, (4) calculating the priority (Eigen factor), (5) calculating the maximum eigenvalue, (6) calculating the consistency index, (7) calculating the consistency ratio, and (8) ranking. The results are shown in Table 4.
| Stakeholder | ||||||
|---|---|---|---|---|---|---|
| Stakeholders | Buyers | Property Companies (Apartments) | Property Companies (Detached Houses) | Surrounding Communities | Local Governments | Environmental Activists |
| Purposes | To buy or not | To invest or not | To invest or not | To accept or to object | To permit or to reject | To support or to oppose |
| Criterion Order/Rank | Stakeholder Concern | |||||
| 1 |
Affordability (37%) |
Proximity to the center of activities in the city (48.0%) |
Auto accessibility (51.7%) |
Absence/Presence of costs due to hazardous and toxic materials; for person/group (36%) |
Relation to the central government’s policy (59.4%) |
Absence/Presence of ecological loss (69.4%) |
| 2 |
Legality (26.0%) |
Location image (26.6%) |
Ratio of land acquisition cost to total investment (18.5%) |
Absence/Presence of costs due to wastes; for person/group (18%) |
Amounts of incoming investments, especially the impact on local revenue (23.6%) |
Absence/Presence of social loss (16.4) |
| 3 |
Accessibility (16.8%) |
Area of the potentially acquired land (14.0%) |
Ease of getting loans from banks (14.4%) |
Absence/Presence of loss due to lowered water table at the well (16%) |
Absence/Presence of objection by the community (12.7%) |
Conformity to spatial plans (9.0%) |
| 4 |
Number of rooms (10.1%) |
Ratio of land acquisition cost to total investment (7.3%) |
Location image (6.9%) |
Absence/Presence of loss due to garbage; for the group (12%) |
Conformity to spatial plans/ Possibility of changing the spatial plan (4.3%) |
Absence/Presence of economic loss (5.2%) |
| 5 |
Social status (5.3%) |
Ease and cost of a permit application (4.1%) |
Proximity to the center of activities in the city (4.3%) |
Absence/Presence of direct benefits; for person/group (8.4%) | ||
| 6 |
Physical quality (2.9%) |
Ease and cost of a permit application (4.2%) |
Absence/Presence of loss due to congestion; for the group (6%) | |||
| 7 |
Distance to various urban facilities (1.9%) |
Absence/Presence of loss due to sunlight obstruction; for person/group (2.1%) | ||||
| 8 | Absence/Presence of loss due to noises; for person/group (1.5%) | |||||
Referring to the AHP results above, the rationality that underlays the actors was interpretable. For the buyer group, the first criterion was affordability to show the threshold of the maximum expense that they could incur and, finally, decide to buy. Purchasing means supporting the land-use decision/designation as a real estate. The second criterion was related to expense security to prevent unfavorable outcomes, i.e., the possibility of expense losses without gaining profit. Meanwhile, the following criterion was about how much profit the buyer group would obtain. For example, accessibility and the number of rooms became the third and fourth criteria, respectively. The distance to various urban facilities was considered the last criterion because a substitute is available as long as the development location can be reached by vehicle or various delivery services that can overcome distance. This reason enhances detached house development in this region, encroaching agricultural land in the suburbs and even rural areas. Based on this logic, the buyer consideration is basically how much consumer surplus value (CSV) this stakeholder group obtains from the maximum expense or cost they spend. Standing on this rationality, spatial planning can only function as an essential aspect if it correlates with legality. The cost that buyers consider is termed direct cost, whereas the benefit value is the perceived benefit that is identifiable only by using a survey technique, e.g., willingness to pay. However, when a transaction takes place under normal conditions without any monopolies and forced purchases, the buyer must have gained CSV; in the sense that the benefit value is higher than the spent cost.
For the apartment developer group, proximity to the center of activities in the city and location image were the top indicators, showing that sales opportunities are an essential aspect. In this case, consumer preferences are the most immediate consideration for this group. The same case applies to the detached house developer group, which prioritized auto accessibility as a consideration and believed that this criterion was also crucial for consumers. The following criteria were associated with the investment feasibility concerning the scale and ratio of the capital required. The spatial planning aspect is also less necessary as long as permits can be obtained from or negotiated with the government. The interview results indicated that the developer was somehow confident that they could negotiate any changes to the current spatial plan. Based on the order of the criteria, the development is inclined to proceed with the rationality that merely revolves around investment feasibility. Accordingly, all costs and benefits considered by the developer are direct.
Negative externalities were the primary consideration for surrounding communities, and profit came next. In this rationality, all costs are direct, whereas potential benefits can be direct or indirect benefits. Environmental activists organized as NGOs represent the voice of the wide community. All of their considerations are related to any losses or benefits possibly experienced by local communities; these losses and benefits are not reflected directly in market transactions. Preventing losses is a top priority in their eyes. From this perspective, the costs and benefits that this group considers are mainly indirectly related to ecological and social impacts. In this group, spatial planning occupies the highest priority in screening development investment. Although the government must enforce and safeguard the established spatial plan, due to political interests and economic growth, the ruling regime often has to prioritize obedience to the upper government and guarantee that private investment is not put aside. From this perspective, economically, the government still uses the rationality of direct costs and benefits. It is also confirmed by the attitude of real estate companies responsible for developing apartments and detached houses, which consider ease and costs incurred to obtain permits, rather than conformity to the existing spatial plan.
Simulation Results of Multi-stakeholder CBAAn understanding of stakeholder preference and rationality described previously provides the basis for selecting cases as the components for CBA. These cases represent houses and apartments that have been built and are currently operating regardless of their levels of compliance with the spatial plan, that is, conflicts, compromises or collaborations must have occurred. However, this research does not observe detailed information about whether or not agreement, domination or even pressure from one party to another has taken place. If a good/fair agreement exists, then CBA simulation yields positive NPVs for all stakeholders. Conversely, negative NPVs indicate that a fair agreement cannot be reached, and strong parties may predominate others. In this condition, development can continue even if, for example, discrepancies exist in spatial planning, no permits are issued or objection/opposition reactions are expressed. This phenomenon can indicate the occurrence of disguised approvals/ignorance based on particular motivations. As implied by AHP results, i.e., compliance with the objectives of the government regime, these motivations can be in the form of increases in investment and regional income.
Table 5 presents the characteristics of houses and apartment buildings that have been built and are currently operating around the urban areas of Sleman Regency. Compliance/Noncompliance with the spatial plan was observed by comparing all housing/apartment units with the Spatial Plan of Sleman Regency and examining data on the fulfilled permit requirements issued by the spatial planning agency. Issues of objection by local communities, NGOs, and other stakeholders during the housing and apartment development process were gathered from the news in the mass media. Data on occupancy were collected through interviews and field observations. Details on economic property values were obtained from valuation techniques using a financing approach and a market value. The financing approach was used to estimate construction on the basis of the standard prices of buildings on the market, whereas the market value was assumed from the price listed on the brochures offered by the developer.
| Case no. | Case characteristic | Stakeholder who objects/opposes | Reason for objection/opposition | Garbage management | Waste management | Water withdrawal | Spatial plan type |
|---|---|---|---|---|---|---|---|
| 1 | D1, noncompliant with the spatial plan, no objection/opposition | No | No | Part of the service system, paid by residents | Individual on-site sanitation, still within the environmental capacity | Shallow wells | B |
| 2 | D2, compliant with the spatial plan, rejected by some stakeholders | Surrounding communities | Unlicensed | Part of the service system, paid by residents | Individual on-site sanitation, still within the environmental capacity | State-owned water utility company/Shallow wells | A |
| 3 | D3, (possibly) initially noncompliant with the spatial plan but has been finally granted a permit; rejected by some stakeholders | Environmental activists/NGOs | Farmland conversion | Part of the service system, paid by residents | Individual on-site sanitation, still within the environmental capacity | Shallow wells | B |
| 4 | D4, noncompliant with the spatial plan, no objection/opposition | No | No | Part of the service system, paid by residents | Individual on-site sanitation, still within the environmental capacity | State-owned water utility company/Shallow wells | A |
| 5 | A1, (possibly) initially noncompliant with the spatial plan but has been finally granted a permit; no objection/opposition | No | No | Part of the service system, paid by residents | Part of the integrated wastewater treatment installation | Deep wells | B |
| 6 | A3, compliant with the spatial plan, rejected by some stakeholders | Surrounding communities | Increasing concerns on water table decline, competition with boarding houses | Part of the service system, paid by residents | Part of the integrated wastewater treatment installation | Deep wells | A |
| 7 | A4, noncompliant with the spatial plan, objected by some stakeholders | Surrounding communities | Disturbs the activities of local communities and water provision and causes congestion | Part of the service system, paid by residents | Part of the integrated wastewater treatment installation | Deep wells | B |
| 8 | A2, compliant with the spatial plan, no objection/opposition | No | No | Part of the service system, paid by residents | Part of the integrated wastewater treatment installation | Deep wells | A |
Notes:A: In conformity to the spatial plan since the initial phase of development;B: Initially noncompliant with the spatial plan, but has been finally granted with permit.
For the eight cases, the following process identified the calculation components in each stakeholder, namely, direct and indirect costs and benefits. For buyers, the costs incurred include payments, mortgage payments, maintenance costs, and taxes. From their standpoint, profits are the values of assets owned, including the initial value, added value due to property inflation, and the value resulting from the opportunity to lease the said assets. For developers, costs include land purchases, construction costs, and permit application costs, whereas benefits are derived from asset sales. The surrounding communities/people must spend indirect costs for garbage disposal, waste disposal, hazardous and toxic waste disposal, household waste disposal, water table decline, sunlight obstruction, noise, congestion, and competition with boarding houses. For this stakeholder group, benefits are incentives such as money paid by developers, job opportunities, and opportunities to set up new businesses.
Meanwhile, the government does not incur costs unless infrastructure damages or visible damages occur due to disasters such as floods. The government regime certainly receives income from tax payments and permit applications. The final stakeholder group, which is the public, is represented by environmental activists and can benefit from the additional output multiplier effects on the entire economy, but it may also have to bear water table decline, noise, congestion, and waste disposal costs.
The CBA tables are produced for all cases based on the principles outlined above. Meanwhile, all stakeholder patterns or trends of total NPV experienced are illustrated in Figure3. According to the eight simulated cases, differences in the components of costs and benefits among developments that were compliant and not compliant with the spatial plan were identified. Deviations from the spatial plan where the parcel of land observed was supposed to be used for agricultural practices produced several indirect costs, such as opportunity losses that the public must bear, namely, the loss of opportunity to produce food to meet current needs and as a guarantee of food security in the future and the loss of clean water supply, water storage, O2 production, and CO2 absorption. These additional components of losses affected the NPV of the public and the total NPV of each case. Table 6 summarizes the simulation results that are associated with each case characteristic:
| Case | TEV (Total NPV)* | Total BCR | NPV per Stakeholder* | BCR per Stakeholder | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A | B | C | D | E | F | A | B | C | D | E | F | |||
| 1 | 51.180 | 1.47 | 19.041 | 1.592 | 6.776 | - | (5.718) | 1.677 | 1.87 | 1.12 | + | 0 | 1.41 | 1.13 |
| 2 | 88.086 | 1.46 | 22.936 | 2.034 | 10.064 | (11.902) | 5.059 | 59.896 | 1.92 | 1.12 | + | − | 1.41 | 1.65 |
| 3 | 22.820 | 1.43 | 3.388 | 0.672 | 2.749 | (2.349) | 1.382 | 16.978 | 1.53 | 1.12 | + | − | 1.41 | 2.20 |
| 4 | 40.303 | 2.57 | 12.642 | 0.361 | 3.170 | - | 1.593 | 22.537 | 2.45 | 1.12 | + | 0 | 1.41 | + |
| 5 | 202.157 | 1.88 | 13.614 | 6.548 | 22.228 | - | 11.173 | 148.593 | 1.41 | 1.12 | + | 0 | 1.41 | 7.28 |
| 6 | 283.217 | 1.71 | 22.871 | 10.781 | 32.300 | (21.415) | 16.236 | 222.444 | 1.45 | 1.12 | + | − | 1.41 | 6,499.32 |
| 7 | 184.769 | 1.64 | 13.032 | 6.295 | 21.738 | (14.913) | 10.927 | 147.690 | 1.42 | 1.12 | + | − | 1.41 | 12.78 |
| 8 | 123.352 | 2.10 | 10.929 | 3.840 | 12.888 | - | 6.478 | 89.217 | 1.55 | 1.12 | + | 0 | 1.41 | 2,320.22 |
Notes:
1. A: Buyers B: Real Estate Companies C: Government Regime D: Surrounding Communities E: Banks F: Public
2. *in Billions Rupiah; + denotes High Positive Externalities; − denotes High Negative Externalities
The simulations of the eight cases revealed that all NPV–TEVs of the development up to the 15th year were positive (Figure 3). From this point of view, all projects that were compliant or noncompliant with the spatial plan did not threaten sustainability. No difference in NPV–TEVs was found between (1) the cases that violated the spatial plan and were rejected and (2) the cases that complied with the spatial plan and were accepted by all parties. Moreover, the former even had a higher NPV–TEV because the investment value and the project scale were greater than the latter. However, as seen from the trend, the NPV–TEVs of the cases complying with the spatial plan increased. By contrast, the cases violating the spatial plan and receiving objections/oppositions showed a downward trend.
Figure 3.Comparison of NPV–TEV Trends for Each Case
Meanwhile, in cases where conflicts or violations of the spatial plan took place (e.g., Cases 1, 2, and 3), the NPV of the public was inclined to decrease (Figure 4), which means that if this trend continues in the long term, then the NPV of the public in these cases will be negative. Table 6 also shows that there will always be negative NPVs for surrounding communities in cases that have received objections/oppositions and positive NPVs with an increasing trend for surrounding communities in cases that have been compliant with the spatial plan and received no objections/oppositions.
The NPV of each stakeholder group in each case was different, especially for the public, affecting the total NPV in each case. In Case 1, the NPV of the public showed a downward trend and is the lowest among other cases (IDR 1,677,139,445 by year 50). In Case 8, the value showed an inclined trend with 13,11% increasing by year 50 (IDR 89,216,767,329). Further examination revealed that Case 1 deviated from the spatial plan, whereas Case 8 complied. In the spatial plan, Case 1 was supposed to function as limited agricultural land, and Case 8 was in accordance with the area’s designation despite the opposition conveyed by a group of people. Opposition by surrounding communities was likely to be caused by increased competition in the lodging business and disproportional profit distribution from the land development.
Figure 4.Comparison of NPV Stakeholder Group for Each case
These simulations revealed consistent results for all eight selected cases. The NPV–TEVs of cases where the developments complied with the spatial plan were always positive and showed an upward trend, whereas those where the developments violated the spatial plan were positive but with a decreasing trend. In the long term, the NPV of the public in all cases was inclined to decrease. Cases that were not compliant with or compliant with the spatial plan but still received objections/oppositions produced negative NPVs. BCR indicates that cases where land development was compliant with the spatial plan were more profitable than otherwise. Cases that conformed to the spatial plan and received no objections/oppositions had the highest BCR, as seen in Cases 4 (2.57) and 8 (2.10) (Figure 5).
Figure 5.BCR Trend for Each Case
The fundamental difference between the applications of CBA in this research and previous studies lies in determining the cost and benefit components associated with the interests of diverse stakeholders. As previous studies suggested, mapping and assessing various stakeholders are essential in studying urban development conflicts and evaluations(Elfversson and Höglund, 2018; Lombard and Rakodi, 2016; Nae, Dumitrache et al., 2019; Yuan, Chen et al., 2018; Zepharovich, Ceddia et al., 2021).
Hence, in this study, the mapping of stakeholders and their aspirational interests was integrated with CBA as the framework for evaluating urban land-use. Then, AHP contributed to making stakeholder preferences on the basis of their groups to capture the actual condition in the field. A combination of multi-stakeholder assessment, multi-criteria through AHP, and CBA was beneficial to perform rational and shared perspective project evaluation (Henke, Cartenì et al., 2020), enhancing the degree of objectivity of the evaluation performed by this study. Therefore, the multi-stakeholder CBA has the prospect to be developed as a tool for evaluating the three pillars of land-use plan sustainability.
In the context of Indonesian urban land-use and development planning, multi-stakeholder CBA may be used in two conditions. First, this proposed framework may equip ex-ante and ex-post evaluation projects in including techniques for stakeholder interest identification. As this research has demonstrated, multi-stakeholder-focused CBA may provide further accountable, objective, and comprehensive results from the diverse stakeholder point of view. Second, it may be used solely by local governments to assess potential impacts and conflicts of development permit proposals during the review process. The wide community and stakeholders must also be well-informed by making the costs and benefits of urban development projects transparent to the public (Ronnle, 2017; Roy, 2021). By doing so, impact and conflict mitigation can be well-planned and anticipated by all stakeholders.
This study proposed a land-use decision evaluation framework by using CBA integrated with stakeholder interest mapping. This method can provide empirical information regarding stakeholder concerns about urban land-use and development. When CBA is complemented with stakeholder interest mapping through AHP, CBA now has the capacity that allows its users to make assumptions more representatively than before by recognizing concerning cost and benefit components, as discovered by stakeholders. Through this analysis, NPV and BCR for each stakeholder can be identified and estimated in detail, which is beneficial in identifying externalities that potentially cause conflicts or supports from diverse stakeholders. Moreover, stakeholder preferences that are identified through AHP can indicate the degree of importance of stakeholders in the land-use decision-making process.
This study acknowledges limitations and provides recommendations. It takes already-built urban residential projects as cases for simulation, which makes this work offer an ex-post evaluation framework in nature. Future research can apply the proposed framework to examine projects that have not been developed or implemented. It aims to contribute to literature on ex-ante evaluation for urban development projects. Future research can also examine this proposed framework and apply it to other urban development sectors, such as environmental projects, disaster risk reduction, and even social development.
Conceptualization, RWDP, LDP; methodology, RWDP, LDP, RBA; data curation, LDP; data analysis, RWDP, LDP, RBA; writing—original draft preparation, RWDP, LDP; writing-review and editing, RWDP, LDP, RBA; supervision, RWDP. All authors have read and agreed to the published version of the manuscript.
The authors declare that they have no conflicts of interest regarding the publication of the paper.
We would like to thank the Master Program on Regional and City Planning, Universitas Gadjah Mada, for facilitating planning studies in this research topic and collaborating with the Spatial Planning Agency of the Sleman Regency. Our gratitude also goes to the Regional Secretariat of Sleman Regency for the collaboration in researching the prospects and challenges of developing high-rise residential buildings in Sleman, which also serve as our data sources. This study did not receive any specific grant from funding agencies in public, commercial or not-for-profit sectors.
