For those who have been in Bali since the Covid era, it has been impossible not to see property development happening there. The news and media around the world have been showing the beauty of Bali and the downsides of this development. Politics are now working on a moratorium to stop or control the development of Bali. But how have we arrived at this situation? What are the real problems behind Bali’s development, and how can we fix them?
As a legal advisor, ILA Global Consulting has worked with developers, real estate agents and investors. We have seen things changing in the last decade.
Regulation in Bali on property investment
Some politics and tourism unions are calling for a moratorium on property development to stop developments in some areas. The regulation for property development in Bali is clear. Indonesia has some zoning with a clear spatial regulation where hotels can be built, villas, residential houses etc.
Zoning in Bali
It has been decades since developers and buyers have been building in unauthorised zones. Bali is famous for its strong community called Banjar. It is unfortunate Banjar did not see the development in Bali and suddenly woke up with a lot of properties developed in a green zone. Banjar is patrolling areas and anything has to pass by them, even local financial contributions. How did it happen?
The issue is clearly not a lack of regulation, and another regulation will not change anything as long as the authorities do not apply the regulation to the whole community. Foreigners are not the only ones responsible for this development. The ones selling their land are Balinese themself. Some locals have reported being pressured to sell their land. This situation is clearly unacceptable on an island we all love for its culture and beauty.
Building permit
Buildings in Bali require a building permit, and the regulations are clear. Every development has to be approved by the PUPR. Construction cannot start without a PBG. In this building permit story, politics and administration have to take a look. We are facing deals where parties do not have the right building permit. Foreigners are buying consciously without a PBG, and for some reasons that would be complex to describe, some developers succeed in getting an SLF despite having started the construction illegally. How can it happen?
Authorities know this practice, and another moratorium will not change anything if the practice continues.
Approving building permits typically requires reviewing architectural plans. Bali enforces regulations for design and construction, but many constructions proceed without following these requirements. Bali is seeing mediterranean houses, what happened to Bali?.. Who approved the design of the houses?
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Consequences of property development in Bali
Bali is facing several risks that could be dramatically important to the future of Bali:
- Cultural issue
- Ecological issue
- Social issue
- Financial issue
The first risk is obviously the cultural issue. Due to this development, Bali has lost its essence and culture. The pressure of development has seen some sacred trees being cut. Temples have become more of a Disney Land area than a cultural and holistic place.
This pressure also has consequences on the ecological side. The south of Bali is in a hydraulic deficit. Pecatu and Uluwatu see hundreds of trucks delivering water every day. Properties in development at the moment are facing a surge of water demand and none know how to face the situation in the next few years.
This pressure has some social issues with an emergence of social bashing on foreigners on social media with a hate on some developments. Indeed a few foreigners had bad behaviour but the behaviour has been a mimic of what was happening here. As we used to say, if all locals were having a helmet none foreigners would probably drive with no helmet.
All those issues above can lead to some financial issues and tourists suddenly changing their mind coming to Bali. Who would come to Bali if the culture disappeared, you can’t have a proper shower and you feel locals not welcoming you?
We are all responsible for what is happening
As foreigners, we also need to say stop. If a villa has no building permit, this villa should not be listed with real estate agents, and this villa should not be accepted by a notary. SLF should not be delivered after the construction, and legal agents should advise their clients. The administration and Banjar should report it, and developers will start tomorrow to apply the regulation.
Only outsiders probably are not supposed to know what is going on. All insiders are suddenly surprised that there is suddenly a moratorium while everybody knows what’s going on. We see developers having media exposure, but everybody knows they do not have the right permit to build and authorise. Rich local investors and foreigners are pushing to change some zoning and get authorisation while other local people or poor families are under pressure to sell.
The future of Bali depends on us, especially the Balinese. It is their land, and it is time to reinforce the regulation and kick-off. The regulation doesn’t have to be changed. It is time to apply the regulation and provide the right administration. The Indonesian government and Balinese have our support on this.
Also read: How to Avoid Bali Scams on Property
