Segregation and Gentrification of an Informal Settlement in a City Center

In this research, we investigated the instance of segregation and gentrification in Cikini, a place where formal and informal settlements coexist with walled separation. We conducted a mixed-methods research study using the following: (1) a field survey to observe the physical relationship between the perumahan and kampung settlements; (2) mapping of building age and land use patterns; (3) interviews with key respondents, community leaders, street vendors, and market vendors. We found that residential segregation in Cikini is not based on people’s racial identity, but on their socio-economic status. The spatial separation of people from different socio-economic classes cannot simply be understood as inequality. It represents some features of segregation, such as: (1) a fixed physical barrier between the perumahan and kampung, despite mutual social and economic connections between the two; and (2) the fact that there is no permanent residential mobility between the two despite the economic mobility experienced by people in the kampung settlement. Interestingly, we found that kampung settlement does not experience gentrification while the perumahan is slowly gentrifying. We attribute this uniqueness of the kampung settlement to its resilient social fabric.

Gentrification; Housing; Informal settlement; Kampung; Segregation

Segregation and gentrification problems occur in every country in the world. Cikini, an informal settlement in Jakarta, epitomizes the segregation and gentrification that occurs in Indonesia. Cikini has two kinds of urban settlements: formal and informal. The difference between the two settlements creates economic and social inequality, which can be seen in the physical separation. Separation occurs because of the differences in economic growth rates which affect the income level of Cikini's residents. As a result, the quality of public facilities and services is poor (Kato, 2012). The poor quality of public service in Cikini decreases the productivity and income of Cikini's informal settlement residents. The disparity in income levels of the informal and the formal settlement residents creates social problems in the society.

Social problems in lower-class societies create another problem: evictions. The eviction does not happen directly through expulsion. However, without government regulations to protect the informal settlement that has low property prices, investors can develop the area without considering the community's needs.

The level of economic growth in a region depends on its people's skills level. The difference in people's skills level in a region can affect production processes. The development of production processes can, in return, increase the productivity and income of the people that live in that region. Differences in income levels create divisions in economic class (Smith & Harvey, 1990). The existence of different economic classes illustrates the importance of production process development in accordance with the population’s potential.

Production processes can be developed in accordance with the population’s potential by using natural resources. Production processes that correspond to the population's skills can increase the community’s productivity and income. The increase of the community’s income can improve the community’s economic class (Smith & Harvey, 1990).

Area separations within a region are the result of economic divisions in the society. Economic division occurs when there is a change in the required worker skill level due to the development of the production process. Workers with enough skills to operate advanced technology belong to the higher social class, while the workers without these skills belong to the lower social class. This economic division demonstrates how a change in production processes can affect social division. This shows how the development of production processes that are not in line with society's skills can lead to social inequalities (Smith & Harvey, 1990).

The difference in social class often indicates different levels of economic growth. An increasing economic growth rate can also increase the social gap. Improvements in a community’s production process that increases the population's skills can improve the economy of the community. Changes in people's quality of life can also cause changes in social class. The difference in regional economic growth will affect how each region develops (Smith & Harvey, 1990).

Uneven development creates a division of areas based on economic and social classes. The economic and social disparities create physical boundaries within regions; this phenomenon is called segregation. Discrimination also influences segregation, which, in turn, prevents low-income people from raising their income (Massey & Denton, 2012). The separation of informal and formal settlements based on economic and social disparities is a form of segregation and uneven regional development.

Segregation is not only formed as physical boundaries but in non-physical boundaries that prevent low-income people from moving to high-class areas. In the United States, segregation occurs when there is discrimination against low-income people through access (either physical or social) limitation (Wilson, 2012). Access limitation prevents low-income people from getting better jobs and proper public services. Improper public services for low-income people decrease society's productivity (Massey & Denton, 2012). This affects low-income people because low social productivity means they cannot increase their income. The better their income, the better the area they can live in; if low-income people cannot increase their income, it affects their ability to buy a house (Herbert et al., 2013).

The existence of lower economic classes in the downtown area shows the existence of low-value properties among high-value properties. Downtown low-value properties attract investors to invest in those areas. Property development in lower-class areas increases property selling prices and potential increases in property rental rates. If property rates increase because of development, the lower economic class tends to be pushed out (Smith, 1979; Slater, 2017).

This research finds that, in theory, Cikini’s economic growth rate depends on its people’s skills. The difference in the level of expertise between the informal settlement residents and the formal settlement residents generate socio-economic inequalities, contributing to physical boundaries between the areas. The separation of the informal and the formal settlements is a form of segregation. However, segregation in Cikini is not based on discrimination, but on the difference of opportunity to access better public facilities and services. Although street vendors can enter the formal settlement area, they can only sell their products on the sidewalk. These differences in opportunity increase the socio-economic gap, thereby preventing the informal settlement residents from living in the formal settlement due to the high property value and price. This shows that segregation in Cikini occurs because of the differences between the economic growth rate of the informal and formal settlement of Cikini.

Our finding challenges Smith’s (1979) theory that gentrification occurs because the informal settlement in the downtown area attract investors. However, some of the properties in the kampung that have been repaired still belong to the informal settlement residents. Some property improvements in Cikini’s kampung provides low-cost rental houses to new kampung residents but does not indicate gentrification of the area. On the other hand, the formal settlement has a comparatively high amount of regional development, thus increasing the property values. The increase in property value and tax in the formal settlement drives some of its residents to move away. The houses that are left behind are then purchased and transformed into new offices or houses for people with higher income.

This work is supported by Hibah PITTA 2018 and funded by DRPM Universitas Indonesia No. 2365/UN2.R3.1/HKP.05.00/2018. The authors remain responsible for the content of this paper.

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