Challenges in Bali’s Property Development: Navigating Growth Responsibly

For anyone who has been in Bali since the COVID-19 pandemic, the rapid property development across the island is impossible to ignore. The global media has showcased Bali’s natural beauty but also highlighted the downsides of this growing development. Political leaders are now considering a moratorium to control or even halt this expansion. But how did we reach this point? What are the core issues behind Bali’s current property boom, and how can they be addressed?

Clear Regulations, Misplaced Development

In Bali, property development regulations are well-defined. Indonesia enforces zoning regulations, designating specific zones for hotels, villas, and residential housing. Yet, some local political figures and tourism unions are pushing for a moratorium to control unplanned development in certain areas.

For years, developers have built in unauthorized zones. Bali’s community, organized by the Banjar, has a unique role in local development, overseeing community welfare, including monitoring new builds and ensuring local contributions. However, some areas unexpectedly find themselves crowded with properties in green zones, places originally intended for agricultural or cultural purposes. The Banjar may not have foreseen the current scale of development, and now faces the challenge of regulating established projects.

Local and Foreign Responsibility

Regulatory challenges arise not from a lack of rules but from inconsistent enforcement across the community. It’s not solely foreign buyers driving this development—local owners also contribute, selling their land for projects that may not align with the island’s zoning intentions. Reports suggest some Balinese have even faced pressure to sell their land, disrupting the island’s cultural and natural heritage.

While zoning laws were established with clear objectives, some foreign developers, often the first to voice concerns about infrastructure, bypass regulations by working with intermediaries to alter zoning classifications. The result is a landscape where villas spring up in areas ill-suited for dense development, straining roads and utilities in zones not intended for high occupancy.

Essential Building Permits

Every construction project in Bali requires a building permit (PBG), with approvals from the Ministry of Public Works and Housing (PUPR) before construction. Unfortunately, some projects proceed without permits or with only partial legal documentation, such as an SLF, instead of the PBG. Developers exploit regulatory gaps, creating properties that operate without necessary permissions. Without stricter enforcement, a new moratorium won’t change the underlying issues.

In Bali, design and architectural compliance are critical. Approvals involve careful review of construction plans, but many structures fail to align with these standards. Villas and residences with designs that diverge from Balinese architecture, like Mediterranean-style homes, dilute Bali’s unique aesthetic.

Impacts of Uncontrolled Development

Unchecked development risks destabilizing Bali’s cultural, ecological, social, and economic well-being:

• Cultural: Bali’s unique heritage is under threat. Development has encroached on sacred spaces, and some temples now feel more like attractions than spiritual sites, eroding the island’s traditional allure.
• Ecological: Parts of Bali, especially the southern regions like Pecatu and Uluwatu, are already experiencing severe water shortages. An influx of water-intensive properties worsens this deficit, challenging sustainability efforts.
• Social: A visible tension exists between locals and foreigners, sometimes leading to hostility on social media. This friction stems from disrespectful behavior but is also influenced by local practices, such as helmet use, that foreigners may mirror.
• Economic: Cultural degradation and environmental stress risk tarnishing Bali’s appeal as a tourist destination, potentially leading to fewer visitors and economic losses for local communities reliant on tourism.

Shared Accountability

Responsibility rests with all parties involved. Foreign buyers should avoid purchasing properties without the appropriate building permits, and real estate agents should not list them. Notaries and legal advisors must be transparent, and SLF approvals should follow, not precede, construction. When Banjar officials, developers, and agents work together, compliance can become the norm.