The Decline in Housing Supply after the Emergence of Lapindo Mudflow Disaster in the Peri Urban Areas of Surabaya

The space in peri urban areas always becomes a popular choice for private developers nowadays to build housing in a large scale. The growing number of housing in the peri urban with this large scale commonly termed as invasive formative process. It happens in almost all major cities in the world, as in major cities’ peri urban in America, Mexico City, Beijing and even in the peri urban of Jakarta and Bandung. However, a different phenomenon has occurred in the peri urban of Surabaya, particularly in some districts that scattered in Sidoarjo Regency. In 2006-2010, the provision of housing has drastically decreased. The comparison between the target and the development realization of the new housing were less than 50%. The number of developers who were not active even has risen to 132 developers at the end of 2010. This causing an imbalance situation between supply and demand chains because the number of housing needs will reach at least 107.277 units by 2015. A hypothesis that appears as the cause of the problem is caused by the presence of Lapindo mudflow disaster. However, the results of this research have shown that the factors led to the decline in housing provision issues are very complex. Based on the collaboration results between Delphi analysis and geographically weighted regression (GWR), we found that each district has different causes. In general, the factors that cause this problem are due to the stability of the macroeconomic, the difficulties in land acquisition, development impact fees, the high transaction costs, and the direct impact caused by Lapindo mud disaster.