ABSTRACT
There are two types of zoning: rigid and flexible, with the latter gaining popularity in recent years. This research aims to scrutinise the flexible zoning stipulated in Jepara, one small city in Indonesia. Despite its less preferred location, Jepara attracts more investments than other small cities in Central Java Province, showing that flexible zoning has a substantial impact on investment decisions. Incoming investments boost the economy and create jobs. However, negative consequences emerge, such as uncontrolled development, pressure on the agricultural sector, and threat to traditional local industries. Those undesirable effects result from Jepara’s oversight to assemble its zoning following the technical requirements to make sound flexible zoning, resulting in some weaknesses in the zoning. The zoning’s flaws occurred because when Jepara’s spatial plan was in the making, firms were still concentrated in big cities, and competition to entice investments among small cities had not yet started. Hence, the Jepara government opted for flexible zoning not based on the intention to attract firms and did not predict that such zoning would lure many companies to come, which eventually produced adverse effects.
