The paper is aimed to analyzing determinant factors in resettlement decision by household heads in illegal settlements within city of Palangka Raya in Central Borneo Province, Indonesia. The three illegal settlements which are Flamboyan, Mendawai, and Danau Seha were units of analysis. An urban economics approach with the help of simple flood risk assessment to create a flood risk map, is used to this analysis.
Mushrooming of illegal settlements in urban areas is becoming an urban problem in many growing cities in developing countries nowadays. Resettlement or displacement might be one possible option to solve this urban problem. But how the decision will be taken by the settlers is a focus of this paper. There are two determining factors that affected household head in taking decision of resettlement. They are perception of risk level and proximity to a centre of economic activities.
If expected utilities in the place of origin are constantly become worse due to illegality factor that resulted to a less attention of local government and providers to redevelop damaged utilities, then exposure to flood hazard will become larger. This deterioration will be a push factor for settlers to take resettlement decision and will be a pull factor in the place of reception. Hence if expected utilities in place of origin constantly become worse while expected utilities in place of reception is presumably remain the same, resettlement option will be taken by household heads.
Keywords : illegal settlement, resettlement decision, household head, determinant factor, expected utility