Consider facts of Urban Renewal Act

The Star

15-05-2025

1Razak Mansion is repeatedly cited as an urban renewal success story (despite ongoing issues such as maintenance deficit) and is, perhaps deservedly, the poster child for this formative stage of legislation and policy making.
It is true that old Razak Mansion dwellers were successfully re-housed without the help of any Urban Renewal Act. Similar 'in-situ resettlements' for facilitating urban renewal could potentially be likewise achieved.
The Housing and Local Government Ministry's (KPKT) guideline on urban renewal implementation, which drew from the learnings of Razak Mansion and was launched in September 2023, did not contemplate the existence of any Urban Renewal Act (URA).
It was detailed enough in its process flows that we can see how it could work without a URA.
This is no reason to outright reject the potential merits of having URA – potential that could only be achieved through a much more inclusive and rights-based consultation of the Draft Bill's provisions than what we are seeing now.
Specifically for Kuala Lumpur, which has a different town planning Act (Act 267 instead of 172), a form of 'URA' already seems to be embedded therein, at a level of detail not contemplated by the rest-of-country's Act 172.
Most notable among that detail is the Action Area provision, the declaration of which affords a window of opportunity for owners to exercise their right to self-initiate redevelopment, before a state actor authority can take over.
The passage of Act 267 (Federal Territory Planning Act) warrants a tribute to the wisdom of Parliamentarians of the era.
The proliferation of strata properties since then also means that in the majority of cases, (self-)Action Area is unlikely to materialise with the owners having to gather 100% consent.
Therefore, for KL, as with the rest of the country, the best prospects for a way forward lie in all-stakeholder consul­tation with open and equal access to statistics and sectoral expertise, founded upon a clear acknowledgement of the need to balance economic priorities and the right to do business, versus the rights of citizens.
The URA's Draft Bill proclaims itself as a 'town-planning law' while describing its 80% (or 75%) prescriptions as 'consent thresholds'. This is totally different from consent thresholds in foreign countries, which are in land/property law. For example, Singa­pore's is in its Strata Titles Act, which we have here too, as Act 318.
From the information available, there is no intention to amend Act 318's 100% consent requirement for terminating a strata scheme.
So our URA seems to be really about adding some kind of structure to the 'Razak Mansion' way of doing it, and in the process, augment the bureaucratic structures (or to create them where they did not exist before) – and set these up as chains of authority that would eventually be applied towards dealing with the minority non-consenters upon the minimum threshold being met.
No one should be penalised for personal circumstances that would make no good sense for them to follow the crowd.
On the other hand, it is also true that a hyper-majority should not be made to suffer because of an unreasonable individual.
Singapore's consent thresholds (80% generally and 90% for newer properties) facilitate profitable en bloc sale through competitive bidding, orchestrated by a Collective Sale Committee elected from among the owners themselves.
The sellers typically enjoy a massive value uplift as potential (re)developers seek to outbid each other.
But this only happens for higher end/private strata properties. It does not work this way for owners of public housing built by the housing development board (HDB).
Malaysia's urban renewal needs are much skewed towards this 'HDB-equivalent' segment, but are not supported by any unifying/federal framework which enables redevelopment of a common class of public housing (in the manner that city-state Singapore can).
Seen in this light, it is understandable now why our legislative trajectory for urban renewal is not putting its 'consent threshold' into a land/property law, in which logically, no one else but the owners would have the right to negotiate.
So, this again points to the potential merits in having a URA – with all the appropriate processes and safeguards for achieving acceptable outcomes despite our contrasting approach to the problem, i.e. the public-private partnership models which devolve too much on private sector initiative/control.
Fundamentally, the entire premise of promoting in-situ resettlement through 'joint-venture participation' of the owners is about reducing developers' capital outlay by taking away 80% of the land acquisition costs and shedding a signi­ficant part of the economic risks to owners.
This basic truth must feature prominently in finding a morally appropriate balance between the rights of businesses and ordinary citizens.
Peter Leong
Public policy adviser
KL Residents Action for Sustainable Development Association (KLRA+SD)