Proposed URA: Consider the facts and hard truths

New Straits Times

12-05-2025

1Razak Mansion is repeatedly held out as the success story of urban renewal, and (despite on-going issues such as maintenance deficit) is perhaps deservedly the poster child for this formative stage of legislation and policy making.
It is also true that old Razak Mansion dwellers were successfully re-housed without the help of any Urban Renewal Act (URA) - and that similar 'in-situ resettlements' for facilitating urban renewal could potentially be likewise achieved.
The Housing and Local Government (KPKT) Ministry's guideline, Garis Panduan Pelaksanaan Pembaharuan Semula Bandar, which drew from the learnings of Razak Mansion and was launched in Sep 2023, did not contemplate the existence of any URA.
It was detailed enough in its process flows that we can see how it could work without a URA.
But irrespective of the polemics and political narratives, this is no reason to reject outright the potential merits of having a URA - a 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 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 state actor authority can take over.
[Page 4291 of the Hansard of 22 Oct 1981: The passage of Act 267 (Federal Territory Planning Act) through Parliament - a tribute to the wisdom of Parliamentarians of the era]
But even this cannot be the silver bullet, even if only for KL.
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 per cent 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 ordinary citizens.
The URA's Draft Bill proclaims itself as a 'town planning law' while describing its 80 per cent (or 75 per cent) prescriptions as "consent thresholds".
This is totally different from consent thresholds of foreign countries that KPKT has (perhaps inappropriately) benchmarked us against, which are in land/property law.
For example Singapore's is in their Strata Titles Act, which we have here too as Act 318.
From the best information available so far, there is no intention to amend Act 318's 100 per cent 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.
Others have already written in depth about the evils of compulsory acquisition of minority holdings and the likelihood of unfair (under-) valuation of minority units i.e. at existing resale market value without any uplift for plot ratio/GDV enhancement, on the basis that "they refused to participate in joint venturing with the developer".
Simply put, no one should be penalised for personal circumstances that 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 by the unreasonable individual.
Singapore's consent thresholds (80 per cent generally, and 90 per cent for newer properties) which is under their strata property law facilitates profitable en bloc sale through competitive bidding, orchestrated by a Collective Sale Committee elected from among the owners themselves.
These are very "enriching" to the sellers who 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) (google: Selective En Bloc Redevelopment Scheme or 'SERS').
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 - not necessarily focused on just the 'HDB-equivalent' categories, but certainly with all the appropriate processes and safeguards for achieving acceptable outcomes despite our starkly contrasting approach to the problem, i.e. the Kerjasama Awam Swasta (Public Private Partnership) models which devolve or 'abdicate' too
much to 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 per cent of the land acquisition costs, and shedding a significant part of the economic risks to owners.
In the complex economics and intricacies of executing redevelopment projects, this basic truth must feature prominently in finding a morally appropriate balance between the rights of businesses and ordinary citizens.