Malaysia redevelops old apartments

The Malaysian government is currently pushing to redevelop old apartment buildings to modernize the city, but residents disagree because they fear losing ownership and escalating housing prices.

The fate of Malaysia's old apartment blocks remains a big question mark in the country's urban modernization process - Photo: MALAY MAIL

The process of renovating old apartment buildings often comes with major challenges, from resettlement costs, selective urban modernization pressures to conflicts over ownership rights.

No need for 100% resident consensus

According to Malaysia's Kuala Lumpur Infrastructure Plan 2040, 139 public and private properties, including 91 apartment buildings, have been identified as having potential for redevelopment, the Straits Times reported on March 23.

To do this, the government plans to submit the Urban Redevelopment Act (URA) to parliament next July to provide a legal framework for the redevelopment of old urban areas and apartment buildings.

Under current law, redevelopment of apartment buildings requires absolute consensus from all owners, and this often makes renovation projects difficult.

The URA Bill proposes to empower federal and state regulatory committees to undertake redevelopment projects without 100% consent from owners, helping to promote urban modernization.

According to Malay Mail, if the bill is passed, apartment buildings under 30 years old can be sold with the consent of 80% of the owners. For buildings over 30 years old, the required consent ratio is reduced to two-thirds of the owners. As for buildings that are abandoned or considered unsafe, only the approval of 51% of the owners is needed to proceed with the sale.

Mr Nga Kor Ming, Malaysia's Minister of Housing and Local Government, stressed the need for the bill to replace outdated regulations and address the deterioration of urban areas.

According to the minister, as of July 2024, Malaysia has identified 534 potential locations for urban redevelopment, of which 139 are in Kuala Lumpur, with the total estimated value that these redevelopment projects can generate upon completion being approximately RM355.3 billion (USD79.6 billion).

Opportunity or risk?

Malaysia's New Straits Times reported that the federal government and states have pledged to provide incentives to ensure the bill is successfully implemented.

Minister Nga Kor Ming affirmed that owners of planned properties will be guaranteed the right to receive new properties of equal size or higher value, and benefit from improved infrastructure and environment.

The government also stressed that it would consult with owners to protect their interests. The valuation of new properties would be based on current market value and future potential, with profits controlled to avoid speculative profiteering.

In addition, if the consensus level of 75 - 80% is not reached, the redevelopment project will not proceed and residents' opinions will be carefully considered before a final decision is made.

However, the idea has faced strong opposition from many quarters and concerns from experts. The opposition, especially the Malaysian Islamic Party (PAS), has turned the bill into a political controversy, accusing the government of wanting to push low-income people, mainly Malays and Indians, out of the city center.

The PAS party believes that after redevelopment, house prices will soar and residents will be left with little or no ability to buy their own homes.

Meanwhile, those who own real estate or are living in areas subject to redevelopment are also overwhelmed with worries about the future.

Sukhdev Singh Cheema, a longtime resident of an old apartment building in Kuala Lumpur, said he and many of his neighbors were upset that the new law could force them to leave the building during redevelopment. They also feared that after the renovation, they would not be able to afford to continue living there.

“Why does the government want to redevelop this condominium? The only thing we need is to repaint the exterior and fix the external plumbing,” he told The Straits Times. “Currently we pay a maintenance fee of RM80 (about US$18) a month, but even so, some retirees still cannot afford to pay that amount.”

Unlike Mr Cheema, lawyer Syed Khaled Alasrar - who owns two apartments in Kuala Lumpur - said the redevelopment plan was necessary to keep up with the development of society but needed to ensure fairness and not put poor homeowners at a disadvantage.

"I think the old residential areas look very shabby. Redevelopment is necessary to upgrade the structural, electrical and drainage systems to ensure the safety of residents," he said.

According to Nischal Ranjinath Muniandy, senior fellow in public finance at the Institute for Democracy and Economic Affairs, redeveloping aging infrastructure could have a major impact on urban development and spur the regeneration of major cities across the country, creating opportunities to revive abandoned and dilapidated buildings, especially in historic centers where the cost of renovation to meet modern standards is often prohibitive.

Experience in renovating old apartments in Singapore

The Selective Enclave Redevelopment Scheme (SERS) is a Singapore Government initiative to modernise old public housing estates, optimise land use and upgrade urban infrastructure.

Launched by the Singapore Housing Development Board in 1995, the programme allows the government to select old housing estates for demolition and reconstruction, while providing affected residents with new, subsidised flats in the same area.

SERS residents also get priority housing before new apartments are widely available, along with reasonable financial compensation.

Read more Back to Topics

Source: https://tuoitre.vn/malaysia-tai-phat-trien-cac-chung-cu-cu-20250325062310343.htm