Kuala Lumpur: The Urban Renewal Bill (URB), currently being drafted, aims to ensure fair implementation of redevelopment projects and benefits for property owners while contributing to the country’s economic growth.
According to BERNAMA News Agency, the director-general of Town and Country Planning Department (PLANMalaysia) at the Ministry of Housing and Local Government (KPKT), Datuk Dr Alias Rameli, emphasized the necessity of the bill to address the issue of dilapidated buildings, particularly in major cities such as Kuala Lumpur, Johor Bahru, and Penang. He highlighted the need for specific legislation for urban renewal to prevent buildings over 30 or 50 years old from remaining in a state of disrepair in city centers.
Dr. Alias mentioned that previous redevelopment guidelines lacked legal enforcement and depended on local authorities and relevant agencies. Therefore, a clear source of authority is essential to coordinate urban redevelopment efforts more systematically. A special briefing on the bill took place in Parliament on February 18, attended by over 150 Members of Parliament.
He clarified that the bill does not intend to arbitrarily seize owners’ properties. The primary goal is to ensure urban redevelopment is conducted with owners’ consent, adding value to their properties. Records indicate that 534 old buildings have been identified nationwide (excluding Sabah and Sarawak), including 139 sites in Kuala Lumpur, listed in the 2040 Structure Plan. The estimated gross development value (GDV) for these 139 sites could reach RM355.3 billion, contributing significantly to the national economy.
The URB is based on three main principles: the consent of the owner, the rights of the original owner, and a clear development period. Owner consent is critical before implementing a redevelopment project. The proposed bill will introduce a new consent threshold based on the building’s age, requiring 75 percent consent for buildings over 30 years old, 80 percent for those under 30, and 51 percent for unsafe or abandoned buildings.
The second principle ensures the original owner receives a fair return. For example, in Residensi Kerinchi, a 400 sq ft unit valued at approximately RM70,000 was replaced with a new 800 sq ft unit worth RM450,000. The third principle mandates a clear development period, with a maximum construction period of 36 months for strata houses. Temporary accommodation must be comfortable and conducive for owners involved in the redevelopment.
The bill introduces a mechanism for owners who oppose redevelopment. If owners refuse the offer, options include the developer purchasing their unit, the government taking the land under the Land Acquisition Act 1960 with appropriate compensation, or seeking compensation in court. The government will ensure a fair offer to landowners, based on a ‘one-to-one’ or ‘not less favourable’ concept, meaning owners must receive a new unit better than the original. Developers are prohibited from engaging in preliminary negotiations.
Dr. Alias stated that development for economic or public interest purposes is the government’s right, but the right to compensation is guaranteed under the Constitution and the Land Acquisition Act. The government will facilitate to prevent owners from being adversely affected amid various developer offers.
Regarding relocation guarantees, Dr. Alias mentioned that developers with unsold vacant buildings might relocate temporary owners to nearby locations. If adjacent placement is not feasible, developers remain responsible for providing alternative solutions, including rental of temporary houses, with costs borne by the developer. If issues arise, the executive committee at federal and state levels will ensure project implementation aligns with government agreements. The government has anticipatory measures to address such cases effectively.