By Joseph Wong

This journalist’s hairs stood on end after hearing Town and Country Planning Department (PLANMalaysia) planning, legislation and regulation director Zamirzan Puji say that only the most competent developers would be chosen for redevelopment projects to ensure they would not become sick and subsequently abandoned. 

This statement followed a question during a heated forum on the proposed Urban Redevelopment Act from National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong, who asked, “What if the redevelopment project becomes a sick one? What guarantee does the original owner have?”

In reality, there are really no guarantees. The names that appeared on the sick and abandoned projects list include reputable developers who were perceived to be competent. As a reminder, there are numerous projects in Malaysia and Kuala Lumpur in particular which were started by property companies which were riding high on their fame as reputable developers. As the nation has seen and experienced, a financial crisis (1997), an economic downturn (2008) or a pandemic (2020) could easily turn what was deemed a healthy project into one that is suffering from financial difficulties. 

How many Plaza Rakyats do we need? How many Grand Duta Hyatts? Despite the Housing and Local Government Ministry’s (KPKT) efforts to revive sick and abandoned, its Deputy Minister Datuk Aiman Athirah Sabu said they had recorded 117 abandoned projects with a total of 30,840 houses as of Jan 31 2024, with 81 projects involving units priced RM300,000 and below.

Moreover, those sick and abandoned properties are by no means fully rescued until the keys have been successfully handed over to the owners. For now, they are merely resuscitated and the potential to fall sick again remains. As seen with Plaza Rakyat, there were multiple attempts to resuscitate the project in 2005, 2007, 2012, 2015 and 2019. They all failed and the public is still waiting.

The new proposed Act remains a hot topic as the percentage that allows projects to be redeveloped has yet to be set in stone. For now, Zamirzan said the percentage might be set at 80% for buildings less than 30 years old, 75% for older buildings and 51% for buildings deemed as unsafe or abandoned.

Zamirzan said the Act, which is set to be tabled in Parliament, was aimed at regenerating old and abandoned buildings. But there is also no fixed period by which buildings would be considered old, whether they are 10 years, 20 years, 30 years or more.

While it is true that buildings can become dilapidated, it is usually because of their lack of proper maintenance. Kuala Lumpur City Hall (DBKL) had identified 139 sites which were ripe for redevelopment within the city limits.

Chang said the proposed consent threshold would be disadvantageous to those who did not want to move. “HBA strongly opposes any setting of a consent threshold. Any redevelopment project must have 100% approval from the owners. Our stand is any rejuvenation or renewal plan must have the consent of all because every owner is important,” he said.

It is not impossible as with 1Razak Mansion as a case in point of a success story where the developer had managed to get a 100% consent from property owners. Built-in 1963, the 657-unit Razak Mansion – each measuring 504 sq ft – was redeveloped in 2017 with the same number of units, but each expanded to 800 sq ft plus 24 shophouses, 110 market lots and a surau.

Chang said the property owners’ right to refuse should not be taken away by enacting a redevelopment law in favour of developers.

“We should never copy countries like Singapore or Hong Kong which have set a 90% consent threshold for redevelopment projects, as these countries have limited land resources. We can anticipate scenarios where 100% owners’ approval is no longer needed,” he added.

Chang also queried if KPKT was willing to underwrite projects where original owners were promised units in exchange for their properties. That would ensure that the redevelopment project will be guaranteed but would the government be willing? 

And what will be the fate of the competent developer who is carrying out the redevelopment and fails? Until now, no hefty penalty has fallen on those responsible even though the parent company remains profitable. This would be a different story in nations like China where directors of prominent property companies have been sentenced to jail for failing their duties.

There is a final point made by Jeffrey Phang, 68, who is a member of a non-governmental (NGO) that empowers grassroot leaders. He said that instead of introducing the concept of urban renewal, KPKT should come up with better coordination strategies and programmes to ensure that joint management bodies and management corporations of strata properties are able to function more effectively in preserving the conditions of existing buildings. This way, buildings will last longer and not need to undergo redevelopment quite so soon.