Spearheaded by the housing and local government ministry, the proposed legislation has been touted by its minister, Nga Kor Ming, as necessary to replace outdated laws and regulations governing the redevelopment of dilapidated urban areas.
DAP MP Lim Lip Eng says the law, when passed, will allow for the restoration of old and unsafe residential homes while addressing the needs of urban buildings with structural problems, electrical supply issues and insufficient modern facilities.
However, opponents argue it will displace poorer citizens who may be unable to continue living in the area after it is redeveloped.
Recently, PAS information chief Ahmad Fadhli Shaari argued it would allow the government and developers to take land and homes away from the people even without their consent.
FMT takes a look at the proposal’s origins, major points of interest and criticism of the Act by its detractors.
The history of ‘urban regeneration’
In 2015, the Penang government established an “urban regeneration committee” to look into regenerating decades-old public housing schemes in Penang at Rifle Range, Taman Free School, Taman Tun Sardon and Mak Mandin.
Chaired by Jagdeep Singh Deo, then the state’s executive councillor for housing, local government and town and country planning, the committee sought to replace old, low-rise blocks of flats that had become costly to maintain with new, taller and better-equipped flats.
However, legalities posed a major obstacle to this effort.
By 2019, Penang had earmarked 5,469 units of flats in five stratified projects. Jagdeep said they could not be redeveloped due to the absence of laws that enable the process and a lack of clarity as to whether the government needed to obtain the unanimous agreement of residents.
In 2020, then federal housing and local government minister Zuraida Kamaruddin said her ministry would introduce a nationwide public housing redevelopment policy that would allow for the demolition of public housing 30 years or older to make way for new homes.
A year later, the Penang government proposed a federal law — then known as the Urban Regeneration Act — to Reezal Merican Naina Merican, who had succeeded Zuraida as minister.
Under Reezal’s supervision, the government began working on legislation to enable urban renewal, which included proposed amendments to the Strata Title Act 1985 and related land ownership laws.
Nga aims to table the current version of the law in either June or July 2025.
What will the Urban Renewal Act entail?
According to a draft of the bill, urban renewal may be carried out in any area identified under the development plan as a city or city centre with a population of over 10,000, or a district administration centre with a population of less than 10,000.
It covers three types of urban renewal: redevelopment, regeneration and revitalisation.
Redevelopment involves changes to the physical condition of the existing sites, including demolition, clearing of sites, erecting buildings and upgrading infrastructure and utility facilities.
Regeneration involves repairs or upgrades to neglected, dilapidated or abandoned buildings, while revitalisation involves improvements by way of upgrading, beautification or landscaping in general.
The Act will see the establishment of a federal executive committee chaired by a minister, its members including exco members from every state responsible for town and country planning, as well as the federal lands and mines director-general and the state directors of lands and mines.
The main bone of contention
The most contentious issue in the draft bill is likely the one related to the lower “consent threshold” required for redevelopment.
The Strata Titles Act 1985 presently requires a unanimous resolution of owners before strata titles issued in respect of a subdivided building can be terminated.
The URA seeks to lower the threshold of strata owners’ consent to 80% for properties under 30 years old, 75% for those over 30 years old and 51% for abandoned buildings.
“This means a property could be compulsorily redeveloped even if 20% of the owners oppose it,” argues National House Buyers Association secretary-general Chang Kim Loong.
A strong opponent of the Act, Chang says this creates a situation where a minority of owners may be forced to give up their property rights for redevelopment against their will.
“Since property rights are protected under Article 13 of the Federal Constitution, the URA could be seen as undermining this right by allowing redevelopment without full consent, essentially forcing minority owners to comply with the majority’s decision,” he said.
Article 13, which pertains to rights to property, says “no person shall be deprived of property except in accordance with the law”, and “no law shall provide for the compulsory acquisition or use of property without adequate compensation”.
Chang said the concept of “adequate compensation” in Malaysian law is subjective and can often be contentious.
“Property owners forced to sell under the URA might argue that the compensation provided does not fully reflect the property’s market value or its emotional and personal significance.
“Compelling a minority property owner to sell his property at a price he does not agree with or lower than fair market value is against the spirit of Article 13 of the Federal Constitution,” he said.
The government’s defence of the Act
The Act’s proponents, such as DAP’s Lim and Bukit Bendera MP Syerleena Abdul Rashid, firmly believe the law will benefit Malaysians living in deteriorating public housing.
Lim has said under the Act, the original homeowners would be given new homes for free or at a discounted rate, regardless of their race.
Syerleena also argues that the URA will “improve the quality of life for thousands of Malaysians who currently live in deteriorating housing, while making sure that urban progress is not reserved for the elite, and that every Malaysian has the right to live in a safe, modern home”.
Prime Minister Anwar Ibrahim says the Act will not force property owners to give up their homes or alter the ethnic composition of residential areas, contrary to the allegation by PAS deputy president Tuan Ibrahim Tuan Man that it is aimed at pushing poor Malays and Indians out of urban areas.
Speaking during Minister’s Question Time in the Dewan Rakyat yesterday, he assured MPs that the bill would only facilitate urban redevelopment without affecting ownership rights.
“There will be no provision under the proposed act that could lead to owners, regardless of ethnicity, losing ownership of their property,” said Anwar.
Giving the example of the Seri Perlis housing area in Bandar Tun Razak, Kuala Lumpur, he said its demographic make-up would remain unchanged.
“If it is now 70% Malay, it will remain so because the owners will have full rights,” he said. - FMT
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