Better Ways To Do Urban Renewal

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Pushing poor people out of the city to faraway suburbs is one main concern against the proposed Urban Renewal Act (URA).
In my previous article, I mentioned one solution – urban renewal developers should provide affordable housing in the same area as required for any new housing project.
Let's examine other aspects of the complex URA issue. Firstly, can the promise of cheaper flats be trusted?
The National House Buyers Association (HBA) has pointed out that the authorities in the past had failed to fix many problems, especially the abandonment of housing projects.
In short, confidence in the system to enforce the rules is not sterling.
Can system be trusted?
But to be fair, Housing and Local Government Minister Nga Kor Ming seems to be much better than his predecessors.
In February, he announced that his ministry had revived 862 projects of 102,808 housing units worth almost RM86 billion in two years. Well done.
But what will happen if the Madani government falls and some bumbling chap takes over? This is why the URA must be both idiot-proof and abuse-proof for future political changes.
HBA honorary secretary-general Chang Kim Loong said that developers’ promises of new units under the URA mean nothing if the project is abandoned or the developer goes bust.
Owners’ old homes “would have been demolished in exchange for a pie in the sky”, he quipped. All that would be left are lengthy and costly court cases.
Here's one way to fix this. For residents waiting for their replacement flats, the URA should mandate that developers deposit money upfront in a solid trust.
If the project is abandoned, at least they have that money to fall back on.
It will raise costs, but it will ensure that only reputable developers with deep pockets can undertake renewal projects, making the process safer.
With all the hassles of uprooting homes, obviously compensation - whether in cash or new units - should also be extra generous to secure the needed consent of 80 percent of owners for houses below 30 years.
Owners leading renewal
A better alternative to the URA is for homeowners themselves, not developers, to lead the renewal.
After all, the land belongs to the owners. Shouldn't they share in the profits of redevelopment?
Chang said owners can hire professionals to do viability studies. They can seek out developers, contractors or investors to explore joint ventures. They can call for open tenders and choose the best designs and deals.
In Singapore, urban renewal is led by 80 percent of owners who agree to en bloc sales to developers of their choice, as Olive Properly Consultants CEO Samuel Tan told The Star.
CBRE | WTW adviser Foo Gee Jen added that in Singapore and Hong Kong, owners initiate en bloc sales, not investors or developers.
But sadly, as researcher Peter Leong pointed out to me, Section 3 (5) of the draft URA requires 100 percent consent from owners doing self redevelopment. In contrast, developer-led renewal needs only 80 percent consent.
Why discriminate against owners trying to help themselves? It's practically impossible to get everyone to agree when some could be overseas, deceased, uncontactable, or in legal disputes. This is precisely why the ministry wants to lower URA consent to 80 percent.
So we have to ask - is there a bias towards developers? Do some of them have cosy links to politicians?
It's no secret that some developers were close to certain leaders previously.
For example, in December 2020 the High Court convicted Umno's Tengku Adnan Mansor of accepting a RM2 million bribe from the director of property development firm Aset Kayamas Sdn Bhd.
But the Court of Appeal later quashed his conviction and decided that the RM2 million was a “political donation” for Umno.
We hope and pray that such shenanigans no longer happen in the “morally pure” Madani era.
But the reality is, as long as Prime Minister Anwar Ibrahim's government keeps dragging its feet over enacting political funding laws, the door remains wide open for tycoons to give “donations” legally to those in power.
Refurbish not demolish?
Rather than demolish, why not refurbish old rundown flats?
"Redevelopment” (destroy and rebuild) is just one option in the URA. The draft law also mentions “regeneration” (repairs or upgrades) and “revitalisation” (beautification).
But who will pay for this? Developers’ biggest profits will come from tearing down, not renovating old flats. So it's really up to the government to step up.
In Singapore, the authorities have spent S$4 billion (RM13.3 billion) since 2007 for repairs and upgrades to 381,000 Housing Development Board flats.
Another 123,000 units are in line for improvements. What really impresses me is that Singaporeans can request senior-friendly fittings like handrails at steps and slip-resistant bathroom floors, for which the government will pay 95 percent of the costs.
Malaysian low-cost flats that are still in decent shape and structurally sound can benefit from similar government-funded renovations.
Years ago, I invested in a modest walk-up flat near downtown Kuala Lumpur which benefited from a facelift by the 1Malaysia Maintenance Fund during the BN era.
Under Madani, Nga announced that his ministry has repaired 4,814 urban homes and built 245 new ones, with an allocation of RM104 million.
So folk, it can be done. It's all a matter of political will.
For proof, just see how Ahmad Zahid Hamidi’s Rural Development Ministry got a whopping RM920 million to repair 23,458 homes and build 5,953 new ones last year.
Obviously, the votes of kampung folk are far more valuable, as they received nine times more money than urbanites to refurbish their homes.
One more thing – don't forget that improved hardware is just part of the solution of renovating old flats. Maintenance must also be improved.
Think City studied 18 public low cost flats and found that a poor sense of community led to rubbish, vandalism and crime.
It then launched pilot projects such as Kita untuk Kita to empower residents to take responsibility to clean up and beautify their own flats, rather than just waiting for bantuan (assistance) from “above”. This can be upscaled.
There are other issues of urban renewal that have to be addressed in a third article. For now, suffice to say, the URA does seem to have good intentions to rejuvenate rundown parts of our cities.
But more safeguards are needed to ensure that it's not too tilted towards just developers' profits, and that's why the URA needs some changes to better protect homeowners. - Mkini
ANDREW SIA is a veteran journalist who likes teh tarik khau kurang manis. You are welcome to give him ideas to brew at [email protected].
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.

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