An objective and effective execution of urban renewal projects requires a holistic approach.
Globally, urban decay, also known as urban decline or urban shrinkage, is a persistent challenge that governments must address by implementing urban renewal and sustainability strategies.
Urban decay is characterised by a deterioration of physical infrastructure, abandonment of buildings, and dilapidated living conditions or housing that is old, worn-out, and in a state of disrepair, ruin, or neglect, often due to age, lack of maintenance, or environmental damage.
Historical research on urban decay shows that this phenomenon is caused by a complex interplay of socio-economic factors.
Economic shifts that move jobs and residents to the suburbs or periphery of established cities can lead to physical deterioration of buildings and infrastructure, social changes such as increased crime rates and social problems, and policy decisions prioritising suburban development.
These interconnected factors have created cycles of decline and stagnating growth in affected areas, characterised by abandoned properties, falling property values, and reduced services that impact the quality of life for remaining residents.
The physical deterioration of infrastructure and housing, abandonment of buildings, and dilapidated apartments not only impact the physical landscape of a city or housing community but also creates an eyesore with visible signs of neglect that degrade a city’s or surrounding neighbourhoods’ appearance, contributing to social and economic effects, and also often leading to negative perceptions of the affected areas.
Urban renewal or urban regeneration is an opposite of urban decay; it is an urban planning strategy to revitalise deteriorating urban areas or even urban redevelopment by addressing problems like decaying housing, poor infrastructure, and a lack of community services.
Urban regeneration tends to focus on three core areas: economic revitalisation, social regeneration, and environmental sustainability.
Malaysia too is experiencing urban decay in areas with ageing strata properties and older neighbourhoods, driven by factors such as inadequate maintenance, particularly in older districts and areas with dilapidated buildings and a lack of sustainable redevelopment strategies.
This has resulted in structural deterioration and failures as well as safety risks such as fire hazards, health risks and environmental damage in many ageing buildings.
The Housing and Local Government Ministry has identified 534 potential areas for urban renewal in Peninsular Malaysia, including 139 sites in Kuala Lumpur, 85 in Perak, 72 in Selangor and 58 in Pahang.
These sites consist of ageing buildings and dilapidated public housing that pose safety risks, such as deteriorating wiring systems and fire hazards.
On Aug 21, the Urban Renewal (URA) Bill was tabled for the first reading in Parliament, marking legislative efforts to address urban redevelopment, rejuvenation, and revitalisation.
The Bill’s second reading was postponed to Oct 6, following the intensified resistance from various stakeholders, including residents’ groups, state governments, and political parties.
The government is prepared to refine and amend the proposed URA, including adjusting the contentious consent threshold for urban renewable projects.
Key issues and concerns raised are the consent threshold for redevelopment, undermining land ownership and property rights, potential forced evictions, unfair land acquisition, gentrification, and displacement of lower-income groups, and constitutional protections, the Bill’s broad powers as well as a lack of safeguards and transparency.
While legislation varies internationally, common issues across countries like Singapore, and Hong Kong include land acquisition and compensation, displacement of communities, the influence of developers versus residents’ interest, and preserving social and cultural heritage.
Both the government and stakeholders have to view the URA objectively, balancing current inhabitants’ genuine need to upgrade ageing or aged infrastructure and revitalise urban areas.
In this regard, the government must acknowledge and address public concerns about potential gentrification, a process where urban renewal and redevelopment lead to the displacement of existing, often lower-income residents and tenants because landlords may be motivated to sell or redevelop their properties for higher-value use.
This displaces the underprivileged in the urban areas. To address this fundamental concern, a one-for-one replacement for the redevelopment of public low-cost units for deserving households must be considered.
An objective and effective execution of urban renewal projects requires a holistic approach thorough strong stakeholder engagement, ensuring a fair, transparent and needs-based assessment of whether redevelopment is necessary.
Adequate safeguard provisions must be put in place to protect the current residents’ economic rights and social well-being, as well as ensure the financial and societal gains benefit the original communities, not just developers.
On the administration of urban renewal projects, the Bill proposes the setting up of state executive committees (SECs) at the state level and a federal executive committee (FEC) at the national level to propose and carry out urban renewal projects.
There remains ambiguity of discretionary power vested with the SECs based on wide discretion given under the Bill.
This may suggest that an SEC can proceed with an urban renewal project if the FEC declines to implement the project.
The proposal report prepared by the secretary of the SEC, which has been approved by the SEC shall be submitted to the FEC for its advice.
There are concerns that the URA grants excessive power to the minister due to provisions allowing the declaration of urban renewal areas without requiring prior consultation with landowners, leading to compulsory acquisition of property, and thereby circumventing the constitutional right to property, as well as the power to create regulations, raising concerns about potential abuse of power by the minister.
The members the FEC and SECs should include a diverse range of stakeholders to ensure fairness and broad representation, potentially to have professionals such as town planners, architects, lawyers and project managers, representatives from relevant civil society groups including homeowners’ associations, and sociologists or economists to assess community and economic impacts.
The consent threshold for an urban renewal project must balance between facilitating necessary redevelopment and protecting the rights of individual property owners.
Following recommendations from the Parliamentary Select Committee on Infrastructure, Transport and Communications, the government will standardise the consent threshold for all urban renewal projects at 80%, regardless of the age or conditions of the building, a change from varied consent thresholds of 80% for buildings under 30 years old, 75% for those over 30, and 51% for unsafe or abandoned buildings.
Some have asked for a 100% consent threshold, which is deemed as unrealistic and impractical, and hinders necessary urban rejuvenation.
It is nearly impossible to achieve unanimous agreement from every single property owner in an ageing building as some owners may be uncontactable, have legal issues, or be absent.
A 100% threshold would allow a minority to deny the majority to sell and monetise their outdated properties.
Some have advocated a tiered approach to consent thresholds.
There isn’t a universal cut-off age for buildings in urban renewal. The 100% requirement is seen as an overly high standard, and it is not aligned with international best practices for initiating urban renewal negotiations. Singapore currently has a 90% consent threshold for buildings under 10 years old and 80% for those over 10 years.
Hong Kong requires 90% consent for buildings under 50 years old, while Taiwan requires at least 90% of proprietors agree to the project.
New Zealand needs 75% consent for buildings over 30 years old while Western Australia calls for a uniform 80% consent for all building ages.
Urban renewal initiatives should also prioritise the preservation and reintegration of heritage buildings through adaptive reuse, restoration, and rehabilitation, rather than demolition, to maintain the historical and cultural fabric of a city.
Under Clause 19(3) of the Bill, approved developer shall consult landowners to achieve the consent threshold. Both federal and state authorities have no direct participation in securing the consent threshold. Given the developers’ inherent conflict of interest, it raises the risks coercion or unethical influencing of residents. A lack of transparency and informed consent can lead to residents being pressured into agreeing to redevelopments they don’t fully understand or have enough information about.
It is a challenging task to safeguard the interests of proprietors and occupiers in an urban renewal project. Very often, individual owners delay their disposal decisions as they do not understand the causal effect of the redevelopment potential on the value of their assets.
Developers are required to provide replacement housing that is no less favourable in size, value, or quality than the original property, with no additional cost to the owner.
A Federal Urban Renewal Mediation Committee and State Urban Renewal Mediation Committees will be formed for the purpose of protecting the interest of interested parties.
Some have raised concerns about fairness, independence and effectiveness, proposing a tribunal to handle disputes.
In essence, legal protection and procedural safeguards are crucial, including guaranteeing fair marke-value assessments and compensation, options for equitable replacement or resettlement for owners and tenants to ensure fairness.
It would be best to establish strong independent oversight in ensuring mandatory public participation and transparency in decision-making, and robust dispute resolution processes.
Transparency and open tendering are crucial for selecting qualified developers for urban renewal projects to ensure fairness, prevent exploitation, and guarantee projects are implemented under favourable terms.
These principles aim to foster a competitive environment, allowing all eligible developers with sound financial and performance records to compete, ultimately leading to better project outcomes and the avoidance of abandoned or poorly executed developments.
In conclusion, stakeholder objectivity and rationality are required to strike a balance between protecting the public interest in urban regeneration and private property rights, particularly regarding consent thresholds for redevelopment, avoiding displacement and gentrification.
Lee Heng Guie is the executive director of the Socio-Economic Research Centre. The views expressed here are the writer’s own.
