THE Penang government is exploring ways to repopulate George Town which has seen its population shrinking over the years.
State Housing, Town, Country Planning and Local Government Committee chairman Jagdeep Singh Deo said new ways were necessary to bring people back, especially into the inner city, since it is unlikely that the repealed Rent Control Act would be reintroduced.
He said in an interview that the state held several meetings to brainstorm on the Rent Control Act and was finalising the report.
Jagdeep said the rental of pre-war buildings in the city were spiralling upwards.
“That is causing residents to leave the city, especially those staying in the core and buffer zones in the heritage enclave.”
He said rent control might not be a good strategy and that there were other ways to encourage lower rentals.
“We are exploring ways to allow owners to split the floors of their pre-war shop houses for different uses.
“We may allow the shop- houses’ staircase to be separated from the ground floor so that residents upstairs will have a separate entrance.
“The state will start with the seven pre-war units in Kimberley Street.
“We will lease the ground floor to heritage-type businesses while the upstairs is for residential use only,” he said.
“We are serious about bringing people back to live in the heritage enclave and we will not let old businesses go away.
“We are planning to rent the upper floors of a unit at RM800 per month for 500sq ft.
“The council will set this as a market benchmark.
“It is an open market but if your neighbour’s rental is RM800, how much higher can you rent out your unit for?”
Asked about foreigners who formed local companies with Malaysian proxies to buy heritage property, Jagdeep said the state could not stop this as the foreigners were using legal means.
“But do you think foreigners can afford to rent for RM10,000 a month? They have to adjust their expectations downwards and follow our market,” he added.
It was reported that many locals had moved out to new townships following an increase in the rental of pre-war houses in George Town due to the repeal of the Rent Control Act 1966 in 2000.
Under the Act, the owners of houses built before 1948 were not allowed to increase rents indiscriminately.
Jagdeep said that to date, there were 5,368 houses in the core zone of the George Town Special Area Plan that were under rent control.
In July 2016, the state was looking at re-introducing the repealed Rent Control Act 1966 to prevent the inflation of property rentals in the heritage site.
Before the Act was repealed in 1997 and enforcement of the repeal took effect in 2002, city dwellers and business owners paid only a pittance to house owners.
The Star also reported that Singaporean companies were snapping up pre-war properties in Penang, some raising rentals by 400% to 500% after sprucing up the old premises.
In May 2003, the then Chief Minister Tan Sri Dr Koh Tsu Koon had reportedly said the population of George Town had decreased from 270,000 people in 1970 to 180,000 people in 2000.
He had also noted that the population in residential areas surrounding George Town had tripled from 94,000 people in 1970 to nearly 290,000 people in 2000.
Among the factors causing this exodus, he said, were the repeal of the Rent Control Act.
Inner city exodus continues in Penang