Urban renewal models should include owner-led pathways

Moving away from a developer-led approach in the Urban Renewal Act (URA) framework

Public participation is critical to ensure fair and equitable urban renewal outcomes. Since 2024, Kuala Lumpur Residents Action For Sustainable Development Association (KLRA+SD) has actively engaged both PLANMalaysia and DBKL on the need to build a framework for community involvement and an owner-initiated urban renewal pathway.

This is partly in response to growing concerns over redevelopment attempts by developers in Kuala Lumpur that saw inconsistent and questionable practices in garnering owners’ consent. The recent endorsement by the Rehda Institute of the owner-led approach provides validation from industry players of owners’ right to self-determination.

Malaysia’s main planning acts, namely the Town and Country Planning Act 1976 (TCPA) and the Federal Territory Planning Act 1982 (FTPA), already outline measures to incorporate public feedback. The URA, therefore, should not create an alternative process to sidestep these safeguards.

The draft Urban Renewal Bill issued in February 2025, however, alludes to a model with centralised decision-making by the government and developer-led implementation. Given the conflicts of interest, any renewal initiatives should not be led by developers.

Instead, we propose a dual-approach model comprising:

(1) a first right for homeowners to initiate their own renewal, failing which

(2) a government agency-led renewal process.

The developer’s role should be limited to building what has already been agreed.

 

Owners’ first right to redevelopment is embedded in the Federal Territory Planning Act

The owner-led renewal pathway is already outlined in the FTPA’s “action area” provision, providing property owners a first right to undertake a development subject to certain parameters. This existing right should be upheld in the URA.

Although such a right is not a feature of the TCPA, which applies to the rest of Peninsular Malaysia, the current URA debate presents an opportunity to make this right accessible to other states.

Implementing this pathway, however, requires a robust process framework given the stakeholders and risks involved. The current draft Bill itself offers no support and is rather restrictive, requiring 100% consent compared to just 75%-80% consent needed under its current developer-led approach.

To demonstrate its feasibility, KLRA+SD, in consultation with property experts, has outlined a general process flow that encapsulates how an owner-led urban renewal could work should owners decide to exercise that right.

Whilst an owner-led model looks ideal, there are implementation challenges. Homeowners lacking cohesion and management capabilities may not be able to exercise such a right. Many would still need to follow a government-assisted pathway. Therefore, the need for holistic standard operating procedures and safeguards in the URA and its subsidiary legislation remains.

Nevertheless, this pathway has potential and warrants further development by policymakers, with adequate civil society participation. In this regard, KLRA+SD looks forward to the opportunity to collaborate with think tanks and agencies, including the Rehda Institute, to refine this framework.

 

Social responsibility of the government cannot be delegated

Finally, misconceptions about the consent threshold need to be highlighted. Although the Housing and Local Government Ministry has benchmarked the proposed 75%-80% thresholds to justify them, simplistic number-to-number comparisons - particularly with Singapore - can be misleading.

In Singapore, consent thresholds apply within the context of en-bloc sales of private properties where homeowners run collective sale processes without government intervention. This is supported by a robust redevelopment ecosystem and equitable compensation for both consenters and non-consenters.

In contrast, Malaysia’s URA imposes the influence of authorities and developers on private properties, where homeowners are not in full control. Furthermore, the use of forced acquisition to “resolve” non-consenters could result in unequal compensation between consenters and non-consenters. Consent thresholds in the URA therefore carry a different meaning.

If there is anything to learn from Singapore, it is about the rigorous redevelopment planning and coordination done by the Housing & Development Board. Rather than outsourcing to developers, the Singaporean government takes responsibility for citizens’ public housing needs, thereby minimising issues such as abandoned projects, late deliveries, and poor quality that often plague our housing sector.

In Malaysia, statutory bodies such as the Urban Development Authority (UDA) were dissolved back in 1996. Perhaps such functions should be revived, as the social responsibility paradigm still applies, where a government’s moral duty cannot be delegated.

 

Concluding remarks

The draft URA Bill lacks the safeguards necessary to protect the interests of the people. Our concern is that simple amendments and tweaks will not overcome its structural inadequacies.

The coming Parliament session should be about MPs voicing where it falls short and what key changes are needed to make the Bill fit for its first reading. The Rakyat has every right to expect this of their representatives.

 

The above article is co-written by Han Jun Siew and Peter Leong, public policy advisors of KLRA+SD