The Urban Renewal Act, otherwise known as the URA, is a proposed law in Malaysia that aims to redevelop old, run-down buildings and neighbourhoods.

Urban renewal is a concept that has existed for hundreds of years, beginning in 19th-century England, although this specific term wasn’t used then.

Malaysia started exploring it in 2015, and in 2020, the government announced a policy to redevelop all public housing over 30 years old.

Why is it being proposed?

There are basically three main reasons why the government is proposing the URA, all of which is aimed at improving safety and to breathe new life into the city.

Improve safety and basics: Many older flats and apartments suffer from structural issues, bad wiring, or general neglect. Local councils often lack the fund or legal authority to fix them.
Enable redevelopment: Currently, development can stall if just one owner refuses to sell. The URA seeks to loosen this roadblock and jumpstart necessary urban renewal.
Boost housing and public facilities: The law aims to deliver better housing, improved infrastructure, and public amenities — making living conditions more comfortable and livable.

While all this sounds good and for the benefit of the people, a few concerns regarding ownership rights, amongst many other worrying issues, were raised should the URA come into effect.

The proposed urban renewal law allows the government to redevelop areas without full consent of owners

Image for illustration purpose. Source: Facebook | Pekeliling Flats

When the URA was announced, not everyone was on board with it. The provisions raised concerns about the potential for minority property owners to be compelled to sell their properties even if they disagree with the redevelopment plan.

Certain parties argued that it could result in forced evictions, unfair land acquisitions, and the displacement of poorer citizens who are unable to afford their homes once the area is redeveloped.

Under current laws outlined in Section 57 of the Strata Titles Act 1985, a strata development can only be sold if 100 percent of unit owners agree.

The proposed URA aims to lower this threshold based on the building’s age and condition. If the Bill is passed in Parliament, it is intended to overcome that gridlock.

Here is what the consent thresholds look like:

80% consent if the building is under 30 years old.
75% consent if the building is over 30 years old.
51% consent if the building is damaged or abandoned.

In simple terms, if there is a building over 30 years old, the government would only need 75% of its owners to agree to the URA to begin redeveloping it, regardless of what the remainder of the owners say.

A “one-for-one” replacement is promised, but what about raised property taxes after redevelopment?

However, in a recent article by The Star, Town and Country Planning Department (PLANMalaysia) Director General Datuk Dr Alias Rameli said there will be a “one-for-one” replacement as compensations for acquisitions made under the URA.

“One house will be replaced by another house. If the price was RM70,000 previously, after urban redevelopment it will be valued at RM400,000. There will be no payment required and it is free of charge for residents in agreement,” he said at a press conference in Parliament on 26 August.

Image for illustration purpose. Source: Flickr | magnus azami

But that only covers the cost of the property itself. What about taxes and upkeep in the future?

Well, according to a Malay Mail report, Professor Jamalunlaili Abdullah, dean at Universiti Teknologi MARA’s Faculty of Architecture, Planning and Surveying asked “Yes, people may get larger, better homes. But can they afford the property taxes and upkeep later?”.

“The property tax will increase as this tax is based on the value of the properties in an area. When redevelopment is done, the value of properties in the area will go up,” he added.

Jamalunlaili said the Bill is positive, but it still needed to include some safeguards for property owners, especially those who belong in the low-income tier.

“People need this assurance that they will still be able to afford living in their houses after it has gone through redevelopment and this assurance should be long term — for the next 10 to 20 years,” he said.

The URA has its pros and cons, provided that it is not abused

Image for illustration purpose. Source: Wikimedia Commons | Brownc

On one hand, the redevelopment law that is being proposed should improve the quality of life of those who are living in decades-old buildings.

On the other hand, many are worried that the Act could be abused by developer-driven “land grabs”; unfair valuation and compensation; and gentrification and social displacement.

While the intent of the URA is good, the potential loophole here is that the balance of power tilts heavily towards developers and the majority, leaving minorities and vulnerable residents at risk of forced displacement, unfair compensation, and loss of community identity.

Until the URA comes into effect, the benefits or drawbacks remains to be seen.