PETALING JAYA: Property experts and consultants believe that the Urban Renewal Act (URA), set to be tabled in Parliament in July, has the potential to attract investment opportunities and improve living conditions.
Zerin Properties chief executive officer Previn Singhe noted that regional peers such as Singapore, Hong Kong, South Korea and Australia have successfully implemented urban renewal policies to ensure their cities remain globally competitive.
“Malaysia must follow suit to remain attractive for investment and talent attraction.
“Without renewal efforts, the capital risks being perceived as ageing and less dynamic, compared to regional counterparts that have successfully rejuvenated their city cores,” he told StarBiz.
Previn noted that many strata-titled buildings in Kuala Lumpur, particularly those built in the 1970s and 1980s, face physical and functional obsolescence, rising maintenance costs, safety concerns and declining property values.
“Current laws, such as the unanimous consent requirement under Section 57 of the Strata Titles Act 1985, have been instrumental in protecting individual property owners’ rights.
“However, in cases where buildings have deteriorated significantly and a clear majority of owners recognise the need for renewal, the existing framework can make redevelopment challenging.”
As a result, Previn said ageing structures often remain in place despite mounting safety concerns and declining economic value.
“This ultimately benefits no one and contributes to urban stagnation,” he said.
Previn noted that the urban core of Kuala Lumpur is losing investment interest as developers pivot towards newer, master-planned areas such as TRX, Merdeka 118 and Bandar Malaysia.
“If left unchecked, this could create a vicious cycle of neglect and economic downturn, similar to what cities like Detroit in the United States experienced before intervention efforts were made.
“Older districts in Kuala Lumpur, despite their prime locations, are losing attractiveness with unused or underutilised buildings contributing to inefficiencies that hinder economic growth and community development.”
Olive Property Consultants chief executive officer Samuel Tan concurred, explaining that there are many old and dilapidated commercial and residential developments in major city centres within the country.
“The URA can help to optimise the land use in terms of urban renewal by redeveloping abandoned or obsolete developments.
“Additionally, the Act will also allow development intensification by optimising the allowable higher plot ratio or density of an under-utilised development.”
Staying productive
Tan explained that new developments can then take place and be put into more productive use, such as housing more people or developing more commercial space, should there be demand for it.
“It will also allow existing owners the chance to cash out at (usually) a higher exit price, if the allowable development intensity (such as the plot ratio or density) is higher than the existing ones.
“Many existing owners could be stuck with the old, dilapidated or abandoned properties and could not sell them en bloc due to the absence of unanimous owner consent.”
Currently, under Section 57 of the Strata Titles Act 1985, a strata development can only be sold en bloc or as a whole if there is 100% agreement from the owners.
The URA, when it comes into effect, will reduce the resident-consent threshold for en bloc sales to below 100%, depending on the age and condition of the building.
Under the proposed Bill, buildings under 30 years old could be sold with 80% consent from the owners; while those older than 30 years would require 75% consent.
For buildings that are deemed unsafe or abandoned, a simple majority (51%) would be needed to approve the sale.
The consent threshold is on par with regional peers such as Singapore, which has an 80% threshold for buildings over 10 years old.
According to the Housing and Local Government Ministry, up to 139 parcels of land in Kuala Lumpur have been identified for redevelopment, with 91 of them being residential properties.
These projects are expected to generate an estimated gross development value of more than RM300bil.
According to the draft bill, the URA aims to enhance the efficiency of urban planning, particularly in addressing the risk of urban dilapidation and deterioration, as well as maintaining a balanced urban environment.
A huge contention over the passing of the URA is that potential residents might not be aware of what they are getting into; and risk losing their homes without consent.
Due to limited public awareness of their rights as property owners and the legal processes involved in redevelopment, National House Buyers Association honorary secretary-general Datuk Chang Kim Loong noted that many homeowners are easily swayed by agents using various tactics to obtain consent.
“Amid rushed and high-pressure circumstances, it is difficult for residents to assess whether they are making informed decisions objectively.
“Homeowners approached for redevelopment proposals are often enticed with promises of larger condominium units, maintenance fee-free periods, additional parking bays and other perks,” he said in a commentary piece, published by StarBiz 7, last month.
In light of this, Previn feels that the URA must be carefully structured to balance progress with safeguards, ensuring that urban renewal does not come at the expense of proper checks and balances, property owner rights or fair compensation.
“The URA should prioritise transparency, meaningful stakeholder engagement and a well-defined regulatory framework that prevents forced displacement, while fostering equitable and inclusive development.”
Strategic and future-proof
Beyond simply modernising ageing structures, Previn said urban rejuvenation must be strategic and future-proof, integrating sustainable design, smart infrastructure and adaptive reuse to enhance long-term liveability and economic resilience.
“Heritage conservation, infrastructure capacity and social cohesion must be thoughtfully considered, ensuring that renewal strengthens and not erases the character and identity of the nation.
“If executed with foresight, the URA has the potential to be a transformative policy that reshapes Malaysia’s urban landscape, revitalising declining districts into dynamic, sustainable hubs that attract investment, talent and innovation, similar to the successful renewal efforts seen in global cities like Singapore, Seoul (South Korea) and Melbourne (Australia).”
Tan said the key to the URA’s success and equity is the implementation.
“Some essential questions to address include who is qualified to determine if the building is obsolete or under-developed? Who are the parties that will determine the replacement units and the market value?
“Can these be challenged in courts, should there be a dispute? Is justice exercised if a large portion of the proprietors are not traceable, or are not in the position to make an independent and prudent decision?”
Previn also warned that if renewal efforts are primarily guided by financial feasibility, there is a risk that broader urban planning objectives such as environmental sustainability, public spaces, and community well-being may be overlooked.
“Renewal should not just maximise returns, but also enhance liveability, inclusivity and long-term urban resilience.”
Moreover, he explained that large-scale urban renewal projects require significant investment and come with risks such as cost overruns, delays, or economic downturns.
“Poorly managed projects could lead to stalled developments, financial losses, or incomplete infrastructure, placing a burden on both investors and affected communities.”