AS contentious debates swirl around the government’s proposed Urban Renewal Act (URA), public endorsement of an owner-led urban renewal model came somewhat unexpectedly from two key establishment players — The REHDA Institute, think tank of the real estate development industry, and KL City Hall (DBKL).

The KL Residents Action for Sustainable Development Association (KLRA+SD) would unabashedly assert that this concept of owners driving urban renewal wherever practicable was already its advocacy platform, well before the URA’s draft bill was revealed publicly.

KLRA+SD engaged the government on this platform in a number of ways, including querying, unsuccessfully to date, the mayor and federal territories minister on the specific URA framework that will apply to KL. This, together with KLRA+SD’s broader-ranging written feedback to PlanMalaysia, and a more recent memorandum to all 222 members of Parliament (MPs), consistently referenced owners’ natural right to self-determination.

This owner-led concept is in fact a product of progressive law-making, as evidenced by the Hansard records of the Federal Territory Planning Act,1982 (FTPA)’s passage through Parliament in the latter sessions of 1981. Its “action area” provision, which gives property owners in KL the first right of refusal to redevelop, is not a feature of the Town and Country Planning Act,1976 (TCPA), which is the planning law for the rest of Peninsular Malaysia.

News headlines such as “URA to empower owners to take lead in redevelopment” are therefore unhelpful and in fact misleading. The draft bill itself lent no support to an owner-led model, and its only clause pertaining to this appeared obstructive or restrictive.

While the high profile acknowledgement of owner-initiated redevelopment is welcome, the risk lies in the oversimplified narratives put forth to date. The realities and intricacies of an owner-led pathway are complex, and working structures in the property and building industries currently do not support it.

The URA’s draft bill lacks the key elements for enabling such an ecosystem to evolve, namely that it has no provisions for forming owners’ working committee. Meanwhile, it requires 100% owners’ agreement for a self-redevelopment initiative, making it tougher to achieve than for the developers. There is also lack of openness and inclusivity in the request for proposal process, and in executive committee representation

Simple amendments done on the fly during a parliamentary session will not be able to overcome the structural inadequacies.

Therefore, the July parliamentary session should be about MPs voicing out where it falls short, and debating on the structural changes needed, not limited to the owner initiation aspect, to make the bill truly fit for its first reading in a future session.

Even with the best public education and awareness-building, we could realistically expect owners’ first right of refusal to remain unexercised in many instances. Nevertheless, by keeping the way open to various modalities or degrees of owner participation, a sustainability-centric URA could, for example, aid owners in determining their future living environment with appropriate expert advice.

Regardless of owners’ ability or appetite to participate, it would still be our government’s responsibility to put in place the necessary regulatory and institutional safeguards for the near-term, as a bridge to a “more enlightened future”.

Passing new acts is not about quick fixes, but about building foundations for long-term social progress.

KLRA+SD’s letters/memorandums called for all-stakeholder consultation and in particular for professional bodies, such as fair-minded valuers, lawyers, property managers or consultants, town planners, land or building surveyors, and architects to participate in creating an equitable urban renewal ecosystem.

The entrenched status quo must change or be changed in order to fairly represent owners’ interests in urban renewal.

A public-spirited eminent person in the property sector helped us in drawing up a basic process flow that encapsulates how an equitable redevelopment process should look like (see flowchart).

It steers clear of any delusions that an owner-led model could be made to work all the time, while recognising the potential benefits in owners taking charge, should they exercise that right to whatever degree they are capable.

Any earnest effort to codify owner-led redevelopment into legal or regulatory frameworks should first embrace a basic process tested through public opinion. The rakyat (citizens) should not have been expected to give feedback based on the mind-boggling legal language of a draft bill.

With REHDA now apparently aligned with a major segment of KL civil society on this key aspect of urban renewal, the path should now be clear for the housing and local government ministry and DBKL to work towards a more legitimate all-stakeholder consultation format.

The URA Bill should never have made it so far in parliamentary process without this happening. Nevertheless, it is not too late to make an essential course correction.

Finally, we come to the consent threshold, the subject that sparked off lively debates from the get-go of the URA saga, obscuring many other important considerations. These include owners’ rights within a fair redevelopment ecosystem, environmental and social sustainability within the town planning framework, and fair or equitable compensation for both consenters and non-consenters alike.

Simplistic number-to-number “benchmarking” (particularly with Singapore’s) have been grossly misleading. Their 80% (or 90%) threshold enables T20 high-end property owners to “cash out” very profitably at the “expense” of the dissenting minority, who eventually receive exactly the same sales proceeds anyway. Theirs is about T20 wealth portfolios, not working class struggles.

If there is anything to learn about from our southern neighbour (Singapore), it is not about percentages but about their common class of public housing, subject to near-absolute state discretion in determining its redevelopment. With great power comes the great responsibility of taking care of citizens’ cradle-to-grave housing needs.

Our country is not in that place, neither are we on any trajectory towards it, with statutory bodies such as the Urban Development Authority having been dissolved way back in 1996.

But the power-responsibility paradigm still applies. A government’s moral duty cannot be outsourced to developers.

Irrespective of whether true owner-led redevelopments eventuate, KLRA+SD advocates for our government to “micro-manage” to the stage where a chosen developer can only build what has been agreed through the consensual process, with owner participation to the maximum degree possible.

Overarching that is the urban planning discipline which DBKL must embrace, in order to support a sustainable, rights-based urban renewal agenda. Of particular concern is the “redevelopment plot ratio incentive” given to developers. Such incentives should be earned, such as quantified contributions to socio-economic, demographic or sustainability targets cascaded down from city to zone, to township levels.

And for that matter, must incentive always be in the form of plot ratio enhancement?

Sadly, there has been little to no evidence of such thought processes in the recently gazetted KL Local Plan 2040.

The devil is in the details, but at this juncture, it is moral principles that matter most. The rakyat have every right to expect our government’s approach to urban renewal legislation to strike an appropriate balance between the rights of businesses and ordinary citizens.

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