This article first appeared in The Edge Malaysia Weekly on September 22, 2025 - September 28, 2025
URBAN renewal, also known as urban regeneration, is not a novel concept. Across the globe, major cities such as London, Beijing, Melbourne, New York and Singapore have undergone various phases of transformation. In many cases, old or abandoned buildings are demolished to make way for towering skyscrapers, while others are revitalised or repurposed to suit contemporary needs. These initiatives are generally undertaken with positive intentions — redeveloping structures that are outdated, neglected or in disrepair, while simultaneously upgrading the surrounding infrastructure. Regeneration is also important to generate economic activity while creating employment opportunities for residents and those from outside the area.
However, such sweeping changes are rarely implemented without encountering criticism or resistance, and this is to be expected.
In Malaysia, the Strata Titles Act 1985 posed a significant hurdle for redevelopment efforts by requiring unanimous consent — 100% agreement — from all property owners. This stipulation proved to be nearly impossible to fulfil, as even a single untraceable owner or a couple of dissenting voices could stall the entire process indefinitely. Such obstacles often resulted in prolonged delays. A frequently cited example is Kuala Lumpur’s Desa Kudalari, the country’s first high-rise condominium, built in 1984 and located just steps away from the iconic Petronas Twin Towers. In 2016, a redevelopment proposal for Desa Kudalari garnered support from only 87% of the owners, falling short of the required threshold and thus preventing the project from moving forward.
Conversely, there have been successful cases of housing renewal in Malaysia. Housing and Local Government Minister Nga Kor Ming has highlighted projects such as Razak Mansion and Kampung Kerinchi, both situated in Kuala Lumpur.
Residents of Razak Mansion were offered a one-for-one replacement unit in the newly developed 1Razak Mansion. According to Nga, the original 400 sq ft homes were upgraded to 800 sq ft units, with property values soaring from RM70,000 to RM450,000.
This brings us to the introduction of the Urban Renewal Act (URA). The government tabled the Urban Renewal Bill 2025 (URA Bill) for its first reading in the Dewan Rakyat on Aug 21, 2025. However, the bill has faced pushback from various stakeholders who have raised concerns regarding transparency and the proposed consent threshold (see Table 1). As a result, the second reading has been deferred to the Parliamentary session in October.
In a recent press briefing, Nga elaborated that the bill encompasses three core components of development: revitalisation, regeneration and redevelopment (see Table 2). He emphasised that the proposed 80% consent threshold is among the highest globally, noting that redevelopment projects in Tokyo require only 60% agreement, while Shanghai mandates a two-thirds majority. He added that once the 80% consent threshold has been achieved, then only negotiations will begin.
Samuel Tan, founder and CEO of Olive Tree Property Consultants, highlights growing concerns surrounding the proposed URA, particularly the 80% consent threshold for redevelopment. Critics argue that this figure risks undermining minority rights, potentially compelling property owners to sell against their will.
“Many NGOs are calling for stronger safeguards, suggesting a higher threshold of 85% to 95% to prevent coercion,” Tan explains. He points to historical precedents such as Razak Mansion, which was redeveloped under the Land Acquisition Act 1960. That legislation allowed for compulsory acquisition but also provided avenues for judicial appeal in cases of compensation disputes.
Tan notes that while the URA Bill promises “one-for-one” replacement units or better, along with compensation that exceeds market value, it lacks formal guarantees for market-rate compensation and does not outline a transparent valuation process. He also raises concerns about gentrification, warning that the redevelopment of low-cost flats into high-rise buildings could result in a tripling of maintenance fees, effectively displacing B40 communities. Additionally, he cautions that such projects may lead to cultural disruption, potentially altering the ethnic makeup of Malay reserve land and heritage areas.
In a joint statement to The Edge, several professional bodies — the Royal Institution of Surveyors Malaysia (RISM), Malaysian Institute of Property and Facility Managers (MIPFM), Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS), Institute of Malaysian Property Agents and Consultants (IMPAC), and Persatuan Perunding Hartanah Muslim Malaysia (PEHAM) — emphasised the importance of ensuring that the URB is fair, equitable and protective of property rights, while also promoting sustainable and inclusive urban renewal. These organisations outlined several key concerns regarding the proposed legislation (see Table 3), including excessive ministerial authority with limited checks and balances, a developer-led process prone to conflicts of interest, and insufficient professional and technical oversight.
Tan also critiques the URA Bill’s “30-year benchmark” for building eligibility, suggesting it could incentivise premature demolition. “This undermines a culture of proper maintenance and places financial strain on homeowners. Those with long-term mortgages may be forced to sell before their loans are fully repaid,” he warns. Historically, buildings were maintained for 50 to 60 years or more, with refurbishment preferred over demolition.
To make the URA Bill work, Tan supports the joint recommendation from RISM, MIPFM, PEPS, IMPAC and PEHAM calling for independent verification of owner consent to prevent coercion by developers. The group proposes several amendments to the bill,
including shifting compulsory acquisition and compensation responsibilities to the state. They recommend removing clauses that allow developers to initiate acquisitions and instead require state authorities to act only after verifying public interest and owner consent. A competitive tender process should be implemented to ensure the selection of developers offering the highest and best proposals — not merely the lowest cost.
The group also stresses the need for robust governance, transparency and public engagement. Their recommendations include mandatory public consultations, comprehensive impact assessments, the establishment of a professional oversight committee, and the creation of an urban renewal tribunal. They advocate for guarantees that original owners and tenants will have the option to return to redeveloped properties at affordable prices. Additionally, they propose piloting the URA Bill in selected areas for three years, followed by an independent review and a five-year sunset clause requiring re-approval.
Tan underscores the importance of preserving Malay Reserve land and heritage sites to protect cultural identity. “Compulsory acquisition should be reserved strictly for genuine public purposes,” he asserts.
Improving the bill demands a balanced approach that prioritises social equity, transparency and inclusivity. By revising consent thresholds, ensuring fair compensation, safeguarding vulnerable communities and drawing lessons from international models, Malaysia can establish an urban renewal framework that benefits all stakeholders. As the bill approaches its second reading, Tan concludes that meaningful stakeholder engagement and thoughtful amendments are essential to avoid repeating past mistakes and to build cities that are not only modern but also just and resilient.
Yes, concerns around displacement, consent and transparency must be addressed — and they deserve serious attention. But if those concerns become a reason to stall the Urban Renewal Bill entirely, we risk allowing urban decay to deepen unchecked. Inaction is not neutrality; it’s a decision to let our cities deteriorate while waiting for a perfect solution that may never come.
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