ARTIKEL 4
 
TOWARDS SUCCESSFUL HOUSING DEVELOPMENT IN MALAYSIA
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INTRODUCTION
Housing is a major concern for all people in every corner of the world as the wellbeing of a country is reflected in its people enjoying a certain standard of living. Among the indicators of wellbeing is housing which provides shelter as well as being a major potential for expanding the construction industry, generating jobs and contributing to capital formation. The construction industry including housing contributed about 3.4% of Gross Domestic Product of Malaysia for the year 2000.
In the present context, housing in Malaysia is developing in line with the goals of Habitat Agenda as well as the principles of Agenda 21 which is a blueprint for sustainable development in the 21st Century adopted by 179 nations including Malaysia in Rio de Janeiro in June 1992. Sustainable development is something which must improve the quality of life, improve the living and working environment of all people, provide adequate shelter for all, create sustainable energy, transport and construction activities and stimulate human resource development and capacity-building required to achieve these goals. Successful housing development in the context of Habitat Agenda and Agenda 21 therefore involves the provision of adequate shelter for all and housing development that improves the quality of life without destruction to the environment.
 
HOUSING POLICY
The housing policy of Malaysia is to provide Malaysians of all income levels, particularly the low-income groups, accessibility to adequate, affordable and quality shelter. It provides direction to housing development in the country which should emphasise human settlement philosophy through the provision of social services and amenities as well as economic activities necessary for the attainment of better quality of life, national integration and unity.
 
ACHIEVEMENTS IN HOUSING DEVELOPMENT
Table1 shows the targets and achievements of the various Malaysia's 5-year Plans. By and large, the performance of the public and private sectors in delivery of houses was below the estimated targets except for the 3rd, 6th and 7th Malaysia Plans where the private sector performed excellently, surpassing the targets set. During the 3rd Malaysia Plan period, there was rapid economic and social development, leading to a great expansion of private sector, but most of the houses constructed were medium and high costs.
After the rapid expansion experienced during the 3rd Plan period, the economy took a downturn where the performance of the private and public sector during the 4th and 5th Plans was poor. The public sector delivered 190,045 units of houses out of a target of 398,570 units while the private sector delivered 201,933 units out of a target of 524,730 units.
The shortfall in the construction of housing units by the public sector during the 4th Plan period was largely due to the cutback in allocation and administrative delays such as problems in identifying suitable project sites and preparation of tender documents. In the land schemes housing programme, the shortfall resulted from the postponement of land development projects.
Both demand and supply factors contributed to the shortfall in construction of housing units by the private sector. Demand for housing generally declined during the 4th Plan period, although the market was still active, especially in urban areas. Factors which contributed to the sluggish demand included slower income growth, difficulty in obtaining housing loans, high interest rates, and high prices of houses. The Special Housing Loan Scheme introduced by the Central Bank of Malaysia in 1982 and the new regulations of the public sector employees housing loans scheme reduced speculation and dampened excessive demand for housing. Both schemes affected the housing market adversely since they restricted the loans only to first-time houses buyers. On the other hand, high interest rates charged on housing loans and high prices of houses reduced effective demand for housing since the majority of the potential buyers could not afford those houses.
Supply of house was closely related to demand for housing. In response to the sluggish demand, most private developers postponed or stopped the construction of their housing projects. This action indirectly affected the supply of housing units. Other factors contributing to the shortfall were inadequate housing land, delays in approval for land conversion and difficulty in obtaining bridging finance.
During the 5th Plan Period, the public sector built only 97,126 units of houses out of a target of 149,000 units planned while the private sector delivered 203,802 units out of a target of 552,550 units planned. During this period, the Special Low-cost Housing Programme (SLCHP) was launched in 1986 as part of the anti-recession measures designed to stimulated the growth of the economy during the recession period as well as to increase the supply of low-cost houses. SLCHP received overwhelming response from private developers. A total of 334,600 units were registered for construction compared with only 240,000 units planned under the programme. However, up to 1990, only about 83,940 units or 35 per cent were completed.
The slow progress in the implementation of housing programmes, including SLCHP, was attributed to several factors. These included unsuitability of site or locations, financial and management problems of developers, misuse of funds collected from house-buyers, incompetent contractors and delays in getting plan approvals. These resulted in many housing projects being delayed or abandoned. By 1990, about 277 projects, comprising 63,560 units were abandoned. These were mainly private sector projects, of which 80 per cent were medium-cost houses, involving 36,130 house buyers.
In order to overcome the problem of abandoned housing projects, the Government established the Abandoned Housing Projects Fund in 1990 under the administration and supervision of Bank Negara Malaysia. An initial allocation of RM300 million was provided and this was subsequently increased to RM600 million. The Fund was to assist worthy housing developers to complete their projects as well as assist buyers to secure their houses. A Coordination Committee in each state was set up to coordinate and facilitate the rehabilitation of abandoned projects. In 1993, the Low Cost Housing Fund was established with an allocation of RM500 million. In 1994, the Hard Core Poor Housing Programme was launched with an allocation of RM600 million for construction of low cost units for rental. There was also increase in end financing for buyers of various categories of housing.
Under the 7th Plan period, a target of 800,000 units of houses were planned. At the end of 2000, however, a total of 859,480 units of houses were constructed by both the private and public sectors, giving it an achievement rate of 107.4% of the target. The housing industry experienced remarkable growth in the 1990's but was again affected by the economic crisis beginning July 1997. The worth of overhang properties in the residential sector, industrial sector and unsold shop lots totaled RM 9.84 billion as at end of 2000, up by 11.62% over the previous half year.
 
REGULATORY AND POLICY ISSUES
a) Development Planning Issues Related to Housing
One of the reasons why the economy of the country suffered badly during the last economic recession was because of an overhang in the property market, involving especially condominiums and commercial properties as shown in Tables 5 and 6. This was mainly the result of speculative demand and supply and also reflects a major weakness in planning whereby developments were being permitted without taking into due consideration the real demands. The power to give planning permission lies with the local authority as provided by the Town and Country Planning Act, 1976 (Act 172). It seems that, in the past many of the decisions made by local authorities were not in sync with federal policies. There have also been instances when some of those who already have their own local plan, chose not to comply with the plan when dealing with certain planning proposals. At the same time current laws and regulations provide little room for intervention by the federal government.
Having said that, we also recognise the fact that most local authorities given their limitations in terms of size and expertise of personnel as well as access to data do not have the capacity to deal effectively with development plans. Even if they refer and comply totally with the local plan, their considerations are always based on their own area. What is really needed is an overall plan, which provides a total picture of the requirement and distribution of the different types of housing in the country.
As a way of balancing the power of federal and state government, it is decided that the Town and Country Planning Act, 1976 (Act 172) must be reviewed. Actions have been taken to amend the Act and new provisions are being recommended to enhance the role of the Federal Government in town and country planning to ensure that there will always be check and balance. Among the more important amendments include the formation of the National Physical Planning Council, which will provide the forum for consultation between federal and state governments and also the preparation of the National Spatial Plan.
The Town and Country Planning Department is currently preparing the National Spatial Plan (NSP). Up until now there is no one plan to dictate the physical development of the whole country. NSP is a physical plan, which gives guidance on the direction and pattern of development in the future. It will translate socio-economic policies into spatial dimension. The plan will include future requirement for housing and its distribution. Concurrent to the preparation of the NSP, an information system is being constructed using Geographical Information System (GIS) and will continually be updated to provide useful data for future decision making in planning as well as housing development.
b) Housing Plan Approval and Issuance Of CFO Procedures
Table2 illustrates the various steps in housing development process and the different government departments a developer has to deal with to obtain approval. Housing plan approval is necessary to ensure houses built meet the minimum structural standards under the Uniform Building By-laws (UBBL) 1984 for safety purpose. In view of the many steps involved in getting approval, delays caused by clearance from various technical agencies were often put forward by developers. Also procedures for approval were often different for different local authorities and this non-uniformity of procedures have also created problems for developers.
Various measures undertaken to improve the above situation are as follows:-
i. Exemption from requirement of CFO for individually constructed bungalow
ii.
Amendment to the UBBL which provides for CFO to be deemed to be issued after 2 weeks of submission (provided the Borang E is complete and upon satisfaction of the requirements of the bye-law) if the CFO is not issued by the relevant local authority within that 2 weeks period. So far 7 states have gazetted this amendment i.e. Wilayah Persekutuan Kuala Lumpur, Perak, Selangor, Melaka, Johor, Pahang and Terengganu. The other states are in the various stages of gazetting this amendment.
 
 
 
iii.
Guidelines on Development Planning Areas have been prepared to streamline the various development approval processes to ensure uniformity in all local authorities. This has been circulated to all local authorities for their comments.
 
iv. Time frame to be fixed for technical agencies in giving clearance/approval.
c) Housing Developers Licence and Sale & Advertising Permit
Before a developer can develop any piece of land for housing, application for licence and permit is necessary under the Housing Developers Act (Control and Licensing) 1966. This Act has been formulated to control and monitor the activities of housing developers and protect the interest of house purchasers.
The Ministry has received numerous complaints pertaining to projects being abandoned, poor workmanship, delay in the issuance of certificate of fitness, delay in handing over vacant possession, refusal of developers to pay compensation of late delivery, interest being charged by the developers for late progressive payments and perennial problems associated with the payment of maintenance charges. Table 3 illustrates the number of complaints received by states and types for year 2000. A total of 1,823 complaints were received in 2000 of which 66.54% or 1,213 have been settled.Table 4 shows the number of abandoned projects by states. The government has identified 56 projects with potential to be revived of which 46 projects involving 13,855 units of houses (35% of which are low cost) and 9,331 buyers with estimated cost of RM1.313 billion have been assigned to Syarikat Perumahan Negara for revival exercise.
After having lengthy discussions with the various parties concerned, the main amendments being proposed to the Housing Developers Act to address the shortcomings of the existing act are as follows:-
i. Increasing the paid-up capital of licensed housing developers;
ii. bringing in all the statutory bodies and cooperative societies under the ambit of the Act;
iii. appointment of Deputy Controller to smoothen the efficiency and expedite the issuance of licences;
iv. increasing the penalty two-fold and in certain instances as many as five times;
v. powers to compound;
vi.
setting up a tribunal to look into the problems faced by homebuyers known as the "Tribunal for Homebuyer Claims". It is envisaged the tribunal would save costs and unnecessary delays faced by homebuyers at the present moment;
 
vii.
the power to enter any premises and there search for, seize and detain any property, book or other document. This power is necessary in order to ensure an effective way of enforcing the law especially housing developers who collect money without a housing developers licence; and
 
viii.
power vested on the Minister to terminate the Sale & Purchase Agreement if it is found that 75% of the homebuyers do not want to continue the purchase.
In order to overcome the problems, it is envisaged and expected that the above amendments to the Housing Developers Act would bring much improvement to the housing industry at large and offer greater protection to individual homebuyer.
d) 30% Low Cost Housing Quota
The 30% low cost housing quota has been imposed by the government since 15 August 1982 as a social obligation by developers to complement the efforts of the government to provide affordable housing for all. All housing projects have to allocate at least 30% of houses as low cost units and developers cross subsidise the cost of building these low cost units from the sale of higher cost units.
During the recent downturn in economy many developers find it taxing to cross subsidise the cost of building low cost units since they are not able to sell the higher cost houses and many develop these low cost units much later when the economy recovers. Consequently the targets of low cost houses are not met while there is an over supply of high cost houses and overhang of unsold properties accumulates.
For the 8th Malaysia Plan, it has been proposed that the government build more low cost houses for sale and rental so that the private sector can concentrate on building more low medium, medium and high cost houses. There is a proposal to review the low cost quota and establish the low medium cost quota. In addition, state governments responsible for the allocation of low cost units should focus on efforts towards achieving the target of zero squatters by the year 2005.
e) Computerised Open Registration System
There was lack of enforcement to ensure that the target groups were the ones to benefit from the various low cost housing programmes. The objective of the computerised open registration system is to be transparent and uniform in registration so that only the target groups are allocated low cost units for sale or rental.
So far only 4 states are using the software developed by Jabatan Perumahan Negara (JPN). This is because some states have implemented their own software incorporating the basic criteria determined by JPN. Hence there is presently no direct link up between the states and the federal government to monitor the computerised system. Some developers have also complained that they cannot get the list of eligible buyers from the system or that the states are slow in providing the list. This is sometimes due the fact that low cost units built by the private sector are not in the locations required by eligible buyers hence the states are not able to provide a full list or are slow in providing a list.
JPN is now in the process of developing a software to interface with the different softwares of other states so that information on buyers of low cost units can be centralised. Later phases of the open registration system will be implemented in stages to ensure full enforcement for the monitoring of buyers of low cost houses.
f) Provision Of Public Amenities
Open space needs to be developed and public amenities provided to improve the quality of life of the people. Every housing development by right should provide all the public amenities required. However, more often than not developers of housing projects fail to satisfactorily provide all the necessary amenities. In many cases the areas for public amenities are provided but the amenities are either not constructed or take too long to be constructed. This is mainly due to the fact that the provision of public amenities involves many different parties including developers and government agencies. In this respect, the Ministry is working in line with the requirements of Social Action Plan (PINTAS) to ensure a more integrated effort in the provision of public amenities. Local authorities will be required to gazette open spaces once development planning is given under the proposed amendment to the Town and Country Planning Act 1976. The Ministry is also in the process of drawing up guidelines which require developers to provide basic amenities including developing the open spaces in the approved development areas.
g) Estate Management And Maintenance
As land becomes more scarce due to urbanisation the competitive use of land will cause price to rise thereby making the building of more high rise buildings and apartments more imperative especially in cities and urban areas. The problem of maintenance and upkeep of these buildings are and will continue to be difficult and become more complex. At present, developers manage condominiums and apartments before they are handed over to individual buyers before the issuance of individual titles.
A nominal sum for the maintenance and upkeep of common property will be imposed by the developer but in practice the majority of purchasers do not pay up. The developers may cut off water or electricity supply to the individual units when these purchasers do not pay up their fees but this is not normally done and problems arise when developers do not maintain the common property because of lack of funds. When individual titles are given over to the owners, the developers surrender the maintenance of common property over to a management corporation which is normally run by volunteers among residents. Problems faced by management corporations are usually those of collection of maintenance fees for common property which many residents feel are excessive.
It has been proposed that a Building and Common Property (Maintenance and Management) Act be enacted to ensure the smooth running of high rise buildings and to manage common properties in high-rise flats.
 
FUTURE HOUSING DIRECTIONS
For the Eighth Malaysia Plan (2001-2005) the government will continue to emphasize on it role to ensure that all Malaysians particularly the low-cost groups have access to adequate and affordable housing and related facilities.Table 7 shows the proposed housing target for the 8th Malaysia Plan. A total of 615,000 units of houses have been targetted to be built during this period of which 312,000 units or 50.73% are to be delivered by the public sector and 303,000 or 49.27% by the private sector. 248,000 units (or 40.33% of total target) of low-cost are projected to be built of which the majority or 83.87% are to be built by the public sector and another 16.13% by the private sector. The emphasis on low-cost housing during this period reflects the government's commitment to provide affordable housing for the low-income groups. To achieve the targets projected, a number of measures will be introduced such as the implementation of modular coordination concept to improve the quality of housing and reduce costs in production of mass housing. Another method is by introducing factory-made building components such as prefabricated system to speed up production of low-cost units and the introduction of the open industrialised building system in housing industry to make housing construction system more flexible and replacement of parts less troublesome. An Integrated National Housing Policy will also be formulated under the 8th Malaysia Plan to guide the process of housing development more effectively and respond more adequately to the growing housing needs of the nation.
The concept of sustainable cities is sustainable development where the community's development needs are met without imposing unsustainable demands on local or global natural resources and systems. The central focus on sustainable cities will be the improvement of housing, living and working environment where people can have access to all social amenities and supporting infrastructures. To prepare for sustainable cities, city planners have to depend on public participation in order to ensure quality living environment through master plan preparation. At present, planning is done by urban planners without much consultation with the people. Planning cannot be accomplished by planners operating in a vacuum. Improving quality of living environment requires the active participation of various groups in society. It requires the active participation of property owners, bankers, developers, architects, engineers, contractors, and others involved in real estates. It then requires the sanction of community groups, civic organizations, elected and appointed public officials, and municipal employees. Planning after all is about change, preventing undesirable change and bringing desirable one. Thus, the scope can be broadened and the process to gear for greater transparency with the mechanism to obtain feedback from public needs to be reviewed and positive values in new developments incorporated to ensure quality living environment. In line with this, MHLG has been consulting the relevant parties to ensure their views and interests are taken into consideration.
 
CONCLUSION
The National Spatial Plan being proposed will enhance the role of the federal government in town and country planning so that there will always be check and balance. This will ensure that proper planning is carried out for projects and hopefully will minimise the problem of mismatch between supply and demand of houses. With the proposed Plan it is hoped that in the future, in times of economic downturn, the problem of unsold properties worth billions of ringgit should be reduced. The National Spatial Plan together with the integrated National Housing Policy to be formulated will pave the way towards successful housing development in Malaysia.
Research and Development Division
National Housing Department
Malaysia
April 2001
 
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TABLE 1
 

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TABLE 2
 

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TABLE 3
 

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TABLE 4
 

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TABLE 5
 

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TABLE 7