Dilapidated buildings like this one are ripe for redevelopment. — THOMAS YONG/The Star

The  reasoning behind the government’s push for the URA 

By Joseph Wong

While many disused and ageing buildings are undergoing redevelopment overseas, Malaysia continues to debate its Urban Renewal Act (URA), set to be tabled in Parliament this July. The legislation, aimed at addressing deteriorating urban housing and spurring the redevelopment of ageing apartments, condominiums, offices and other purpose-built structures, has faced multiple delays since its initial proposal. 

Resistance from stakeholders, particularly concerning bumiputera quotas, displacement risks and en bloc sales, has hindered its progress. There is also the fear of giving consent to redevelop their property, only to later discover that the development has stalled or, worse, been abandoned by the property developer who was supposed to complete the project. Another flashpoint in the redevelopment debate is the consent threshold, with concerns over unreachable property owners and those unwilling to grant approval potentially stalling much-needed renewal efforts.

In addition, several compelling counterarguments have emerged, questioning the underlying rationale for pushing the URA forward, considering that there are already existing laws that could be used for redevelopments.

To clarify, Housing and Local Government Minister Nga Kor Ming said that the URA would require 80% approval from owners, consistent with Singapore’s standard. By comparison, Melbourne has a 75% threshold for strata developments while Tokyo and Shanghai require only a two-thirds majority.

To accelerate the redevelopment of abandoned buildings—where ownership is unclear or developers have fled—the government proposes lowering the threshold to 51%. “Malaysia’s URA is more embracing than other countries’ because it even covers abandoned projects,” said Nga. 

Lifespan of buildings

The average lifespan of a high-rise apartment or office in Malaysia is estimated to be 60 to 80 years, although this can be extended with regular maintenance and refurbishment, he said. 

Based on this, he noted that there are many pre-Malaysia buildings that are nearing their lifespan given that the nation is already 62 years old. “I don’t want to be held responsible for a dilapidated building if it collapses. Do you want that responsibility?” he asked.

Kuala Lumpur City Hall and PLANMalaysia have identified 534 areas suitable for urban renewal, based on four pillars: Redevelopment, regeneration, rejuvenation and preservation. Many of these areas include low-cost flats built in the 1950s to 1970s, now plagued by fire hazards, poor sanitation, structural decay and outdated wiring.

The Fire and Rescue Department has confirmed that many of these buildings have a lifespan of just 70 to 80 years. “We cannot ignore this any longer,” Nga stressed.

Nga stressed that the time has come to tap into the expertise of Malaysian developers who have made their mark on international redevelopment projects and redirect their skills toward revitalising Malaysia's urban landscape.

Emphasising that public safety is the top priority, Nga said buildings deemed structurally unsafe would be subject to mandatory redevelopment, noting that while some well-built structures can stand the test of time, many poorly constructed ones do not meet that standard.

To build confidence for URA, he said his ministry is planning a nationwide road tour to showcase both dilapidated buildings and successful renewal projects to parliamentarians and local authorities.

To ensure redevelopment projects are carried out effectively and with minimal disruption to residents, there are several viable approaches that can be implemented, said Nga. One solution is the provision of temporary housing for affected homeowners during the construction period, allowing them to vacate their existing units without the risk of displacement or homelessness. This transitional arrangement provides a safety net while the new development is being built.

Alternatively, he added, a phased redevelopment strategy can be employed, particularly in larger projects. Under this model, a section of the site is redeveloped first, and once completed, existing residents can be relocated into these new units. This then frees up the next portion of land for redevelopment. Such a staggered approach helps maintain a sense of community continuity and reduces the psychological and logistical stress typically associated with large-scale urban renewal.

Encouraging developers to invest at home

For the URA to be truly effective, property developers must actively engage in the process—not merely evaluate projects based on profit margins—especially since many of the buildings ripe for redevelopment are located in prime areas.

Citing Melbourne’s redevelopment experience, Nga said Australia’s urban renewal projects take into account environmental impact, community needs, business interests and overall viability—ensuring long-term sustainability.

He noted that many Malaysian developers are thriving on the international stage, particularly in Australia, where they are at the forefront of some of the country’s largest and most transformative urban renewal projects. As a result, the Malaysian government is now urging these developers to rebalance their investment priorities and channel more resources back into the domestic market.

“It’s time to bring some of that international ambition home,” Nga said. “Malaysia needs that same level of innovation, capital and commitment from our developers to transform and future-proof our own cities." He also has called on major institutional stakeholders to redirect a greater share of their resources back into the domestic property market, particularly to support Malaysia’s own urban redevelopment needs.

“Permodalan Nasional Bhd is a shareholder in SP Setia, and we’ve asked it to scale back overseas expansion in favour of local urban renewal,” Nga said during a recent press conference. He added that the government is encouraging developers and investors to reallocate at least 70% of their investment portfolios to domestic projects. 

The goal, he said, is to stimulate the local economy, strengthen the value of the ringgit, and create much-needed momentum for the country’s own urban renewal efforts, particularly as Malaysia prepares to table its long-awaited URA in Parliament.

With many Malaysian developers actively building in major cities like Melbourne, Sydney and London, their international success has showcased their capability to deliver world-class, sustainable developments. However, back home, hundreds of ageing residential blocks and deteriorating low-cost housing projects remain in dire need of attention. Nga noted that without stronger local investment, these communities will continue to face safety hazards, poor living conditions and a declining quality of life.

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