Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Saturday, August 21, 2010

Coming up with a fair and equitable solution is not easy

Talk of developing Kampung Baru is not new. Different prime ministers since Tun Dr Mahathir Mohamad have talked about it. These have remained mere words. This time around, things seem to be moving more definitely.

The daunting challenges faced by past administrations when it comes to developing Kampung Baru remain unresolved until today.

A walk around the community and conversations with the residents reveal the challenges facing the Najib administration if his plans for development are to go ahead. The first is that the holdings are small, averaging about 10,000 sq ft. Development is not possible unless pieces of land are combined together.

The second problem is multiple ownership. One 16,000 sq ft of land belongs to 12 owners. Several years ago, UDA Holdings Bhd, which were doing studies on the area, found that a quarter acre has 72 owners. On average, there are between four and 10 owners for a housing plot.

A third problem is the uniqueness of Malay Reserve Land. As the name implies, only Malays can live and own it. The difference between Kampung Baru and other tracts of Malay Reserve Land like Datuk Keramat and Sg Pencala area is Kampung Baru was specifically built by the British to house the Malays in Malaya’s pre-Merdeka Days. This means that in order for non-Malays to live or buy properties there, laws must be changed.

While these are the three main challenges that may scupper the government ambitions for enclave, there are other underlying issues at stake.

While Kampung Baru is largely tenanted today, there are those who have lived there for three to four generations. Although many of them have sold their properties during the 1980s, many have held on to their properties for rental income while they seek another lifestyle in more contemporary surroundings.

Because the land size averages about 10,000 sq ft, this enables landowners to built concrete houses large enough to accommodate between four and six families. These “new” properties are referred to as “rumah yang ada empat atau enam pintu” (a house with four or six doors), which essentially means a house with four to six households, each family taking two rooms and sharing the common space like kitchen, living area and possibly washrooms. While there are still many elevated Malay-styled houses on stilts which are typical out of a kampung scene, there are also a number of these multiple tenanted concrete housing.

The compensation is considered as a one-off windfall, while rental is a recurring source of income for them. Their ownership also remains intact.

Unless the Government is able to give them satisfactory compensation using some acceptable and transparent formula, coupled with a recurring source of income, as well as first right of purchase of properties at a price they consider as “reasonable”, they may not part with their inheritance. Even if 90% agrees to sell, it would still scupper whatever plans the Government may have, unless that 10% is located at the peripheral.

Although money is a strong incentive, because these are family homes for generations, these personal sentiments do not come with a price tag. They want development, but they also want their land rights to remain intact.

The Government has announced its intention to develop various pieces of land in and around Kuala Lumpur, some of which post far fewer challenges than does the Kampung Baru project.

The other issue is compensation. Landowners do not understand why their land is valued at between RM200 and RM300 per sq ft just because it is Malay Reserve Land when it is located smack in the city. They benchmark their land against the vicinity of Jalan Kia Peng, Kuala Lumpur, which is about RM1,000 per sq ft and the Kuala Lumpur City Centre, which is about RM2,000 per sq ft.

The Government will have to come up with a fair and equitable solution, which is easier said than done. It is a project with far larger implications than just benefiting the land owners and residents.

Assistant new editor Thean Lee Cheng thinks the stake for developing Kampung Baru is very high.

By The Star

No comments: