National

Housing
Policy
in Malaysia

PREPARED BY
NUR AFIFAH BINTI JAILANI - 2013436184
 Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan Malaysia

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TABLE OF CONTENTS

INTRODUCTION
THE NEED FOR A NATIONAL HOUSING POLICY
ISSUES AND CHALLENGES OF THE NATIONAL
HOUSING POLICY
THE GOAL OF THE NATIONAL HOUSING POLICY
OBJECTIVES OF THE NATIONAL HOUSIING POLICY
THRUSTS AND POLICY STATEMENTS

Thrust 1
Thrust 2
Thrust 3
Thrust 4
Thrust 5
Thrust 6

ACRONYMS
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National Housing Policy

INTRODUCTION

(10MP), ensuring access to quality and affordable housing.

H ousing is a basic need that can enhance the quality of
life. The construction sector contributes to the nations
economic growth through its linkages with the other sectors
In the 10MP, the Government has targeted 78,000 units of
affordable houses to be built, consisting of 38,950 units
including the service and manufacturing of construction under the Peoples Housing Programme (PHP) and 39,050
materials sectors. According to the Economic Report units under programmes related to the Ministry of Rural
2010/2011 issued by the Ministry of Finance Malaysia, the and Regional Development to meet the needs of the low-
construction sector is expected to contribute 4.9% of the income groups and squatters.
Gross Domestic Product (GDP) in 2010.
Furthermore, a RM500 million fund will be allocated for the
Hence, the Government needs to continuously concentrate repair and maintenance of public and private low-cost
on the need to provide adequate and quality housing which housing under the 10MP. This fund will be disbursed on a
is affordable for sale or rent especially for the targeted matching grant basis, where half of the cost will be borne
groups. The focus will be on the suitability of locations and by the Government and the other half by the management
conduciveness of the living environment in line with the committee or residents association.
Fourth Strategic Thrust of the Tenth Malaysia Plan

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Under the Government Transformation Programme (GTP), National Key Results Areas (NKRA)
which are raising living standard of low-income households and improving rural basic
infrastructure respectively, the Government has decided that drastic steps will be taken to
overcome problems pertaining to housing especially involving the poor and hardcore poor.
These steps are as follows:

(i) Providing assistance to increase house ownership by offering 44,000 units

of existing low-cost houses for sale or rent through the Kuala Lumpur City
Hall (DBKL) and the National Housing Department (JPN);

(ii) Providing 50,000 units of new and rehabilitated houses for the urban poor
and hardcore poor by 2012, two-thirds of which will be in Sabah and
Sarawak.

(iii) Ensuring only eligible recipients receive housing aid. Recipients are identified
by district or state agencies through the e-Kasih portal, which is a national
database for capturing data on low-income households; and

(iv) Offering financial assistance for initial deposits, legal fees and low-interest
loans for the low-income households who are not recipients of or do not
purchase public low-cost houses.

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To fulfil these needs, factors such as affordability of the buyers,

development cost and selling price persistently influence the
supply and demand in the housing sector. Based on the current
situation, housing development is concentrated in the urban
and suburban areas, where the purchasing power is higher and
the market is extensive. In order to address the current housing
needs, both the Government and the private sector must play
their respective roles to fulfil their social obligations especially to
the low-income and middle-income groups.

The Ministry of Housing and Local Government (MHLG) has

been monitoring the implementation of housing development
projects by the private sector and enforcing the Housing
Development Act (Control and Licensing) 1966 [Act 118] to
ensure housing projects are implemented according to the
schedule and completed within the stipulated timeframe.

The MHLG has also been taking steps to revive abandoned

projects through the Special Task Force for Revival of Abandoned
Housing Projects (STF). The STF focuses on efforts in reviving
abandoned housing projects, solidifying the legal aspects and
ensuring more effective enforcement, as well as establishing the
direction and policy of the housing industry.
 Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan Malaysia

THE NEED FORA

National Housing Policy

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A National Housing Policy (NHP) is needed

to provide the direction and basis for the
planning and development of the housing
sector by all relevant ministries, departments
and agencies at the federal, state and local
levels as well as the private sector.

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ISSUES AND CHALLENGES

OF THE
National Housing Policy
To ensure that the housing sector achieves healthy development
and continuously contributes positively to the nations economic
growth, various issues and challenges related to the housing
sector need to be effectively addressed. Among the issues
identified are:

(i) Quality of the housesbuilt;

(ii) Abandoned housing projects;

(iii) Affordability and accessibility of the

people to own orrent houses;

(iv) Demand exceeding supply for low-cost

and medium-cost houses;

(v) Construction of Affordable Public

Housing(APH)atnon-strategic locations;
and

(vi) Distribution of APH.

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National Housing Policy

To address these issues holistically, the NHP can be used as a basis to guide,
manage and coordinate the planning and development of the housing sector more
efficiently and systematically. The NHP is formulated to ensure that the housing
sector can overcome the current and future challenges and contribute to the
national economic growth. The challenges are as follows:

(i) Inadequate provision of APH

Generally, houses supplied by the private sector have been

sufficient for the high-income group. However, houses supplied
for the low-income and middle-income groups, including people
with special needs, senior citizens, single mothers and squatters
are still insufficient.

Based on the data captured under Computerized Open

Registration System (SPT) managed by the MHLG, from 1
January 2009 to 31 August 2010, 20,426 applicants have
registered to own or rent low-cost houses nationwide. Moreover,
as of 30 June 2010, census conducted by State Governments
showed that 90,282 squatter families have yet to be relocated.

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(ii) Low construction quality

Although most houses built have met the minimum

quality requirements set, there are still developments
which have not met the standard requirements and
that leads to low quality construction. The use of
low quality construction materials and lack of skilled
workers also contribute to the low quality of houses
built. Low usage of state-of-the-art technology in
construction and high dependency on unskilled
and cheap foreign manpower also contribute to the
decline in the quality of houses.
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National Housing Policy

(iii) Weaknesses in ensuring implementation and

compliance with the service delivery system
on housing

Before a housing project commences, it has

to go through the application and approval
processes at the land office and the Local
Authority (LA). MHLG is responsible for the
issuance of housing development licenses
and advertisement and sale permits after the
development order (DO) and building plans
are approved by the LA. If there is a glitch in
any of the processes, the whole system or
development process would be disrupted
and the project would not start on time.

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(iv) Weaknesses in control, monitoring and enforcement

There are various laws which are applicable to the housing development.
Amongst them are the National Land Code 1965 (KTN), Housing
Development Act (Control and Licensing) 1966 [Act 118], Local
Government Act 1976 [Act 171], Town and Country Planning Act 1976
[Act 172], Street, Drainage and Building Act 1974 [Act 133] and other
state regulations and land laws. The need to abide by these legal aspects
and regulations is vital to be understood and complied with to ensure
housing projects are implemented based on the issued approvals.
However, there are still weaknesses in the control, implementation and
enforcement of these laws.

In building APH, there are several agencies and bodies involved such as
Syarikat Perumahan Negara Berhad (SPNB), statutory bodies and State
Economic Development Corporations (SEDC). Coordination amongst
these agencies is needed so that the construction and distribution of
these houses can be executed in a more orderly, systematically and a
just manner in each state. In this regard, the NHP proposes that the role
and collaboration among agencies and related bodies are further
strengthened.

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(v) Issues on implementation of APH quota

Developers are required to provide APH according to the quota set by State
Governments. However, these quotas vary from state to state. Developers would
prefer to be exempted from having to build APH because the cost of supplying
APH has to be cross-subsidized from the sale of high and medium-cost houses.

(vi) Enhancing the sustainability of the housing sector

Although efforts have been taken to enhance the sustainability of the housing sector,
there is a continuous need to consolidate the efforts in the context of balanced
development. In terms of research and development (R&D) to strengthen the
quality and housing construction standards, the NHP focuses on the use of latest
technology and tools such as Industrialized Building System (IBS) and encouraging
technology and knowledge transfer from other countries.

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(vii) Inadequate social amenities and Non-

conducive environment

Some housing areas do not have

complete basic social amenities and
facilities such as transportation, safety
and maintenance. The NHP proposes
that housing developments should also
incorporate the provision of social
amenities, basic facilities and providing
a conducive environment. The NHP
also recommends that neighborhood-
based programmes for curbing social
issues, public safety and conserving the
environment should be enhanced.

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 Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan Malaysia

THE GOAL OF THE

National Housing Policy

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To provide adequate, comfortable,

quality and affordable housing to
enhance the sustainability of the
quality of life of the people.

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Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan Malaysia

OBJECTIVES OF THE
National Housing Policy

Objective 1
Providing adequate and quality
housing with comprehensive
facilities and a conducive
environment;

Objective 2
Enhancing the capability and
accessibility of the people to own
or rent houses;and

Objective 3
Setting future direction to ensure
the sustainability of the housing
sector.
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THRUSTS AND POLICY

Statement

In order to achievethe objectivesstated above, the NHP is formulated

based on six (6) thrusts and twenty (20) policy statements.

Thrust 1:
Provision of Adequate Housing Based on the Specific
Needs of Target Groups

Thrust 2:
Improving the Quality and Productivity of Housing
Development

Thrust 3:
Increasing the Effectiveness of Implementation and
Ensuring Compliance of the Housing Service Delivery
System

Thrust 4:
Improving the Capability of the People to Own and
Rent Houses

Thrust 5:
Sustainability of the Housing Sector

Thrust 6:
Enhancing the Level of Social Amenities, Basic
Services and Liveable Environment
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THRUST 1:
Provision of Adequate Housing Based on the Specific
Needs of Target Groups

Housing is a basic need and in line with shelter for all, the Government will strive
to ensure that every person can own or rent a house. Nevertheless, housing
needs for the low-income group, who earn a monthly household income of less
than RM2,500, are still not adequate.

Hence, the Government and the private sector need to continue providing
affordable houses for sale or rental especially for the low income group, and
also the disabled, senior citizens and single mothers. The private sector is also
encouraged to develop medium-cost houses to fulfil the needs of the middle
income group with a monthly household income of RM2,500 to RM3,999.

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The three policy statements are outlined below:

NHP 1.1: Enhancing the role of the State Government agencies,

besides the Federal Government agencies and the private
sector in continuing the efforts of providing affordable
houses for rent or for sale.

NHP 1.2: Providing housing for all especially low-cost houses for the
low-income group and encouraging the provision of
medium-cost houses for the middle-income group; and

NHP 1.3: State Governments are given flexibility in determining the

quota of low-cost houses to be built in mixed-development
areas based on the suitability of the location and local
demand.

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THRUST 2:
Improving the Quality and Productivity of Housing Development

Although most houses built have met the minimum quality

requirements set, there are still developments which have not
met the standard requirements and that leads to low quality
construction. The use of low quality construction materials and
lack of skilled workers also contribute to the low quality houses
built. Low usage of state-of-the-art technology in construction
and dependency on unskilled and cheap foreign manpower
also contribute to the decline in the quality of houses. Therefore,
NHP outlines efforts to improve the quality and productivity of
housing development by encouraging the use of skilled and
accredited workers, minimum construction quality standards,
and quality local buildings materials.

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The three policy statements are:

NHP 2.1: The use of skilled, trained and accredited workers for
construction works to raise the quality of construction
through approved and accredited systems;

NHP 2.2: Setting the quality standards and minimum housing

specifications; and

NHP 2.3: Increasing the use of local building materials.

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THRUST 3:
Increasing the Effectiveness of Implementation and Ensuring
Compliance of the Housing Service Delivery System

Complying with laws and rules related to housing

development is essential to ensure projects are
developed in an orderly and timely manner, and based on
specifications set. The housing sectors delivery system
would be affected and disrupted if laws, policies and rules
are not implemented effectively.

Through NHP, coordination and implementation of policies

involving various agencies will be enhanced. Furthermore,
the ability and efficiency of the housing delivery system
will also be improved through monitoring, effective law
enforcement and implementation of new initiatives such
as the One Stop Centre (OSC), Certificate of Completion
and Compliance (CCC) and the Build-Then-Sell (BTS)
concept. In addition, a single federal agency will be
responsible for developing, selling and maintaining public
low-cost houses in the Federal Governments jurisdiction
to curb issues pertaining to public low-cost houses.

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The five policy statements are as outlined below:

NHP 3.1: Formulating, improving and enforcing laws,

regulations and guidelines pertaining to the
housing sector;

NHP 3.2: Enhancing the Governments service delivery

system related to housing through policy
coordination and implementation involving
various agencies;

NHP 3.3: Encouraging the BTS concept in the housing

provision system;

NHP 3.4: Improving relations and collaboration among

the public and private sector as well as
professional bodies in the housing sector; and

NHP 3.5: Public housing programmes at the federal level

are placed under the responsibility of a single
federal agency which plans, implements, sells/
rents and maintains them. State Governments
are still responsible for public housing
programmes at the state level through their
subsidiary agencies.

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THRUST 4:
Improving the Ability of the People to Own and Rent Houses

In fulfilling housing needs for the low-income and middle-income

groups, factors such as affordability, cost of development, and
selling price frequently influence supply and demand in the
housing sector. Currently, housing developments are
concentrated in high-density urban and suburban areas where
the purchasing power and market are significantly immense.
However, in order to balance up current housing needs
especially for the low-income and middle-income groups, the
Government and the private sector must play their roles to fulfil
social responsibility to the people. Moreover, through NHP, a
comprehensive and holistic approach is introduced to increase
the accessibility to own or rent the provided houses.

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The three policy statements are as outlined below:

NHP 4.1: Setting prices for low-cost houses as well

as controlling ownership and sales to avoid
speculation;

NHP 4.2: Setting a realistic rental rate for low-cost

houses; and

NHP 4.3: Providing financial support for the low-

income group in order to own houses.

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THRUST 5:
Sustainability of the Housing Sector

Through NHP, efforts to enhance the sustainability of the housing

sector are implemented by both the Government and the private
sector. The efforts are balanced development implementation and the
use of environmental-friendly housing development concept with new
technologies and innovations. Green technology, which can help to
conserve the environment in the context of energy efficiency specifically
in building design, the use of recyclable materials and the development
of smart buildings, is given emphasis. Indirectly, the aspects mentioned
can elevate the quality of life as well as preserve the environment.

The three policy statements are as outlined below:

NHP 5.1: Increasing the use of new

technologies, innovation and
provision of environmental-friendly
housing;

NHP 5.2: Improving research and development

(R&D) efforts in the housing sector;
and

NHP 5.3: Encouraging urban renewal and

redevelopment of old buildings in
line with the Governments objective
for conservation and preservation
purposes.

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THRUST 6:
Enhancing the Level of Social Amenities, Basic Services and
Liveable Environment

Some housing areas do not have complete basic social amenities

and facilities in the form of transportation, safety and maintenance.
Since housing is an integral aspect to shape prosperity and
harmony among communities, the NHP proposes that the provision
of housing also incorporates improving the level of basic and social
amenities, as well as creating a conducive and liveable environment.
This can be achieved by well-planned development in line with the
implementation of the Safe City concept and community building.

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The three policy statements are as outlined below:

NHP 6.1: Providing housing and sustainable development

complete with basic amenities and facilities based on
standards and current needs as well as other social
needs to create a conducive and liveable environment;

NHP 6.2: Strengthening the management mechanism and

maintenance of stratified buildings and common
properties; and

NHP 6.3: Implementing the concept of Safe City in housing

areas.

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 Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan Malaysia

ACRONYMS

10MP : Tenth Malaysia Plan

Act 118 : Housing Development Act (Control and Licensing) 1966

Act 133 : Street, Drainage and Building Act 1974

Act 171 : Local Government Act 1976

Act 172 : Town and Country Planning Act 1976

APH : Affordable Public Housing

BTS : Build-Then-Sell

CCC : Certificate of Completion and Compliance

DBKL : Kuala Lumpur City Hall

GDP : Gross Domestic Product

GTP : Government Transformation Programme

IBS : Industrialised Building System

JPN : National Housing Department

KTN : National Land Code 1965

MHLG : Ministry of Housing and Local Government

NGO : Non-Governmental Organisation

NHP : National Housing Policy

NKRA : National Key Results Area

OSC : One Stop Center

R&D : Research and Development

SEDC : State Economic Development Corporation

SPNB : Syarikat Perumahan Negara Berhad

SPT : Open Registration System

STF : Special Task Force for Revival of Abandoned Housing

Projects
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