The Urban Renewal Bill 2024: Promoting Sustainable Urban Redevelopment In Malaysia

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The Urban Renewal Bill 2024 was tabled to provide a comprehensive and uniform legal framework to promote the mechanisms for urban redevelopment, regeneration and revitalisation. The Bill aims to align Malaysia's urban planning law with the objectives of sustainable development.

The Urban Renewal Bill 2024 is applicable to Peninsular Malaysia and the Federal Territories of Putrajaya and Labuan. The Bill is not applicable to the conservation area under the Heritage Act 2005. The Bill is to be read in conjunction with existing laws relating to land, housing and local government.

Types Of Urban Renewal

Urban renewal is defined in Section 2 of the Bill as “redevelopment or improvement or modification of buildings and includes the alteration of any category of land use, partition, subdivision or amalgamation of land, and subdivided building or land”. Urban renewal may be carried out in any area which has been identified under the development plan as (a) city or city centre with population of more than 10,000; or (b) district administration centre with population of less than 10,000.

The Bill categorises urban renewal into three distinct types:

1.              Urban Redevelopment – development made to change the physical condition of the existing sites which includes demolishment, clearing of the sites, erecting buildings and upgrading infrastructure and utility facilities.

2.              Urban Regeneration – development made in building areas which are neglected, dilapidated or abandoned by the process of repairing the existing building or upgrading the infrastructure or utility facilities and landscaping.

1.              Urban Revitalisation – development made to improve the said area or building by the process of upgrading, beautification or landscaping including changing the activities suitable to the standard and function of that area or building.

Administrative Framework

The Bill establishes two key administrative bodies:

1.               Federal Executive Committee (FEC)

The Minister in charge of the control and supervision of urban renewal sits as the Chairman of the FEC. The key functions of the FEC are:

(a)            to advise the SEC on the declaration of the urban renewal area and viability of the urban renewal project

(b)            to certify the incentive and qualified person to receive the incentive as prescribed

(c)             to ensure the right and interests of the proprietor or occupier is guaranteed and protected as prescribed

(d)            to monitor the progress report of urban renewal periodically

(e)            to determine the criteria for the qualification of the developer as prescribed

(f)              to advise the SEC on the selection of the qualified developer to carry out the urban renewal project

2.               State Executive Committee (SEC)

The state Menteri Besar or Chief Minister in charge of the control and supervision of urban renewal chairs the SEC, where the key functions are:

(a)            to consider and certify the proposal of urban renewal project implementation received from the developer

(b)            to approve urban renewal area for urban renewal declaration after obtaining the advice of the FEC

(c)            to monitor the urban renewal project in the state

(d)            to prepare the progress report of state urban renewal project periodically and to submit the report to the FEC

(a)            to grant incentives to qualified persons

(b)            to identify qualified developers to be submitted to the FEC

(c)            to certify qualified developers to perform urban renewal projects

Urban Renewal Area

An urban renewal project is subjected to the following criteria as outlined in Section 3(3) of the Bill: 

(a)                “Consent threshold for participation is based on the age of the building under Section 12 of the Bill;

(b)                certificate by an engineer based on periodical inspection as provided under Street, Drainage and Building Act 1974 [Act 133] that – 

(i)                  visual condition of the building suffer from defects, deformation or deterioration of the building or structure; or

(ii)                 the structure of the building is likely to endanger or reduce the structural stability or integrity of the building, infrastructure and utility;

(c)                abandoned building;

(d)                neglected building;

(e)                mismanaged building by the management corporation in the development area that led to unmanaged, unmaintained and deterioration of the said building structure and infrastructure; or

(f)                  the occurrence of a nuisance caused by circumstances in paragraph (a), (b) ,(c), (d) or (e).”

Additionally, upon acquiring a unanimous resolution, the proprietor(s) of an area or building may, on their own initiative, submit an application to the SEC to implement urban renewal in their area or building.

Consent Threshold For Participation

Pursuant to Section 12 of the Bill, the consent threshold for participation in urban renewal of an area or building are as follows:

(a)                where the age of the building is 30 years, the consent threshold for participation is 80%;

(a)                where the age of building is more than 30 years, the consent threshold for participation is 75%;

(b)                where an engineer has issued a certificate under Section3(3)(b), whereby the visual condition of the building suffer from defects, deformation or deterioration of the building or structure, or the structure of the building is likely to endanger or reduce the structural stability or integrity of the building, infrastructure and utility, the consent threshold for participation is 51%; or

(c)                where a building is abandoned, the consent threshold for participation is 51%.       

Protecting Proprietors & Occupiers

Section 14 of the Bill provides a safeguard that ensures the rights and interests of existing proprietors and occupiers are protected throughout the urban renewal process. Section 14 reads:

“The Federal Executive Committee or the State Executive Committee shall ensure that the proprietor or occupier who has agreed to participate in the urban renewal project receives an offer of not less favourable than what the proprietor or occupier currently enjoy as prescribed”

This provision specifically mandates that the FEC or the SEC must ensure that any proprietor or occupier who has consented to participate in an urban renewal project receives an offer that is not less favourable than the terms, conditions and benefits they currently enjoy. This serves as a reassurance that participation in urban renewal does not come at the cost of diminished rights or lower standards of living and prevents scenarios where individuals are pressured into unfavourable deals or left with inferior housing outcomes under the guise of urban progress.

Conclusion

By targeting urban decay, infrastructure decline and neglected properties, the Urban Renewal Bill 2024 marks a transformative step toward reshaping Malaysia’s urban landscape. By introducing the new legislative framework, the Bill not only streamlines the processes of redevelopment, regeneration and revitalisation but also ensures that these efforts are aligned with the broader goals of sustainable urban development.

The clear categorisation of urban renewal types, structured consent thresholds and the establishment of dedicated administrative bodies at both federal and state levels stablish a strong institutional framework for effective implementation. Importantly, the Bill aims to strike a balance between enabling redevelopment and safeguarding the rights and interests of stakeholders including property owners and occupiers.

28 May 2025