Penang on fact-finding mission on rent-control policy

PETALING JAYA (Aug 12): The Penang state government is on a fact-finding mission to pin point the possible impact of a rental hike on its pre-war buildings in George Town.

“We are gathering feedback from the public to gauge the amount of people who would be affected by the unscrupulous hike in rental rates,” said Penang State Exco for Housing and Town & Country Planning Jagdeep Singh Deo at the Penang International Property (PIP) mid-term review conference in Penang last Friday (Aug 5). The summit was officiated by Penang Chief Minister Lim Guan Eng.

The state government is mulling a decision to implement the Rent Control Enactment similar to the Rent Control Act which was repealed in 1997.

Jagdeep was commenting on complaints of soaring rental rates to as high as between RM3,000 and RM10,000 following George Town’s inscription as a Unesco World Heritage Site in 2008.

He was speaking during a panel discussion titled “Prospects of Penang Property Sector in 2017” moderated by vice president of FIABCI (International Real Estate Federation) Malaysia, Michael Geh. He noted that the state government is trying to preserve the city’s living heritage. “Some of the businesses that have long traded in these buildings may move out due to high rents,” he added.

“If one day Unesco is alerted that there is no more living heritage [in the pre-war buildings], it will pose a risk to our World Heritage status,” he said.

On the other hand, if rents are kept low, there may be a lack of motivation for landlords to maintain their properties. 

Real Estate and Housing Developers’ Association Penang chairman Datuk Toh Chin Leong noted that a rent-control policy may see the pre-war buildings left unkempt as the landlords may not have the incentive to refurbish their property due to the high cost involved.

“This is especially true for those who have just recently refurbished their buildings,” Toh said.

Meanwhile, property development, construction and management committee convenor, Datuk Finn Choong Khuat Seng who was also at the event stressed that the state government has to be careful in protecting the rights of the respective parties involved, including tenants and landlords, and how it would affect the heritage listing.

“The word landlord now sounds like a dirty word [in view of this issue]. You will find that apart from the large clan associations who are tenanting the heritage buildings, most of the landlords there have only one or two properties in the area. These buildings are left by their forefathers who took a big risk in buying these properties,” Choong noted.

“At the end of the day, we are not trying to control the rent. We just want to regulate it so that it does not have an unnatural hike. We still need more engagement to justify if we should even go down this route at all,” Jagdeep concluded. — PIP 2016

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