Overview of Malaysia’s Public Housing History

Public housing has been part and parcel of Malaysian development since it gained its independence in 1957. Since then, the Federal Government have spearheaded many initiatives and programmes to provide low-cost housing for citizens. These programmes form part of the National Housing Policy and have gone through five phases, namely; Post-independence Housing Phase (1957-1970), Housing for the Poor (1970-1985), Market Reform (1986-1997), Slum Clearance (1998-2011), and State Affordable Housing (2012-present).

The Government developed the National Housing Policy and its various phases with the nation’s economic and development policies, such as the Malaysia Plan and the New Economic Policy (NEP) and local and global political-economic trends and developments. Therefore, the brief history of Malaysian public housing must be seen through these policy changes and the political-economic environment.

 

Post-independence Housing Phase

The early phase of low-cost public housing development in Malaysia began during the Post-Independence Housing Phase, which lasted between 1957 to 1970. At the start, the development of low-cost public housing was under the purview of the Housing Trust Federation, which was set up earlier by the British. The focus of the Housing Trust Federation was to provide housing in rural areas. However, due to a lack of funds and expertise, the Programme had minimal development, with only 7,431 housing units built between 1956 to 1965.

Then, in 1964, the Ministry of Local Government and Housing was set up. With rapid urbanisation and rural-urban migration, the ministry introduced the Housing Crash Programme to build low-cost and small-sized housing. This Programme was in line with some of the objectives of the 1st Malaysia Plan to provide improved housing, community facilities, welfare and other services to the growing Malaysian population. Notable housing projects under this Programme included the Razak Mansion and Pekeliling Flats in Kuala Lumpur and the Rifle Range in Penang, all launched between 1967 to 1969. Within two years, the Programme built 14,175 housing units.

 

Housing for the Poor

After the 1969 racial riots, the Malaysian government introduced the New Economic Policy (NEP). This policy, which began with the 2nd Malaysia Plan and lasted until the 5th Malaysia Plan, hoped to achieve national unity through socio-economic restructuring of Malaysian society and eradicating poverty. However, the NEP led to a mass urban migration resulting in an acute housing shortage and squatter settlements in the urban area. The housing shortage shifted the national housing policy towards the Housing for the Poor phase between 1970 to 1985. During this phase, the flagship low-cost public housing programme was the Perumahan Awam Kos Rendah (PAKR), introduced in 1976.

During this phase, the Federal government relegated building low-cost housing to the State government. In turn, the Federal government provided loans. The state government established economic agencies, including Perbadanan Kemajuan Negeri Selangor (PKNS) and the Perbadanan Kemajuan Ekonomi Negeri Perak (PKENP), to assist with the development of the public housing complexes and to oversee and manage the development of low-cost housings in each state. The types of housing built under this Programme were detached or semi-detached houses (mostly made from wood) in rural areas and two-storey terrace houses and flats in urban areas. The Programme managed to build 121,855 housing units across the nation.

During this time, the Malaysian government asked private developers to build low-cost housing. In 1981, they instructed private developers to allocate 30 per cent of their property development for low-cost housing, with a ceiling price of RM25,000 per unit.

 

Market Reform

From 1986 to 1997, the Malaysian government took a step back from developing housing. It promoted private developers to fill in instead, a decision influenced by global trends and urges by international agencies such as the World Bank and International Monetary Fund to scale back on involvements in development and encourage the private sector to provide housing for the people.

This move was also in line with the privatisation trend that began in the mid-80s to the mid-90s. The Fifth Malaysia Plan introduced in 1986 also emphasised the increased role of the private sector, giving it the responsibility to lead the country’s economy with a focus on developing new ventures for wealth creation. Meanwhile, the public sector was to play a supporting role. As a result, the government significantly reduced allocation for low-cost public housing.

However, in 1995, the Malaysian government did introduce a new housing programme for the poor in rural areas. Managed by the Ministry of Rural Development, Program Perumahan Rakyat Termiskin (PPRT) targeted low-income groups with monthly earnings below RM3,000. Interestingly, under the Programme, qualified citizens could receive financing to build their own new house or repair their existing one (RM65,000 for Peninsular and RM68,000 for Sabah & Sarawak). The caveat was that citizens would need to fully or partially own the land they were occupying. This approach eliminated the need for the agency to undertake building works themselves. The programme also included financing for longhouses in Sabah and Sarawak.

It is also worth noting that rural-urban migration continued, with an increasing influx of foreign migrants during this period. This continued migration worsened the existing illegal squatter problem, which became the focus of the country’s next phase of housing policy.

 

Slum Clearance

The Asian Financial Crisis, which hit the region in 1997, resulted in the establishment of the National Economic Action Council (MTEN) to cope with the crisis and recover the country’s economy. Among the initiatives conducted by MTEN was to boost the construction industry while at the same time providing housing for the urban poor, focusing on the slum communities in urban areas. Thus, the government discontinued the old PAKR programme and introduced a new programme in 1998 called Program Perumahan Rakyat (PPR).

The objective of the PPR programme is to provide low-cost housing for all Malaysians with a monthly income below RM2,500. The price for each housing unit is RM30,000 to RM35,000 for Peninsular and RM40,500 for Sabah and Sarawak. The programme consists of an ownership scheme and a rental scheme, with a monthly rental of RM124, which later increased to RM250 per month. The PPR housing development is either 5 to 18 storey flats in the urban area or terrace houses in the suburban areas, with a minimum built-up area of 700 square feet consisting of three bedrooms, a living room, a kitchen, a toilet and a bath. Additionally, the government introduced a computerised Open Registration System (ORS) for potential low-cost house buyers to apply for a unit. Almost 100,000 PPR units have been built across the country, with the majority located in Klang Valley.

The Ministry of Finance alsoprovided low-cost housing, setting up the Syarikat Perumahan Negara Berhad (SPNB). Under SPNB, the Rumah Mesra Rakyat (RMR) was introduced in 2002 to provide low-income housing for landowners such as farmers and fishers, with a monthly income between RM750 to RM3,000. The programme offered single-storey houses with three bedrooms and two bathrooms, with a built-up area ranging from 750 to 1000 square feet.

In addition to this, ‘zero squatter’ programmes were introduced by State governments. In Selangor, for example, the State government introduced the Selangor Zero Squatters 2005 Action Plan, a programme to ensure that by the year 2005, everyone in the entire state would legally own a house. The Action Plan included compiling data on squatters to determine adequate housing provisions, monitoring and tracking developments for timely delivery, ensuring the distribution of housings was efficient and fair, and preventing new squatter settlements through enforcement.
The Government continued the ‘zero squatter’ policy in the Ninth Malaysia Plan (2006-2010), asking the private sector to contribute again. Private developers were required to build more low- and low-medium-cost housing to support and complement the public sector initiatives, with an increased selling price ranging between RM25,000 to RM42,000 per unit. Each unit would have a minimum built-up area of 550 to 600 square feet, comprising two bedrooms, a living room, a kitchen and a bathroom.

 

State Affordable Housing

In 2012, the Malaysian housing policy shifted to focus more on building affordable housing. As a result, the Federal government, State government, as well as the private sector, introduced a few affordable housing programmes targeting middle-income earners with a monthly income between RM3,000 to RM10,000. Among the programmes were the Perumahan Rakyat 1Malaysia (PR1MA), Perumahan Penjawat Awam 1Malaysia (PPA1M), Skim Perumahan Mampu Milik Swasta (MyHome), Rumah Selangorku, Rumah Idaman Rakyat, Rumah Mampu Milik Pulau Pinang, Rumah Mampu Milik Johor, Rumah Mampu Milik Terengganu, Projek Rumah Makmur (Pahang), Rumah Mampu Milik Melaka, Rumah Mampu Milik Negeri Sembilan, and Rumah Perakku.

However, a couple of new programmes still target low-income earners, such as the Rumah Transit 1Malaysia and Rumah Mampu Milik Sarawak (RMMS). Rumah Transit 1Malaysia was introduced in 2014 to provide housing for young, married couples under 30, with a monthly income below RM3,000. Qualified couples can rent the housing units for RM250 per month. RMMS, on the other hand, is a programme by the Sarawak State government to provide housing for low- and middle-income earners in Sarawak, with monthly income between RM650 to RM3,000. In addition, the PPR programme remains with new housing complexes scheduled for completion.

 

Box 1: Malaysia’s Public Housing Timeline
Phases	Timeframe	Relevant Programmes & Policies Economic and Industry specific	Key Features Historical events, Housing Programmes, Organisational Bodies
Post-independence Housing Phase	1957-1970	1st Malaysia Plan	Pre-Independence · Housing Trust Foundation (1956-1965) · Public housing initiatives were implemented by the British but with limited results · 7,431 housing units built   Post- Independence · Ministry of Local Government and Housing set up · Focus on providing low-cost, small size public housing funded by the government   Key Housing Programmes · 1964: Housing Crash Programme
Housing for the Poor	1970-1985	2nd Malaysia Plan: New Economic policy (NEP)	· To eradicate poverty and to restructure society · Implementation of human resettlement concepts in national development · High rate of rural-urban migration · 121,855 public housing units built across the nation · 1981: Beginning of Private Sector involvement in low-cost property development   Key Housing Programmes · 1976: Perumahan Awam Kos Rendah (PAKR) · Perbadanan Kemajuan Negeri Selangor (PKNS) · Perbadanan Kemajuan Ekonomi Negeri Perak (PKENP)
Market Reform	1986-1997	1986 -1990: 5th Malaysia Plan	· To ensure all people regardless of their income live in a decent house · Development of low-medium and low-cost public housing · Larger emphasis on private housing companies on the development of low to medium cost public housing   Key Housing Programmes · 1995: Program Perumahan Rakyat Termiskin (PPRT)
Slum Clearance	1998-2011	Selangor Zero Squatters 2005 Action Plan 2006 – 2010: 9th Malaysia Plan	· Housing for the urban poor, focusing on slum communities in urban areas · ‘State governments introduced zero Squatter’ programmes to ensure that everyone within the state owns a house. · 1997: National Economic Action Council (MTEN) in response to the Asian Financial Crisis   Key Housing Programmes · 1998: Program Perumahan Rakyat (PPR) replaced PAKR · Rumah Mesra Rakyat (RMR)
State Affordable Housing	2012-present	10th Malaysia Plan	· Malaysian housing policy shifts to focus more on building affordable and quality housing for all income groups   Key Housing Programmes: · Perumahan Rakyat 1Malaysia (PR1MA) · Perumahan Penjawat Awam 1Malaysia (PPA1M) · Skim Perumahan Mampu Milik Swasta (MyHome) · Rumah Selangorku · Rumah Idaman Rakyat · Rumah Mampu Milik Pulau Pinang · Rumah Mampu Milik Johor · Rumah Mampu Milik Terengganu · Projek Rumah Makmur (Pahang) · Rumah Mampu Milik Melaka · Rumah Mampu Milik Negeri Sembilan · Rumah Perakku · Rumah Transit 1Malaysia
Source: Jabatan Perumahan Negara. Dasar Perumahan Negara (2018-2025), Aezhad M. Sejarah Polisi Rumah Mampu Milik Di Malaysia 2020, Kementerian Pembangunan Luar Bandar, Abdullah YA, Kuek JN, Hamdan H, Zulkifli LM. Combating squatters in Malaysia: Do we have adequate policies as instrument? 2017 & Laporan Tahunan KPKT 2019.

 

Public Housing Ecosystem – Government & Community-Based Organisations

Given the vulnerability of public housing communities, many government agencies are involved in the public housing ecosystem in Malaysia, namely the Ministry of Housing and Local Government (KPKT), Ministry of National Unity (KPN), Ministry of Home Affairs (KDN) and Ministry of Rural Development (KPLB). These ministries individually work together with the various community-based organisations (CBO) situated within the ecosystem of public and private low-cost housing to protect the welfare of the residents within a community. Figure 1 illustrates the structural relationship between the ministries and the various CBOs, and Table 1 lists down the government agencies as well as the most common organisations that can be found. However, do note that not all organisations are at all housing estates.

 

Government agency	Description
Kementerian Perpaduan Negara (KPN) Ministry of National Unity	A ministry under the Prime Minister Department to promote national unity based on the National Unity Policy (Dasar Perpaduan Negara)
Kementerian Perumahan dan Kerajaan Tempatan (KPKT) Ministry of Housing and Local Government	A ministry leading the prosperity of urban communities and a sustainable environment
Kementerian Dalam Negeri (KDN) Ministry of Home Affairs	A ministry ensuring the security and peace of the country is guaranteed and the well-being of the people is preserved
Kementerian Pembangunan Luar Bandar Malaysia (KPLB) Ministry of Rural Development	A ministry to improve the well-being of rural communities holistically and effectively
Jabatan Perpaduan Negara dan Integrasi Nasional (JPNIN) Department of National Unity and Integration	A department under the Ministry of National Unity focused on enhancing and strengthening the social cohesion of Malaysian society through inclusive integration efforts based on the Federal Constitution and National Principles
Registry of Societies (ROS)	A department under the Ministry of Home Affairs which operates non-governmental organisations and political parties.
Jabatan Kerajaan Tempatan (JKT) Local Government Department	A department under the Ministry of Housing and Local Government to provide expertise and advisory services to Local Authorities in planning and implementing socio-economic development programs in line with the national direction
Pihak Berkuasa Tempatan (PBT) Local Authority	Local Authorities can be divided into the following three categories: 1. City Council/Hall (Majlis/Dewan Bandaraya) 2. City Council (Majlis Perbandaran) 3. District Council (Majlis Daerah)
Community-based Organisations	Description
Majlis Perwakilan Penduduk (MPP) Residents Representative Council	A council set up at the Pihak Berkuasa Tempatan/ Pejabat Pembangunan Persekutuan Negeri/ Jabatan Pembangunan Persekutuan Negeri level to coordinate the JPP journey at every zone.
Majlis Pengurusan Komuniti Kampung (MPKK) Council of Village Community Management	A council that plans and executes the development plans of a village with the participation of the local community using the bottom up approach towards a thriving, prosperous and harmonious village.
Rukun Tetangga (RT) Neighbourhood Watch	A voluntary programme aimed to assist in community development in Malaysia. The establishment focuses on residential areas in the city, suburbs and high-risk areas.
Residents Association (RA) Persatuan Penduduk	A body made up of a group of individuals from the same neighbourhood, and have agreed to manage all community concerns.
Jawatankuasa Perwakilan Penduduk (JPP) Residents Representative Committee	An initiative by the Federal Government to help State Governments and Local Authorities interact directly with residents and bring up any issues to be resolved together.
Program/Pasukan Ikatan Desa (PID)	An organisation set up by the Selangor State Government to ensure the safety in traditional villages.
Pejabat Sekretariat Muafakat Komuniti PPR	A body established at every PPR community to ease the process and build relationships between the community and government agencies, private agencies and NGO.
Joint Management Body (JMB)	A statutory body that is formed to manage and maintain the subdivided building and common property in a strata development. Their jurisdiction would cover private low-cost housing and purchased properties.