Malaysia Rejects En-Bloc Sale Model to Protect Community Rights in Urban Renewal

Malaysia has taken a firm stance against the en-bloc sale model commonly practised in countries such as Singapore, Hong Kong and Australia, choosing instead a people-first redevelopment framework designed to prevent forced relocation, gentrification and loss of community identity.

PLANMalaysia’s deputy director general (development), Saidin Lateh, confirmed that the long-awaited Urban Renewal Bill adopts a fundamentally different philosophy from its international counterparts. Rather than allowing owners to collectively sell their properties and relocate, the Bill guarantees the right of every owner to return to a newly upgraded home within the same neighbourhood — at absolutely no cost.

This major policy decision marks a turning point in Malaysia’s approach to urban regeneration, signalling a strong commitment to community continuity, social justice and resident empowerment.

Why Malaysia Rejects the En-Bloc Model

Saidin explained that the en-bloc approach often leads to permanent displacement of original communities, with lower-income residents priced out of redeveloped neighbourhoods.

Under the en-bloc model:

• Once 80–90% agree to sell,

• A tender is opened,

• A developer buys the land,

• Residents receive compensation,

• And communities are permanently relocated.

This, Saidin said, is incompatible with Malaysia’s goals.

“We will not adopt en-bloc sales. Malaysia takes a different approach. We guarantee residents the right to return and continue living in the same area after redevelopment,”
— Saidin Lateh, PLANMalaysia

The Urban Renewal Bill aims to ensure that redevelopment uplifts living conditions without uprooting long-standing communities — especially in older urban areas long plagued by aging buildings, safety issues and poor amenities.

The 80% Consent Threshold: What It Really Means

One of the most significant mechanisms in the Bill is the 80% consent requirement, but Malaysia’s interpretation differs greatly from en-bloc countries.

In Malaysia: 80% consent does NOT authorise demolition or clearance.

Instead, it only allows:

• Technical assessments

• Feasibility studies

• Planning model preparation

Actual implementation continues to require continuous negotiation, meaning residents retain strong influence over project outcomes.

Saidin emphasised that full 100% consent is unrealistic due to:

• Untraceable or deceased owners

• Inheritance complications

• Owners residing overseas

• Property caveats and legal disputes

However, he stressed that majority consent must be respected.

“If 95 owners agree but five disagree, it would be unfair to disregard the majority who have endured substandard living conditions for decades.”

This balanced approach ensures no single party can block redevelopment indefinitely, while still maintaining safeguards against abuse.

Stronger Protections for Owners: What the Urban Renewal Bill Guarantees

Malaysia’s Urban Renewal Bill provides one of the strongest protection frameworks for property owners among developing nations.

Owners Are Guaranteed:

1. A free replacement home

• Larger than their original unit

• Higher-quality construction

• Improved facilities and safety standards

• No top-up payment required

2. Free temporary relocation

• Moving cost covered

• Temporary rental fully funded

• Early maintenance costs absorbed by the developer

3. Guaranteed right to return

Residents can move back into the new development at no charge.

4. Fair compensation options

Owners who prefer not to return will receive market-value cash compensation.

These protections directly counter common gentrification outcomes seen internationally.

A Firm Stance Against Gentrification

Saidin highlighted that Malaysia is determined to avoid displacement and demographic disruption. The Bill requires developers to preserve the original racial and social composition of the neighbourhood.

“We will not allow gentrification. The Bill preserves demographic composition, protecting Malay, Chinese and Indian communities alike.”

To further reassure communities — particularly Malay-majority neighbourhoods — the government will prioritise:

• Government-linked companies (GLCs)

• Government-linked investment companies (GLICs)

• State-owned companies

• UDA Holdings Berhad

• MARA

These entities are viewed as more trustworthy custodians of public interest compared to private developers operating solely for profit.

State Governments Hold the Key

Before an area qualifies for urban renewal, it must be:

1. Officially declared by the state government

2. Evaluated through technical studies

3. Undergo further negotiation

4. Subject to a community-first development model

This ensures decentralised control and allows each state to tailor renewal strategies based on local priorities.

A More Modern, Transparent and Community-Centred Future for Malaysia’s Cities

The Urban Renewal Bill is part of the broader national push toward:

• Modernising city infrastructure

• Upgrading aging housing schemes

• Preventing urban decline

• Enhancing safety and liveability in older areas

Saidin noted that the Bill reflects a shift from reactive to proactive urban management, protecting both people and property values in the long term.

The Bill is expected to be tabled again in Parliament next month, marking a crucial milestone in Malaysia’s transformation into a more equitable, transparent and resilient urban nation.