Introduction
Urban renewal has become an increasingly important policy agenda in Malaysia as the nation grapples with the challenges of aging buildings, abandoned projects, and declining urban spaces.
The Urban Renewal Bill 2025, tabled for its first reading in the Dewan Rakyat on 21 August 2025, represents a significant legislative milestone. It introduces a comprehensive legal framework to regulate, supervise, and implement urban renewal initiatives across Peninsular Malaysia and Labuan. The Bill not only aims to facilitate redevelopment and regeneration of urban areas, but also seeks to safeguard the rights of landowners, occupiers, and other stakeholders, while striking a balance between developmental imperatives and property rights.
Objectives of the Bill
According to Plan Malaysia and Town and Country Planning Director-General, Datuk TPr Dr Alias bin Rameli, the Bill “seeks to rejuvenate existing urban areas, making them more livable while enabling residents to work and commute more conveniently using public transport such as MRT and LRT” (Bernama, 2025).
Key Provisions of the Bill
The Bill introduces several important provisions that collectively establish a legal framework for the planning, regulation, and execution of urban renewal projects. These provisions aim to streamline processes, safeguard rights, and ensure transparency in redevelopment initiatives.
(a) Consent Threshold
Section 19(1)(b) of the Bill prescribes that where an urban renewal project is carried out :
(i) for a building which is 30 years of or less, the consent threshold shall be 80%;
(ii) for a building which is more than 30 years, the consent threshold shall be 75%;
(iii) for an abandoned building, the consent threshold shall be 51%; and
(iv) for a building which a visual inspection report has been issued by a Professional Engineer with Practising Certificate under paragraph 17(c), the consent threshold shall be 51%.
Section 19(2) provides that the calculation of years of a building shall be determined from the date of issuance of certificate of fitness for occupation or certificate of completion and compliance under the Street, Drainage and Building Act 1974. This consent mechanism reflects an attempt to balance collective urban redevelopment needs with individual rights to property ownership — a tension that has been at the heart of urban renewal efforts in many jurisdictions worldwide. Prior to the introduction of this Bill, under Section 57 of the Strata Titles Act 1985, a residential building, regardless of its severely neglected or dilapidated condition could not be redeveloped or rebuilt without obtaining unanimous consent from all strata/unit owners.
(b) Compensation and Safeguards
The Bill seeks to ensure that while urban regeneration serves the public interest, individual rights are not unfairly compromised. Pursuant to Section 24 of the Bill, property owners who agree to participate in an urban renewal project shall be entitled to :
(i) receive an offer of benefits that are not less favourable than those offered prior to the commencement of the project;
(ii) the right to remain within the urban renewal area unless he or she chooses otherwise; and
(iii) be informed of the progress of the urban renewal project upon request.
Key Concerns Regarding The Bill
(a) Ambiguity in Compensation Standards
Section 24 of the Bill provides for compensation not less favourable than those offered prior to the redevelopment, but does not set out clear criteria. Owners fear compensation may not be sufficient to secure a replacement home of equivalent size, location, or value.
(b) Minority Landowners’ Rights
In other jurisdictions, urban renewal or redevelopment laws typically require higher consent thresholds from property owners as safeguards against coercion to ensure that minority owners are not unfairly compelled into redevelopment agreements. Under the Bill, the consent threshold is set relatively low and lacks robust protective measures for minority landowners. This creates a risk that the owners may feel pressured to agree to redevelopment plans that do not align with their interests. Such a scenario raises potential constitutional concerns under Article 13 of the Federal Constitution, which guarantees the right to property.
Furthermore, it is not expressly clear whether non-consenting owners will be entitled to the same compensation and benefits as consenting owners. Another pressing concern is the risk of eviction among non-consenting owners, as the Bill does not explicitly state what happens if they continue to disagree. Will they be evicted once majority consent is obtained? If so, under what legal process and safeguards? The absence of clarity creates significant uncertainty among property owners.
Comparative Insights
In other jurisdictions such as Singapore (≥90%), Australia (Victoria & NSW: 75–90%), and the United Kingdom (ministerial approval required, effectively a supermajority), urban renewal laws typically combine high consent thresholds with safeguards — such as fair compensation, appeal rights, and dispute resolution mechanisms — to protect minority landowners from coercion. By contrast, Malaysia;s proposed Urban Renewal Bill sets a relatively low consent threshold and provides limited protections to dissenting owners.
Conclusion
The Urban Renewal Bill is a timely initiative to address Malaysia’s aging buildings and spur redevelopment. However, its relatively low consent thresholds risk undermining minority landowners’ rights and may raise constitutional concerns. Stronger safeguards—such as higher consent thresholds, clearer compensation standards, and safeguards for non-consenting owners — are necessary to ensure that urban renewal proceeds fairly while protecting the rights of all property owners.