From 87 units per acre density to 128 units per acre!

52
2010

I am not sure what is going on here. The state government has announced that the “87 units per acre guideline, after deliberation with all stakeholders, will be replaced by a new guideline of 128 units per acre, whereby the units developed under this guideline cannot be less than 900 square feet and cannot be priced less than RM400,000…”

Before it was increased to 87 units per acre in 2010, the upper limit was 30 units per acre. 

Apparently, this 87 units per acre was initially supposed to be only for transit-oriented development nodes, but before long, developers started applying for the maximum 87 units, no matter where. 

So now we are seeing more than a four-fold increase in density in the space of six years! Imagine the wonders that will do for the charm of Penang.

Some questions:

  • On what basis is this higher density being allowed? When was it approved and by whom?
  • When the earlier density was increased to 87 units per acre, we were told that this would enable developers to build more affordable housing. Now, the density is being increased to 128 units per acre, but units cannot be priced less than RM400,000? We are told that these poor developers apparently find it difficult to sell bigger homes under the 87 units per acre ‘guideline’ (a 1,400sq ft unit can be priced at more than RM900,000 in some cases). So a higher density is being allowed as the higher the density, the smaller the unit size (huh?) and the smaller the unit the cheaper the price (yeah, right). But where does it say that the unit size will be smaller? What is stopping the developers from selling smaller homes as it is?
  • Do many of the big developers deserve this? It is not as if many of them have been building homes that most ordinary Penangites can afford. Isn’t there a glut of homes priced above RM500,000 now?
  • Who are these “all stakeholders” that the state government has consulted with? Does it include ordinary Penangites on the street? Civil society groups?
  • Interesting that the congestion on the streets is being attributed to “our successes” rather than to the poor and arbitrary planning “guidelines” that have allowed higher densities than what the roads on the island can cope with. (This is the same logic that attributes higher tourist arrivals at the Penang Airport to Penang’s success, when a lot of this increase has to do with the expansion in the budget airlines industry – leaving aside the impact of all that air travel on climate change, which alarmingly, few are bothered about.)
  • In the absence of the missing-in-action Penang Island Local Plan, does this new higher density “guideline” carry any legal weight in the first place? Isn’t 128 units per acre well above what is allowed under the Penang Structure Plan, which is gazetted and carries the full weight of the law unlike a mere “guideline”?
  • Since it appears that densities can be changed just like that, why not allow 250 units per acre or 500 units per acre? That should make the developers even happier… never mind ordinary Penangites.
  • Why is the Penang Island Local Plan being delayed even though it was approved by the MPPP in 2008? What is holding back a public display of the approved draft of the Local Plan for feedback? So that densities can be changed just like that?
READ MORE:  What is the maximum density allowed in Penang now?

SPEECH BY YAB CHIEF MINISTER OF PENANG AT REHDA 42nd ANNUAL DINNER ON 24TH OCTOBER 2016 AT G HOTEL

I wish to congratulate the organizing committee for the excellent manner in organizing REHDA’s 42nd Annual Dinner Celebration.

2. We are aware of the current unfavourable economic situation and the state government is working closely with REHDA to resolve the challenges faced by the industry whereby a series of meetings together with other stakeholders have been held by EXCO for Town & Country Planning and Housing to consider all views put forward. Towards this end, the following has been achieved in order to cushion the unfavourable economic impact upon developers:

(a) First, the use of corporate guarantees to replace bank guarantees given by developers for various contributions and charges, which has been extended from previously contributions of: (i) rezoning land value increase; (ii) additional density / plot ratio; (iii) contribution in-lieu of physical development of low and low medium cost housing and (iv) contribution of the North Coast Road development under MBPP, now to all other contributions whereby the total sum is more RM500,000.00;

(b) Secondly, the 87 units per acre guideline after deliberation with all stakeholders, will be replaced by a new guideline of 128 units per acre, whereby the units developed under this guideline cannot be less than 900 square feet and cannot be priced less than RM400,000.00, and further the development charges for the 20% affordable housing units under this guideline are to be standardized at RM5.00 per square feet as well;

(c) Thirdly, the financial contribution for several facilities not physically surrendered such as hawker stalls is being reviewed whereby we are considering placing the same on a fixed rate rather than market rate;

READ MORE:  Ludicrous for developers to be money lenders

(d) Fourth, to allow flexibility for developments in the North East District to build their affordable housing units under the compliance quota in all development guidelines outside of the North East District, up until the southern part of the island at Teluk Kumbar.

3. The state government is aware of escalating property prices in Penang and has initiated pro-active steps to provide quality housing at affordable prices. The Penang State Government is actively pursuing the challenge of providing affordable housing which will be overcome when 26,255 homes are built over the next 5-7 years with another similar number to be built by the private sector. I strongly urge all REHDA members to further develop the housing industry as well as to implement affordable and social housing programmes as it contributes to nation building and betterment of life for the people of Penang.

4. Making Penang a world class international and intelligent city is not impossible. Penang has garnered numerous international accolades; for example, hitting No. 4 in Lonely Planet’s Top 10 Cities list for Best in Travel 2016 and No. 6 in CNN Money’s Top Places to Retire in 2016. Recently, Penang has added another new feather to its cap by clinching the number 2 spot as “Top 10 best places in the world to retire” by travel magazine Conde Nast Traveller. Our tourist arrivals have increased every year until the Penang International Airport has already reached the maximum capacity of 6.5 million passengers 4 years ahead of the scheduled 2020.

5. The practice of good and clean governance in Penang has helped Penang become an attractive state for financial investments. In the recent report, Malaysia Commercial Real Estate Investment Sentiment Survey 2016 produced by Knight Frank, Penang is the most attractive region for commercial property investment in Malaysia. In the survey of more than 700 fund managers, property developers and lenders, KL was No.2 with 56% confidence whilst Penang drew 67% of the votes overall.

6. Our vision is to transform Penang into an international and intelligent city. Over the last few years, the Penang State Government’s good governance and clean leadership, has aggressively promoted Penang as a location of choice for investors, a destination of choice for tourists and a habitat of choice for residents who desire sustainable living. From 2007-2015 onwards,

READ MORE:  Save Pulau Jerejak from 'redevelopment' #SaveJerejak

· Penang has recorded annual budget surpluses with accumulated surpluses of RM574 million over the last 8 years of 2008-2015, more than the accumulated surpluses under BN over the last 50 years from 1957-2007 of RM373 million. In other words we did betterin 8 years than the previous government did in 50 years!

· Penang’s asset reserves have nearly doubled over the 8 year period from RM850 million to RM1.6 billion.

· For the comparative 8-year period from 2008-15 compared to 2000-7, Penang’s manufacturing investment increased by 87% to RM54.9 billion from RM24.9 billion, with job creation increased by 17 % to 128,317 job opportunities from 106,583. Unemployment rate is at a low of 1.6% creating a shortage of 20,000 workers.

· Penang’s state’s debts has been reduced by 90% over the same period and at RM69 million by end 2015, is the lowest in the country. This RM69 million debt compares with the total RM16.8 billion of debts owed by all 13 states, with Pahang owing the most at RM2.9 billion, followed by Sabah RM2.6 billion, Sarawak RM2.5 billion, Kedah RM2.3 billion and Kelantan RM1.3 billion.

7. Our successes have created traffic congestion which the state government hopes to overcome under the RN27 billion Penang Transport Master Plan(TMP) combining rail, roads, air and water. We are awaiting Federal government approval.

8. Malaysia and Penang face many challenges due to the economic slowdown caused by imposition of GST and depreciation of the ringgit. Unfortunately, the 2017 Budget does not offer anything new to save our economy, especially to the construction industry. At a time of economic downturn, government projects are important to stimulate the economy. There is no reason why the Federal government cannot grant approval to the TMP, when it can add 0.5% to the country’s GNP.

9. I would like to take this opportunity to congratulate REHDA for taking the lead in assisting the less fortunate inmates from charitable homes through their Corporate Social Responsibility (CSR) initiatives. I strongly urge all developers and associates present here this evening to inculcate a CSR culture in all your companies. It has been demonstrated that it is possible to be profitable while also being socially and environmentally responsible.

In conclusion, I would once again want to thank REHDA for your invitation and your effort in working closely together with the State Government to develop Penang.

Thank you

LIM GUAN ENG

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.

52 COMMENTS

  1. Higher density, more state development fund for LGE (admin). Imagine RM100-200k per unit built has to go to state gov. In the end, (the admin) is robbing Penangites to pay for state development.

  2. something is off with this new guideline. the affordable component is still being satisfied as per previous guideline despite change in bracket. but the minimum floor area and price is what bedazzles me. 900 sqft and RM400,000 works out to be RM444.44. Remember this is the minimum. Developers can built a 900 sqft unit and sell it at RM600,000 ie RM600 psf which is a norm now on penang island. So, it doesn’t motivate developers to provide more affordable housing at all. who wants to price their homes at RM444.44 psf? what is the intention behind this new guideline?

    • The CAT guideline is for show to show how ‘caring’ it is for affordable, but the figures speaks for themselves – the unrealistic affordable housing is a sandiwara which don’t fully meet the realities of Penangite household incomes.
      This CAT has no political will & social empathy to buat serupa cakap 308.
      The same for flood mitigation which if it truly cares, would have had solve most if not all of the recent floods.
      The same with the 250 ft guideline for hill development which it can play-play at will.
      We will see comes GE.

  3. If RM400K for 1K sqr ft home is deemed affordable, then better move to the mainland Penang for a more viable option.

    Do not forget Penang Sentral at Prai will make connectivity to Penang island easier in time to come, assuming the frequency of ferry service can be improved.

  4. Expect to pay high price if you live in big cities like Penang, KL and JB. Suggest trying out low cost options in Prai or Sungai Petani, where cost of living also lower with less traffic congestion. Retirees should take note as Penang island is getting expensive, regardless of Pakatan Cat or BN Gerakan.

    • somehow Penang-lang die die must live on the island, what we call sentimentalism. Only the adventurous ones seek greener pasture on mainland to find blissful living away from high rise concrete and carbon monoxide stress.

      • I think those Penangites who are frustrated by the woes brought by progress should seriously uproot from the island and migrate to the mainland. no point complaining because cannot adjust to modern living of heavy traffic congestion and high density living when the mainland option is available at a far affordable cost of living, like traveling back in time to old style living.

      • Strong attachment to the island for many having grown up there, but have to pay high premium to stay put. But slowly but surely it makes more economic sense for many especially the B40 to move to mainland if wages not improving. M40 may opt for mainland for more idyllic life after retirement to stretch their savings to the fullest.

    • pg lang wants everything and care for themselves. look at yankees and ozzies. they live in blocks of land with backyard for bbq. try this in penang? pg hill will be gone. whatever land will be dedicated to roads, low ways and car parks. drivers who cares about rights of pedestrians. rip off the foot paths for more cars. public transport you need to look at hong kong and singland. living in compact feel more concern for environ than spaceous land taken for granted.

    • Cost spiralling effect starts from (spiralling from left >(to) right):
      Speculative land purchasing @ surreal prices > speculative hi-end housing construction to sell @ ‘cartel’ super-high prices > speculative property binges like nobody’s business > speculative bulk buying of prewar houses @ Sing-Dollared dizzy offers > higher market rentals (across the board) going speculatively higher + inflated @200-500% in short span of 3 yrs > local businesses increase goods & services or ‘chap lap’ > PM calling everyone to makan Nasi Lemak > otak udang sembayang Tokong calling for mass migration to mainland as far as SP (Kedah’s territory) > social engineering @ future’s heavy costs to Penang’s potentials in terms of loss of local talents, enterprising ideas, UBAH? hope & promising Penang Kia businesses to Kedah’s gain.
      Time for Kopi-O kau kau.

    • spectulative. if win or gain they laugh if lose you can also laugh but their pockets burnt or bing. the karma says 50~50 chances like tossing coin. karma also says no iron bowl. middle and lower middle reduce the paperman’s income. mas sack thousands of workers.kopi kau kau can stimulate and also cause addiction

  5. if 128 units, then good for kopi tiams and hokkien mee shops. in fact any shop wil be happy. throw in school, market, playing field, we need public transport to work. maybe we will desert anil’s blog. we walk across to buddy’s place or warung for under table talk. even friends staying in 82units will come over to socialise instead a under table key board coward.
    in sydney a few die and went unnotice for months. you love it?

    • zoro dont fear death. when it comes, the soul leaves elsewhere while the body decomposes back to the nature for the worms.

      • you want to live close to one who died next door where no knows there is a dead corpse sitting on a chair for months? even the gomen social security does not know. if less dense, muggers and house breakers are king of the world with mata find easy and safe job catching politicians.

  6. 87units/ac everyone rides his cars with 2 or 3 cars per unit and requires expressway and make anil madder
    128 units/ac everyone take public transport with 1 car per unit. anil is more happy and can see his favourite tram

    low density= more land is required and distance to far lim for kopi kau kau or hokkien mee requires further distance to travel.
    so why complain?less burning of fossil, less hill clearing, less gobal warming, less sea rise and save the world.

    who are the real hypocrites and double standards?

    • 2-3 cars per household regardless whether rich or poor so the roads will be choked with cars and the air will be filled with CO in the near future in that area.

  7. Anil
    In your pic the distance between 2 blocks is so close, so be careful of voyerism snooping on you.
    Better invest in good curtains to block views !

  8. Where is the logic in this???

    By increasing density from 87 to 128 per acre, the profits for developers will already increase. And yet they set a MINIMUM price of 400k, where many already cannot afford??

    What is the logic in this??

    • Haven’t you heard of you scratched my back and I scratched yours?

      Imagine 1 unit 20,000 at the rakyat’s expense. It is not too wrong to say (certain people) had acquired hundreds of millions this way!

      Do we have a choice? A corrupt PH under an allegedly corrupt CM or a hopelessly corrupt BN?

      • 3rd force in PCM? My toes are laughing out loud!
        Whatever party you choose, do not expect cheaper housing.

      • ‘I help you, you help me’ is the political mantra in Malaysia.
        Know-how is less important than Know-who to get the Kang-Tao.

      • So, why waste so much saliva on that night of 308???
        Might as well sell kang tao comes ceramic GE14!

    • no need logic when land is scarce in Penang.
      but many are frustrated because cannot afford.
      better upgrade skills to undertake higher pay jobs.
      young penangites better take my advice unless your father is rich.

      • paparich cannot sustain youngsters lusting after lifestyle home, fanciful cars and expensive dates.

        younger penangites mostly lack entrepreneur spirits as born in comfort zone not willing to ake risks.

      • too bad the young people prefer to spend hard earned (or parents’ hard earned) money on cars and car accessories, instead of investing on assets like housing that could appreciate. Do not give excuse that public transportation is unreliable, if you have the patience and can learn the timing of bus arrivals.

      • If only more people can give RapidPenang a try, and not jump straight to car ownership.

      • So, shouldn’t there be any logic why CAT decides to bring back Rent Control?
        Only after the fact of speculative buying by SingLanders of 200 plus properties in George Town causing surreally high rental & surreal property price hikes.
        Frustrated with CAT is also no logic mah!
        So, is CAT logic, pls tell me.

  9. Haiyah, just look at the very high density in Relau/Sg Ara area, it’s scary !
    It seems some agricultural lands are also allowed to built condos mann… sinking, sinking and stinking !

    • Relau and Bayan Baru will get more congested in time to come when Hunza in ‘redeveloping’ the Malay kampung land with mixed development. Junta is learning fast from Ideal and Ivory.

  10. LGE has no stake in Pg…a Melaka boy who will soon move to KL either after the coming election or before it should he be convicted & send to jail for his extraordinary discount he got.

    • Is it true he will move to KL or Melaka? If that is true, good riddance to bad rubbish.

      This is another forked tongue politician and he is no better than those in UMNO!

      I have been reading Mr. Anil’s blog for years and I have been following KM Pakatan, truly bikin tak serupa cakap. He fast becoming like Najeeb, where in his words and actions had he cared for Penangnites?

      • Sea tunnel can dream day & night & push for by all means, but flood mitigation cannot push for completion.
        Have to wait after the fact of more flooding to blame the Feds for no money forthcoming again!
        If CAT has the political will, this flooding problem may not have happened by now.

    • For the comparative 8-year period from 2008-15 compared to 2000-7, Penang’s manufacturing investment increased by 87% to RM54.9 billion from RM24.9 billion, with job creation increased by 17 % to 128,317 job opportunities from 106,583. Unemployment rate for Penang is one of the lowest in the country at 1.6% creating a shortage of 20,000 workers.

      Penang’s asset reserves have nearly doubled over the 8 year period from RM850 million to RM1.6 billion. Penang’s state’s debts has been reduced by 90% over the same period and at RM69 million by end 2015, is the lowest in the country. This RM69 million debt compares with the total RM16.8 billion of debts owed by all 13 states, with Pahang owing the most at RM2.9 billion, followed by Sabah RM2.6 billion, Sarawak RM2.5 billion, Kedah RM2.3 billion and Kelantan RM1.3 billion.

  11. Simple as that – You help me (in times of property downturn), I help you (fulfil TMP).
    You scratch my back (increase of density to 128 units per acre + cannot be less than 900 square feet and cannot be priced less than RM400,000), I will scratch yours (guarantee no abandonment but fulfilment of all TMP’s Satu Lagi Projek CAT).
    Not simple as that – they don’t care if a property bust (from unsaleable excess supply & abandoned projects) is potentially coming our way in 3-5 yrs time judging from local market sentiments & dire straits of some developers. By then, any Absolute Vodka Developer guarantee + financial ability for TMP project fulfilment? You don’t need a cat’s brain to figure that out.

    Already, many Penangites cannot apply for a bank loan even for unrealistically priced properties (above 250K), what’s there any hope for selling 400K homes in Penang except to speculators?
    Might as well wake up to build more affordable homes of 700 s.f. to meet realistic market demand of the 99% Penangites.

    As an accountant, you better figure it out.
    More so dealing with towel-squeezing cartel-behaviour developers.

    Now, where is the Penang Local Plan (in hiding) to justify the 128 units density @ RM400K price tag for a 999 s.f. home?

    Your Survival Choice: Nasi Lemak or 400K home?

  12. If we assume 1,000sqft per unit, and 70% efficiency ratio, this works out to be a plot ratio of 4.2. Not too excessive

  13. Mainland Penang n SP awaiting those who appreciates more open space living environment.
    Peter can share more?

LEAVE A REPLY

Please enter your comment!
Please enter your name here