What is “Low Cost Housing”?
Low-cost housing in Malaysia is also seen as a mandatory section of housing development. Any housing developers must provide 30% of their total housing development for low-cost housing since 1982.
All buyers intended to purchase low cost housing in Malaysia is required to register in the Computerized Open Registration System (ORS) introduced by the government since 1997 to check the eligibility. This not only applied to the government projects but also houses built by the private housing developers.
In this programme, low cost housing is a ceiling price of RM25,000 per unit regardless of projects location. It was targeted for people with household income less than RM750 per month. Three ideological justifications were officially given by government as follows:-
a) Government recognition that the private sector housing industry has attained maturity and that it has the efficiency, capability and capacity to be dominant producers of adequate and affordable homes for the community.
b) To achieve economic of scale, the private sector should be able to come up with more innovative designs and technologies.
c) Private sector participation would allay any accusation of the government posing unfair competition through its own involvement in housing.
In June 1998, the federal government introduced the new policy for low cost housing. This revision was based on the study conducted by the Ministry of Housing and Local Government Malaysia in 1998 after considering the increased construction and land cost. The guideline also includes regulation to stop low cost house buyers from selling the house within 10 years after purchase. Nevertheless, the 30% low cost houses quota in every housing development projects still remained.
Within 35 years period (1971 to 2005) a total of 1,047,861 units of low cost house were built by public and private sectors in Malaysia. Nevertheless, the figure only represents 55% from the total target. Thus, the achievement of public and private sector in low income housing provision in Malaysia still not satisfactory despite numerous programs initiated by government and regulations imposed to private sector to build low cost houses.
LOW INCOME HOUSING PROVISION IN MALAYSIA: THE ROLE OF STATE AND MARKET By Syafiee Shuid available at