20180614 What is ‘Low Cost Housing’?

20180614 (Thu)

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.




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