Penang Housing Committee chairman Jagdeep Singh Deo, however, said the state government aimed to cool soaring rentals through regulations.
Last July, the Penang government announced it may reintroduce the Rent Control Act 1966.
This was apparently an attempt to stop traditional trades from leaving George Town’s inner city due to soaring rent.
Rent in George Town’s World Heritage Site (WHS) has gone up from RM500-RM1,000 pre-WHS days to a staggering RM6,000-RM10,000 or more today.
Jagdeep said a proposal to limit how high the rent could go, through a percentage mechanism, was being considered.
“This would curtail abnormal hikes — like from RM800 to RM5,000. That is a big leap and these regulations or guidelines would prevent that from happening.
“But normal small increases in rent are inevitable and are beyond our control,” Jagdeep told reporters today.
“We are coming up with alternative measures instead of imposing rent control.
“From our discussions with stakeholders, most want regulations and guidelines instead of a broader rent control system.”
Jagdeep spoke to reporters after opening the Penang International Property Conference at the Gurney Paragon Mall today.
Jagdeep also quashed claims that owners of George Town’s heritage properties were charging high rentals, saying there was only a handful of such cases among the 5,368 buildings in the World Heritage Site.
He said cases of high rent were prevalent only outside of George Town.
However, Jagdeep said a state agency had been tasked with checking out these complaints of high rent in the heritage site.
“They’ve been requested to come up with data to ascertain if the complaints of high rental hikes are accurate. The study began in December.”
Many of these pre-war properties in George Town’s World Heritage Site are presently priced between RM3 million and RM10 million, varying in location and size.
Foreigners have snapped up many of these properties, imposing astronomical rents on tenants who are engaged in Penang’s traditional trades, giving them no choice but to move out.
In the previous 1966 Rent Control Act, owners of buildings dating before January 1948 were restricted from raising the rent on their tenants.
The premises were then known as “controlled premises” where a “fair rent” was agreed upon between landlord and tenant. In other situations, the rent would be determined by a Rent Tribunal, if both parties could not decide on a fair rent.
The law also disallowed rent to be increased speedily, unless there was express consent from both parties.
The law allowed cheap rent for tenants of old premises, most of which were businesses in Kuala Lumpur, Penang, Ipoh and Malacca.
The disadvantage was that the low rents discouraged house owners from carrying out repairs, making the buildings fall into disuse.