Penang considering rent control for George Town

lim-guan-eng

GEORGE TOWN: In an attempt to stop the exodus of Penang’s traditional traders over soaring rent, the state government is considering  imposing rent control on buildings within the core heritage zone of the George Town World Heritage Site.

Chief Minister Lim Guan Eng said the proposed law would be “very similar” to the repealed Rent Control Act 1966.

He said the law, if enacted, would be limited to buildings built before the Second World War or before 1948.

Lim said the initiative would also “put property owners on notice”, as the state mulls a proposed rental hike cap of 25 per cent every five years.

He added two special committees will be formed to discuss the feasibility of the proposed law.

Lim explained that one committee would comprise the state heritage agency and George Town World Heritage Incorporated, which would look into public feedback; while the other committee would comprise state executive councillors Chow Kon Yeow and Jagdeep Singh Deo, who would look into the drafting of the proposed law.

“These are measures we want to take, so that Penang’s heritage can be preserved.

“It is the living cultures we want to preserve, while reducing further gentrification.

“If Penang cannot enact  state laws, then I will propose a private members’ bill in Parliament to the effect,” Lim, who is also Bagan MP, said in a press conference today.

Ever since the World Heritage Site (WHS) status was bestowed by Unesco in 2008, the inner city area has turned from a sleepy hollow full of swiftlet farms, to a thriving tourist destination.

Many of these pre-war properties now fetch between RM3 million and RM10 million, varying from location and size.

Foreigners have snapped up many of these properties, imposing astronomical rent to tenants who are engaged in Penang’s traditional trades, giving them no choice but to exit.

Rent has quadrupled, from a range of RM500 to RM1,000 pre-WHS days, to a staggering RM6,000 to RM10,000 of late.

Under the previous Rent Control Act 1966, owners of buildings dating before January 1948 were restricted from increasing rent.

The premises were then known as “controlled premises” where a “fair rent” was agreed upon between landlord and tenant. Or in other situations, the rent would be determined by a Rent Tribunal, if both parties could not decide on a fair rental amount.

The law also disallows rent to be increased rapidly, unless there is express consent from both parties.

It, however, stipulated cheap rent for tenants of old premises, most of which were businesses in Kuala Lumpur, Penang, Ipoh and Malacca.

However, the Act was subject of criticism, as owners complained poor upkeep of the building, which subsequently led to deterioration.

They also complained the Act made it difficult for them to evict tenants who had purposely allowed their buildings to fall into disrepair.

Building owners also felt that the cheap rent meant less efforts to upgrade buildings.

This led to the repeal of the Act on Sept 1, 1997. There was a transition period of two years before the end date of Dec 31, 1999, when Rent Control was no longer in effect.