Penang to buy unsold low-cost units for low-income group

GEORGE TOWN: In what is seen as an unprecedented move, the Penang government says it plans to buy up unsold low-cost housing units in the state for the purpose of leasing them out to low-income families.

To kick off this initiative, it will buy 50 low-cost units in Simpang Ampat, Seberang Perai Selatan (SPS), and gauge the response first before embarking on more such projects in the future.

State Local Government, Traffic Management and Flood Mitigation committee chairman Chow Kon Yeow said the state government plans to lease out the RM25,000 single-storey, terraced houses to the low-income group.

“We will see how this goes first before we decide to buy more units from developers who cannot sell their low-cost units.

“We decided to purchase 50 low-cost units from one developer in Simpang Ampat who could not sell the units because of the disproportion of low-income groups in that district,” he said.

Asked about low-cost units in other parts of the state including Seberang Perai Utara, Seberang Perai Tengah and Northeast District, Chow said there were none available there as they have a smaller number of people in the low-income category.

He said housing developers are obligated to allocate 30% of their developments to low-cost units under the law and it is the unsold units in these projects that the state government intends to acquire.

Chow was speaking after witnessing a signing ceremony between the Penang Development Corp (PDC) and Zubicon Sdn Bhd to build 1,900 affordable housing units at Jalan S P Chelliah here.

The project comprises medium and low medium cost apartment units, priced at between RM72,500 and RM400,000 with floor space ranging from 700 sq ft to 1,000 sq ft.

Chow said RM50 million proceeds from sales from the project, to be built on 11.04 acres of land belonging to Penang Island Municipal Council (MPPP), would be channelled back to the local council.

“Since MPPP is the landowner, RM50 million of the property sales will go to them. The rest will be taken by Zubicon which is not charging the state a single sen,” he said.

MPPP has appointed PDC as its project administrator. Zubicon was selected to develop the land after its submission in the open competitive tender was picked as the best bid for the RM500 million project early this year.

This project is one of  seven affordable housing schemes in the state, comprising three on the island and five on the mainland, Chow said, adding that work will begin in May or June next year.

A total of 19,093 units will be built, with Batu Kawan housing the highest number at 11,800 units that would be constructed over a period of 10 years.

The other project sites are Teluk Kumbar (696 units) and Jelutong (556 units) on the island, and Kampung Jawa (707 units), Ampang Jajar (1,634 units), off Jalan Berapit (1,000 units) and Bukit Juru (800 units) on the mainland.

“Penang’s commitment to ensuring the projects progress smoothly as planned is backed by our Affordable Home Fund which has RM500 million, the biggest compared to other states.

“It was set up last year and is managed by Chief Minister Inc (CMI) with PDC as the implementing agency,” he said, adding that the Jalan S P Chelliah project would not receive any allocation from the fund.

The green building index (GBI) “gold class” status project includes RM25 million worth of facilities and communal infrastructure such as a pavilion, linear park, riverfront point, ‘big tree’ skyway and bus terminal.


For more stories, go to, the website for freedom of expression and fairness in articulation.


This article first appeared in The Edge Financial Daily, on November 27, 2013.


Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.