Public and Affordable Housing in Numbers

The Penang state government places much emphasis on the development of public and affordable housing, aspiring to make owning a home possible for all households in Penang.

In Figure 1, less than RM1mil was spent for low-cost housing in 2000. The allocation has been on the rise and is estimated to surge significantly to RM13.8mil in 2018, despite a noticeable slowdown in 2008-2009 – likely due to adjustments in the new administration.

Currently, the state government runs two public and affordable housing initiatives: the People’s Housing Project (PPR) and the Affordable Housing Scheme.

Figure 2 shows that there were no new PPR projects after 2006-2007; instead, affordable housing, or rumah mampu milik (RMM), projects emerged in 2008-2009 (Figure 3). The new state government that took office after the 2008 general election changed their housing strategy to focus on encouraging housing ownership for residents in Penang.

Table 1 illustrates the target household income and maximum price of houses corresponding to the type of housing scheme available in Penang.

People’s Housing Project (PPR)

PPR is a public housing project that allows households with a monthly income of less than RM1,500 to rent a state-owned house at a much lower rate. The rental rate for PPR houses ranges from RM56 to RM250.

From Figure 4, we can see that approximately half of the PPR houses are situated in the north-east (Timur Laut, TL) district, whereas only 1% of PPR houses are situated in Seberang Perai Selatan (SPS) and none in the south-west (Barat Daya, BD) district. There exists an apparent imbalance in PPR projects, especially in Penang Island where all PPRs are concentrated in TL, which in fact reflects the second-largest number of households within the RM1,500 household income group in Penang.

The high number of PPR houses in TL is mainly due to the efforts of the MBPP which launched a total of 13 PPR projects from 1952-2000, contributing towards 66% of PPR houses in TL. Conversely, 89% of PPR houses in Seberang Perai are owned by the state government, with MPSP only owning one PPR project in Seberang Perai Tengah (SPT).

Table 2 shows that BD has the least number of households that have a monthly household income of less than RM1,500. Seberang Perai Utara (SPU) has the highest number of households within the RM1,500 income bracket, but only has the third highest number of PPR units. Also, SPS has a total of 3,455 households within the RM1,500 income bracket but only 38 PPR units. With 70% of households within the RM1,500 income bracket staying in Seberang Perai, only half of the total PPR units are situated there. Therefore, Seberang Perai is in need of more PPR projects, especially in SPS.

Looking at the occupancy rate, as of June 2018, most of the PPR units are highly occupied with a rate of 87.1%. Particularly, the units in SPU and TL have been in full use with more than 90% of the units being occupied. The PPR units in SPS, on the other hand, have the lowest occupancy rate of less than 30% as the units are allocated for residents who are going to be affected by the development of the Pulau Burung landfill. On the whole, Bumiputera residents make up the largest composition (57%), followed by Chinese (25%) and Indians (17%) (Table 3).

Affordable Housing Scheme

Figures 5 and Figure 6 show that the numbers of affordable housing units that are under construction and have obtained Occupancy Certificate (OC) are heavily focused on the island. However, when the number of planned units is included, the distribution evens out between the island and the mainland. This shows that the state government is taking efforts to decentralise the construction of affordable housing from the island.

The state government has also placed a lot of emphasis on affordable housing in SPS. SPS currently has the highest number of planned affordable housing (Figures 7 and 8). Taking into consideration the total number of planned units in SPS, the total number of units in SPS will surpass BD, SPT and SPU to become the district with the second highest number of affordable housing. Since Bandar Cassia will become the development focus of the state government in the future, a total of 520 units are being built and another 11,280 units are in the planning stages. Another two state projects, which are still under construction, are being developed by the Penang Development Corporation (PDC), namely Dua Residensi at Teluk Kumbar (694 units) and Jiran Residensi at Butterworth (707 units).

The number of households within the RM3,501-RM6,000 income class is the highest across all districts. This shows that the demand for RMM C1 type should be the highest. It seems that little emphasis has been placed on RMM C prior to 2016-2017 (Figure 3). However, a total of 29,491 RMM C units were planned in 2016-2017, which is a good initiative to cater to the demand for RMM C units.

The planning of housing development should be taken cautiously as building affordable housing units in excess to the demand might contribute to high overhang (completed unsold units) rate in Penang. According to the National Property Information Centre (NAPIC)’s Property Overhang Report, the properties within the affordable price range (less than RM400,000) have a rather high percentage of overhang houses, with about 26% found in low-cost units priced below RM100,000, and nearly 38% found in low-medium cost units priced between RM100,000 and RM400,000, as of Q1 2018 (Table 4).

There is another scheme of public housing known as the Rent-To-Own (RTO) scheme, where residents will rent the houses for 20 to 25 years, and the rental will eventually be considered as instalments paid to purchase the house. However, data on the RTO scheme was not made available at the time of writing. Nonetheless, the state government has recently decided to convert some of its low-cost housing into RTO scheme, which is a good strategy to make low-cost housing more affordable, at the same time reduce the number of overhang units for low-cost and medium-cost affordable units in Penang.1

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