No significant rental spike to warrant rent control act, says Penang exco says

By Opalyn Mok
Tourists walking around the World Heritage site during the George Town Festival August 21, 2014. — Picture by KE Ooi

GEORGE TOWN, March 10 — While early statistics indicate there were increases in rental rates in the world heritage zone, there were no abnormal spikes to warrant a rent regulation act, said state executive councillor Jagdeep Singh Deo.

He said the preliminary data has shown that there may be one or two cases of abnormal rental hikes but it was not a trend for all properties within the heritage zone.

“At the last meeting, in February, from what statistics we have, it (the high rental spike) didn’t look like very significant,” he told reporters after delivering his speech at the Penang International Property (PIP) Conference here.

He said based on the statistics they have now, the proposed rent regulation act most likely will not be introduced.

While he admitted that there may be some rental increases which is normal under any circumstances, he said there were very few significant jumps such as from RM800 to RM5,000 as claimed by some quarters.

Jagdeep said George Town World Heritage Incorporated (GTWHI) was tasked with conducting a survey of all the 5,326 units of buildings within the George Town Heritage core and buffer zone.

“They’ve been requested to come up with data to ascertain if the complaint of high rental hikes is accurate and the study started in December last year,” he said.

Jagdeep said he was shown the preliminary data in the second meeting in February and that they will be meeting again in April, hopefully with the full data on this issue at hand.

He also pointed out that the data has shown that the rental increases within the heritage zone were not as high as those outside the zone.

“Outside the core and buffer zone, we find the rental increases are much worse so this is not a problem only within the heritage zone,” he said.

He added that it was the general concession of all stakeholders, including Penang Institute and Think City, that introducing a rent control act will not resolve the rent increase issue, even if there is such a problem.

“They said it won’t address the issue of rental increase but there are other means to.

“We’ve been briefed on that and if the rent control act does not go through, it is likely that other measures will be introduced to address this problem,” he said.

The Penang state government had proposed introducing a rent regulation act to ensure that it did not increase at an alarming rate of between 200 and 400 per cent.

Jagdeep stressed that it was not similar to the now repealed Rent Control Act 1966 that had previously restricted the increase of rent for buildings built before 1948.

The Rent Control Act was repealed in 1997.

Jagdeep said other measures and guidelines can be introduced to regulate rental hikes instead of an act.

“The reason given by owners for high rental hikes were the refurbishment of the properties so we can look into other measures such as a special fund for the refurbishment of these properties so that owners do not need to increase rental to cover the costs,” he said.