Sarawak restructures its housing development

KUCHING: Private housing developers planning on developing large-scale projects in Sarawak are no longer required to build affordable homes starting from the first quarter of this year.

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg said instead, developers involved in projects that span 10 acres or more are required to make compensation in lieu through a housing trust fund which would allow the state government to use these funds for the development of affordable homes on specific project sites.

“The funds collected will be put into the Housing Trust Fund, which will then be used by the government to build affordable low-cost housing for the people.”

He said this at a press conference after conducting a work visit to the Sungai Bedaun Settlement Project implemented by the Land Custody and Development Authority (LCDA) here today (Jan 6).

“We will implement this in 2024 first quarter … We are amending the housing regulations in the state so that we can build quality affordable homes,” he said.

Previously, state laws required the private sector to allocate 30 per cent of housing schemes or mixed development projects to construct affordable homes when the developed land area was 10 acres (4,047 hectares) or more.

“We will discuss the payment quantum, that is, how much the developer needs to pay per acre to this (state) trust fund based on the value of the land and the project’s location. For example, if 30 per cent involves a total of 50 low-cost housing units, we will assess it based on market prices,” he said.

Abang Johari said the decision to take control of affordable housing construction was made as some property developers were not serious in developing such projects.

By empowering the state government to oversee the construction of low-cost homes, he hopes to prevent issues of delay in projects such as Sentoria Borneo Samariang Garden, which was supposed to be completed in 2020.

“In fact, we have seen a lot of problems brought by housing developers, such as houses being built hurriedly or abandoned halfway, as happened to the Sentoria Borneo Samariang Garden housing project here,” he said.

He stressed that with the funds collected into the trust fund based on the 30 per cent formula, the government guarantees to build quality affordable houses for the people.

Last November, Abang Johari proposed the establishment of a trust fund to replace the need for private sector to construct 30 per cent of low-cost housing.

He said, instead of building a house, the private sector can replace it by paying a certain amount of funds equivalent to 30 per cent of the value of the scheme and allocating it to the trust fund.

The government, he said, will carry out the housing development on behalf of the developer through the trust fund. This move aims to allow developers to design housing schemes according to the needs of a specific location, instead of being bound by affordable housing regulations.