The Repeal of Rent Control

Even the issue has been history; but looking back the repeal of rent control which lead to the arrogant of the former state government, insensitive to the current sentiments of Penang people, were the factors that caused the downfall the former state government. The rent control act was the legal framework that allowed an active social communities in the downtown of Georgetown. It is the main factor for the living museum of old Georgetown to survive.

Penang's architectural heritage has enjoyed a better fate than other Strait Settlement states. Penang has one of the largest collections of pre-war buildings in Southeast Asia. This is for the most part due to the Rent Control Act which froze house rental prices for decades, making redevelopment unprofitable. With the repeal of this act in 2000 however, property prices skyrocketed and development has begun to encroach upon these buildings, many of which are in a regrettable state of disrepair.

The repeal of Rent Control Act, had removed that active community from downtown of Penang. The living museum had therefore disappeared. Today we have seen many cultural heritage disappearing, the culprit is the repeal of Rent Control Act. The political will of the former state government was to please the business community, the land owner, the developer; who were waiting for their opportunity to make profit form the land, deep in the downtown. The arrogant government forgot the masses of the urban poor, the main forces who were behind Gerakan and Tun Dr Lim Chong Eu in 1969. There is no plan for them.......

The result, the political Tsunami of 308 in 2008 election....complete collapse of Gerakan from the state politic. It may be the end of the party in Penang. The 12th Malaysian general election was held on March 8, 2008, the opposition dealt a heavy blow to the Barisan Nasional(Gerakan)coalition government by taking the state of Penang. Although Penang was regarded as a hotly contested state, the outcome unexpectedly turned out to be a landslide win with the opposition, the Democratic Action Party (DAP) gaining the majority of the state seats. Many seats saw the opposition winning over two-thirds of the votes, rather than the usual 50-50 distribution. BN only won 2 of the 13 parliamentary seats and 11 of the 40 state seats, its worst performance in Malaysian history.

Another significant blow was the defeat of Gerakan Acting President, Tan Sri Dr. Koh Tsu Koon, who was looking to move up from state politics, decided not to run for his state seat and subsequently gave up his Chief Minister post of 18 years, to challenge the Batu Kawan parliamentary seat. Some speculated this was part of a larger ambition to be a cabinet member, only to lose to newcomer P. Ramasamy of the DAP by a large margin of 9,485 votes.

Below is the article from Aliran, by Dr Khoo Boo Teik. It is an interesting read again despite two years after the fall of the Gerakan state government. The article was on 2000, in 2008 the state government collapse, today is 2010.



The Repeal of Rent Control

Requiem for Gerakan

By Dr Khoo Boo Teik

On Friday, 17 March 2000, the hide-and-seek game that the Chief Minister of Penang, Tan Sri Dr Koh Tsu Koon, had been playing with S.O.S. (Save Ourselves, an ad hoc support group helping tenants affected by the repeal of rent control) resulted in the arrest of S.O.S. secretary, B. K. Ong and one other S.O.S member. (Three days later, the S.O.S. treasurer was also arrested.)

The S.O.S. members had been trying to get Dr Koh to talk to the tenants directly. Dr Koh refused, although he had been quite willing, earlier, to hold discussions with landlords and their representatives over a RM100 million government fund to help them renovate their premises.

The S.O.S. members used the unorthodox but non-violent way of unfurling a banner in front of Dr Koh’s car after the Chief Minister officiated at the opening of Eight Row, Krian Road, newly rehabilitated houses adapted for upmarket commercial purposes.

I used to live in a rent control house round the corner from Eight Row. That house no longer exists. But I’m moved by the incident to write about the repeal of rent control in Georgetown, Penang.

And as I thought about rent control, I was struck that the S.O.S. incident captures the coming end of Gerakan Rakyat Malaysia’s relevance to Penang (and Malaysian) politics.

Rent control: a personal note

I was born and bred in Georgetown. For the first twelve years of my life, my family used to live in a single room. We did that three times, twice in shophouses and once in a house that was partly used for storage. Each was a rent-controlled house leased by an uncle. In this way, I got to know Macalister Road, Penang Road, Macalister Lane and their surrounding areas quite well.

When I was thirteen, my family moved once more to a rent-controlled house at Macalister Road. Unlike other families on our block, we used the house for residential purposes only. We had no subtenants. Looking back, having a whole house was a big improvement for us, but having a family of eight in a two-bedroom house hardly left any space to sublet.

The rent was RM40 a month, always paid on time to a rent collector employed by our landlord, who was no pathetic owner of a single house, but one of the wealthiest property estates which owned whole blocks of rent-controlled premises in Georgetown.

Even so, I suspect RM40 per month is the sort of rental that causes landowners, developers, professionals in the property sector, brokers and bankers to gnash their teeth over ‘prime properties gone to waste’. Others, like politicians, economists and journalists, will be driven half mad by thoughts of low returns on investment, unfair subsidies, and parasites living off exploited landlords.

The true price of tenancy

Hence, I should mention that my father paid RM13,000 to obtain a transfer of tenancy. Not all that money went to the landlord, but some of it did in order that the landlord approved the change of tenancy. ‘Bottom line’ fanatics and market fundamentalists should note that that was RM13,000 ‘in 1968 dollars’, paid in cash, upfront, for the right to rent the house.

In May 1968 the money my father paid could have bought a single-storey terraced house in the new Green Lane suburban estates. But he worked in town. His children studied in nearby schools. And his friends considered it unwise to relocate to the ‘country’ only a few months after certain quarters had turned the Labour Party’s hartal into Penang’s 1967 racial riots.

Rent control and Georgetown's heritage

Up to the ‘depressed 1960s’, however, most families I knew did not own their houses. If they weren’t living in government or employer-provided quarters, they were chief tenants, subtenants, or co-equal tenants (often family members pooling to rent a house). For them housing was rent-controlled premises, a sublet room, a partitioned cubicle, or, in the case of the destitute, the five-foot path.

Thus, many, by no means rich, people, struggled to save dollar after dollar to rent a whole house. It was the norm, both in market and social terms, that he or she who paid for the ‘right of tenancy’ could recoup his or her investment, via business (including the business of subletting), or by ceding the tenancy rights to someone else at market price.

It insults those people’s self-reliance and thrift, and degrades an honoured custom to mock at the ‘subsidised rent’ without considering the high price of the change in tenancy when talking about rent control in these times.

The basis of 'our culture'

I don’t mention any of this out of nostalgia. ‘Our house’ was quite livable. But, from a housing point of view and more, there was nothing charming about the overcrowded, underprovided, dilapidated, unimproved premises that made up much of rent-controlled housing in the oldest and poorest parts of Georgetown.

Yet from these unenviable quarters Georgetown’s common people – merchants, retailers, tradesmen, money changers, craftsmen, coffeeshop proprietors, clerks, schoolteachers, roadside petty traders, itinerant hawkers, temple and association caretakers, (gambling) club ‘managers’, manual labourers, trishaw pedlars and even gangsters – created a vibrant urban culture.

Generations of such George-town people, of all ethnic backgrounds – who have little in common with the politicians who love to identify with them at election time – can be proud of the finer aspects of this culture which suburbia and shopping complexes cannot replicate.

Too often, however, those who package this culture as ‘our heritage’ pander to the tourist dollar, upmarket tastes and yuppie yearnings for gentrification. They speak of ‘our culture’ and ‘our heritage’ as if they are nothing save blood and genes mixed up with a ‘pearl of the orient’.

It never occurs to them that Georgetown’s wonderful hawker food and kuih nyonya, Jual Murah and nasi kandar, or Chingay and dondang saying, for example, had a material basis, one critical part of which was state-imposed rent control.

Subdivided and sublet, converted and multiple-use, tenant-managed and rent-controlled, mostly pre-war housing held down the costs of commerce and services, small and cottage industries, and social reproduction.

Consequently a market in rent control housing flourished. It may not have been the type of housing market that everyone liked. However, every bit of it was a legitimate part of the urban economy and necessary for social and political stability.

Altering the rules of the housing market

That was at least true until the late 1970s. Then Penang’s industrialisation, economic growth, the KOMTAR project, expanding housing credit, and demographic pressures transformed George-town’s housing market.

Those who could afford homeownership moved from the city centre into private suburban housing estates, or the Penang Development Corporation-built housing in Bayan Baru and Seberang Jaya. Those who couldn’t, or waited till it was too late, found that the rules of the housing market had been changed.

A frenzied pace of urban growth brought new developers and speculators who bought rent-controlled houses where they could to redevelop the areas for new types of tenants.

With that, the customary rights of the old tenants were doomed. In market and legal parlance, they were reduced to low-status ‘encumbrances’ – nuisances, if you will – in the calculations of the new landowners who pursued big redevelopment bucks.

Across Georgetown, a new breed of property developers emerged that negotiated the relocation of their tenants, or applied to the law to evict them.

Customs be damned

Henceforth, a cacophony of politicians, bureaucrats, developers, economists, professionals and journalists made sure rent control acquired a bad name. They said rent control was obsolescent, inefficient and unfair. Tenants were unreasonable, undeserving and parasitic. Rent-controlled housing unprofitably sat on scarce and underutilized land.

It was no accident that the intimations of the recent repeal of the Rent Control Act came after 1990, after Dr Mahathir Mohamad’s position had been secured, and privatisation and Malaysia Inc. could proceed unimpeded.

It wasn’t just rent control that was put to the legislative sword. All over Malaysia, customary rights yielded to deregulation, market forces and the full exercise of property rights. Indeed, customary rights be damned: social practices and norms once embodied in Malay reserve land, Muslim wakaf land, Chinese clan holdings, Indian estate labour lines, and Sarawak’s remotest forests were targeted in the same way as rent control.

Ironically people who once had the protection of customary rights and social norms became expendable ‘encumbrances’, also known as parasitic tenants, illegal squatters, superfluous labourers, or anti-development natives.

No Georgetown after dark

The repeal of rent control has paved the way for forms of redevelopment that will replace a thriving historical community with a gutted inner city. Georgetown’s urban culture as we’ve known it will come to an end. There will be no Georgetown after dark.

For that the Barisan Nasional government has a lot to answer.

On the one hand, its Chief Minister has been talking 100 million bucks with the landlords. On the other hand, he announced his government would assist ‘handicapped, single and elderly’ tenants but, of course, not ‘bank managers and professionals’ as if the latter are typical S.O.S. tenants. He said the government must ‘be fair to 96% of Penangites’ who paid market prices for their housing’.

What does that kind of ‘fairness’ mean, if not subsidies for landlords, and market prices for tenants?

Look back on Komtar

I’m not an MCA man who runs down Dr Koh to increase MCA’s chances of taking over the Penang chief minister’s post. Petty squabbles between power grabbers generally nauseate me.

But I think Dr Koh’s idea of ‘fairness’ at this juncture foretells the end of Gerakan’s relevance to Penang (and Malaysian) politics.

Look back upon a time when things were quite different, as, say, when the KOMTAR project was initiated in the 1970s. KOMTAR was mired in controversy, dislocated lots of people from the project vicinity, and was opposed on grounds that it would ruin Georgetown’s heritage, among other things. One can continue to argue these matters.

But in the light of the government’s mismanagement of the rent control crisis, one critical difference stands out. To implement KOMTAR, Tun Dr Lim Chong Eu’s government, via the Penang Development Corporation (PDC), and the State Low Cost Housing Committee, compensated, assisted and resettled people who were ‘decanted’ from the area.

In contrast, although the move to repeal rent control was announced ten years ago, the present government has prepared no contingency plan, no supporting fund, and no alternative residential, commercial and industrial premises. Faced with George-town’s most serious development issue, PDC, once the government’s powerful ‘implementation arm’ has no role.

The contrast isn’t to be explained by differences in the personalities or political abilities of Dr Lim and Dr Koh. The difference lies in Gerakan’s changed character as a political party.

A different Gerakan

When it was formed, Gerakan was a coalition of three main groups – Dr Lim’s former United Democratic Party (UDP), a group of ex-Labour Party politicians led by the late Tan Sri Dr Tan Chee Khoon, and trade unionists like V. David and the late V. Veerappan. Joining this coalition were intellectuals like Professor Syed Hussein Alatas.

It was a coalition that believed in some measure of social democracy as the way to solve social and political problems. It was Gerakan’s promise to tackle Penang’s economic and other problems that won the party the 1969 state election.

The ex-labourites and unionists fell out with Dr Lim, and left him Gerakan’s rump. That split diluted but didn’t abort Gerakan’s basic plan. Gerakan’s subsequent entry into Barisan Nasional may have been politically opportunistic. Still government then meant planning and implementing socio-economic projects. The interventionist orientation of Dr Lim’s Gerakan fit in with Tun Abdul Razak’s commitment to state planning via the New Economic Policy.

For Penang then PDC implemented a strategy of ‘rural industrialization, rural urbanization, urban redevelopment, tourism promotion, and agro-horticulture’. Not all the PDC plans were realized. Many of their results can also be debated.

But there would not have been Bayan Lepas and Prai free trade zones, the townships of Bayan Baru and Seberang Jaya, and Geogetown’s ‘comprehensive development areas’ at KOMTAR, Macallum Street Ghaut and elsewhere without that basic commitment to the social responsibility of government.

SOS - but for whom?

Gerakan’s present leadership shows no such commitment – not to social democracy, state planning, or ‘proactive’ implementation – even assuming that kind of commitment were practicable under Dr Mahathir’s privatization and Malaysia Inc.

Plans for Penang there are and will be: Penang Strategic Development Plan 1, Penang Into the 21st Century, Penang Strategic Development Plan 2, and so on. But they are ‘public relations’ plans bearing motherhood statements for feelgood effects – ‘post-industrial society’, ‘sustainable development’, ‘cultural vibrancy’, ‘caring society’, ‘quality of life’.

The reality is nothing less than abject surrender to market forces. (If certain rumours about the origins of Lim Chien Aun and Lim Boo Chang’s defections to MCA are to be believed, those are market forces outside Penang at that).

One doesn’t have to covet the chief minister’s seat to conclude that Gerakan, in presiding over the end of rent control in Georgetown, has itself become irrelevant to Penang’s future.

Even if Gerakan can’t face up to it, S.O.S isn’t just the lonely cry of desperate tenants.

(source: www.aliran.com/oldsite/monthly/2000/02c.htm)

Will the Heritage issue become critical, and follow similarly to Rental Control issue for next election? the current state government need to learn the lesson from the issue in 2000.

Meow, meow, meowwwww.......will history repeated?.....