A call for sustainable development for Penang

On Sustainable Development for Penang – address to the full council meeting of the Municipal Council of Penang Island (MPPP) on August 26, 2011 by MPPP Standing Committee Member Dr. Lim Mah Hui.

Selamat pagi and selamat sejahtera. Yg Bahagia YDP Ar Puan Patayah and Ir Ang Eng Thye, Pengarah  and Ketua Jabatan, Ahli2 Majlis, Para wartan, tuan dan puan.

Saya harap memberi beberapa tinjauan  tentang konsep perkembangan yang mampan di Penang.

Saya minta izin untuk memberi pembentangan dalam bahasa Inggeris.

I would like to touch on the issue of what type of development is Penang, in particular Penang island, heading towards?

Let me begin with an anecdote. Last week I had dinner with Mr Ramesh Chander who was a Chief Statistician in the Dept of Statistics of Malaysia in the 1970s who then went to work for the World Bank and is an advisor to many countries in setting up their statistics department.  He was here on a visit from Washington DC to advise SERI, now Penang Institute, on improving their data collection. He said the last time he came to Penang was about 3 to 4 years ago and the thing that struck him the most this time was the enormous number of high-rise and tall buildings all over Penang island. He is not the only one to say this. Many other visitors have observed the same thing. And he continued he fears that we are heading towards a housing and construction bubble.

The present state government is right to say that it wants it Georgetown to be an international livable city and to be a magnet to attract talent to this city. In its rush to achieve this goal, it has opened the flood-gates to developers to build as much and as fast as possible: more houses, more high-rise apartments, more shopping malls, more commercial offices etc.  If this is not properly planned and controlled we could end up destroying the unique charm of Penang island. One reason why Georgetown was awarded world heritage city status is Penang has the largest stock of prewar houses in South East Asia.  Indiscriminately allowing high-rise buildings to sprout anywhere and everywhere, particularly in areas where the surrounding buildings are low rise and historic (not necessarily heritage) will kill the goose that lays the golden egg.  International tourists come to Penang not to see more tall buildings; that they can find in Hong Kong, New York and Singapore. They come to experience the historic heritage of not only the heritage zone but the whole city.

The intention of the recent state government policy of increasing the plot ratio from 1:1 to 2.8:1 or the density to 87 units per acre is to increase the supply of more affordable housing. This intention is good.  However, it is unclear whether that objective can be achieved under this policy without fine-tuning.

I have often been told that we need more housing because there is not enough houses in Penang and by increasing the density ratio we can supply enough houses to bring down the prices to affordable levels. How true is this argument? Is it based on facts? The 2010 Population and Housing Census of Malaysia showed that there are 385,658 households and 468,278 housing units in Penang state, an excess of 82,620 housing units. In plain language, there are 21% more housing units than there are households.

The problem of affordable housing is very complex and I cannot offer a full explanation here. It is good that the state has asked the Penang Institute to undertake a detailed and proper study. Good policies must be based on proper and thorough studies; they cannot be rushed into.

But briefly we can say the housing problem is not that there are not enough housing units in Penang. The problem is too many of these housing units are built to cater to a small group of rich local and international investors and speculators who view Penang property prices as still cheap by international standards and whose demand is pushing up prices beyond the reach of the average income earner in Penang.  Many own multiple units. The state has to come up with a better policy to address this issue.

With increased permissible density, land suddenly becomes even more valuable and landowners could demand higher land prices. Developers sensing there is more money to make rush to purchase land with expectation of making higher profits.  Of course, they would then want to build up to the maximum limit and to maximize their profits. That is the nature of their business.

It is, however, the responsibility of the state – the politicians, the councilors, the civil, the policy makers to provide the checks and balances, to protect public interest, to come up with sensible policies to ensure we have sustainable development. The increased density ratio is a blunt policy instrument for a good objective. Policy planners and implementers must implement it judiciously and not indiscriminately.

Indiscriminate approval for developers to build to the maximum of 87 units per acre without due consideration of ample green spaces, adequate sunlight and air flow, fields and trees, public amenities, traffic congestion, availability of good transport network etc. will destroy our livable environment. A livable city has to enhance rather than degrade the natural environment.

We recently read in the papers about plans to build 30 to 40 stories high-rise in Cantonment Road, Burma Road and Jelutong Road with little regard for the traffic impact in these already overloaded areas. If we continue to indiscriminately approve high-rise and developers continue to buy up every piece of available property to build to the maximum density ratio, we will end up like Hong Kong city with high-density development and over crowding without the public infrastructure to support it.

I am not against development. The important question we need to ask is what type of development? Is it rampant and unbalanced development or is it sustainable and balanced development. The adjective is more important than the noun.

I am afraid our concept of development is simply too property centric. Can we learn any lessons from the over development of property in Dubai that has collapsed?  Do we have enough public parks, green spaces, recreational facilities, good public transport system to sustain a livable city?  Too much emphasis has been placed on property development and not enough emphasis is given to these other aspects of development.

Town planning must take into account the use of land space, the natural and cultural environment, the community needs, the amount of walkways and streets, the fields and trees, the movement of people, the type of buildings, do they blend or clash with the environment?    It cannot be just about putting up more bricks and mortar.

Let me quote a definition of town planning as the “ordering of building and land use according to a visually pleasing but practical scheme for the economy, and achieving convenience and beauty by ensuring accessibility and managing resource use while avoiding land use conflict.”

Finally I would like to put forward a proposal for consideration. We know that the traffic impact studies for big construction projects have not been effective. One reason is because consultants are hired by developers. I suggest that developers pay to a pool to be managed by MPPP to hire its own independent consultants. This will reduce any element of conflict of interests. It will also enable a more integrated approach to traffic impact studies beyond single projects.

Thank you for your attention.

Dr. Lim Mah Hui is a Standing Committee Member of the MPPP’s Committees on Financial Management, Infrastructure and Traffic and Development Planning. He has a multi-disciplinary background in finance, economics and politics and is a sought after conference speaker on International Finance, Malaysian Economics and Politics. He has also authored several books, manuscripts and articles on economics, corporations and gender issues in industrialisation. More recently he has written extensively on the present global financial crisis and its impact on Asia. More…