What are the necessary conditions for ‘diverse and thriving’ neighbourhoods? What is the opposite of ‘diverse and thriving’ neighbourhoods? Are thriving neighbourhoods more expensive to live in? Are our capacities to grow into middle-income earners limited by the neighbourhoods we reside in? In this webinar, we will explore how prosperous neighbourhoods are distinguished by their levels of place differentiation – a reflection of the diverse freedoms and opportunities they offer to residents. The discourse will also include housing as the pivotal anchor that shapes the lives of households.

1. Khazanah
Research
Institute
1
KRI Webinar
24AUG
DISCUSSING FINDINGS FROM OUR LATEST REPORT:
9.30AM – 11.00AM LIVE
THU
2023
- @KRInstitute
‘Residential Settlements and Spatial Inequality:
A Study of Greater Kuala Lumpur Neighbourhoods’
Sr Dr Suraya Ismail
Director of Research
Theebalakshmi
Kunasekaran
Research Associate
Puteri Marjan
Megat Muzafar
Research Associate
Adam Manaf
Mohamed Firouz
Research Associate
Gregory
Ho Wai Son
Research Associate
RICHPLACES
POORPLACES
Managing therealities
ofneighbourhoods

2. DISCUSSING FINDINGS FROM OUR LATEST REPORT:
‘ResidentialSettlements
andSpatialInequality:
A Study of Greater Kuala
Lumpur Neighbourhoods’

3. Khazanah
Research
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GKL Developments and
Agglomeration economies
Theebalakshmi Kunasekaran
3

4. Khazanah
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4
GKL share of population, 1970 – 2020
Note: KRI’s definition of
GKL conurbation in this
report includes four states,
namely Kuala Lumpur,
Selangor, Putrajaya and
Negeri Sembilan.
Source: DOS (2020), DOS
(2022) and KRI
calculations
More Malaysians & higher income households live in GKL
GKL conurbation registered a population share of nearly
32% in 2020 compared to 20.3% four decades ago. The
estimated population is 10.4m as of 2020.
Nearly 57% of T20 households reside in the GKL
conurbation. Half of the GKL households earn approximately
1.5x the median income of a Malaysian household.
56.6
36.7
17.9
43.4
63.3
82.1
0%
20%
40%
60%
80%
100%
T20 M40 B40
GKL
Other states
20.3% 22.1% 23.5% 27.4% 29.1% 31.9%
79.7%
77.9%
76.5%
72.6%
70.9%
68.1%
0
5
10
15
20
25
30
35
1970 1980 1991 2000 2010 2020
35m
GKL
Other
states
Top 5 densely populated states
Kuala Lumpur 8,157/km2
Putrajaya 2,215/km2
Pulau Pinang 1,659/km2
Labuan 1,034/km2
Selangor 880/km2
GKL composition of households by household group, 2019 (%)
Note: KRI’s definition of GKL
conurbation in this report
includes four states, namely
Kuala Lumpur, Selangor,
Putrajaya and Negeri
Sembilan.
Source: DOS (2022) and KRI
calculations
Top states with highest median household income, 2019
Kuala Lumpur RM10,549
Putrajaya RM9,982
Selangor RM8,210
Labuan RM6,726
Johor RM6,427

5. Khazanah
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GKL share business establishments by sectors, 2015
GKL conurbation:
The prime location for businesses
GKL conurbation:
• Prime location for over 1/3 of the businesses in both the
construction and services sector. (Source: Economic Census 2016)
• Known as the commercial and financial hub
• Home to both domestic and international companies, with 103
MNCs in 2020
1,408
262
17,165 16,876 311,416
10,329
764
31,936 23,682 488,891
0%
20%
40%
60%
80%
100%
Agriculture Mining and
quarrying
Manufacturing Construction Services
GKL
Other
states
Note: KRI’s definition of GKL conurbation in this report includes four states, namely Kuala
Lumpur, Selangor, Putrajaya and Negeri Sembilan.
Source: DOS (2017) and KRI calculations
Khazanah
Research
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5

6. Khazanah
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GKL thrives due to agglomeration economies
Geographical proximity advantage – when firms are close to
input suppliers and customers, they save on transport costs
moving goods.
Lower transportation costs (Krugman, 1991)
01
Larger the labour pool, the more diverse and specialized it can
become. Lower search cost due to higher probability of
appropriate match.
Labour market pooling (Overman and Puga, 2010)
Knowledge is a public good. Closer proximity enables quicker
diffusion/ adaptation of ideas across firms and people.
Knowledge exchange critical for innovation.
Knowledge Spillovers
Agglomeration economy refers to the benefits derived when firms and people collocate together, thus
achieving higher productivity.
2 types of Agglomeration economy
1. Localisation economies (similar firms)
2. Urbanisation economies (diverse firms)
02
03
What drives agglomeration economies?
6

7. Khazanah
Research
Institute
Source: Various Malaysia Plans and economic corridors website
7
• Export-oriented Industrialisation Strategy,
Heavy Industrialisation.
• Bayan Lepas Free Trade Zones (FTZs)
fostered electronic and electrical cluster.
• 8 FTZs across states: Melaka, Selangor,
Kedah.
• Cluster-based development in textiles,
chemical, food processing, transportation.
• Industrial Master Plans 1 and 2.
• Transition to knowledge-based economy
with specialized clusters like Subang
Industrial Aerospace Park, MSC, and TPM.
• Establishment of regional economic
corridors: NCER, ECER.
Policies promoting industrial
development @ agglomeration
of firms
• Creation of new urban centers with
different sizes and specializations.
• Identification of existing towns with
potential for agglomeration economies and
formulation of structure plans.
• Expansion of satellite towns: Shah Alam,
Klang, Kajang, Bangi, Sepang, to
decentralize population growth from KL.
• Implementation of National Urbanisation
Policy (NUP).
• Establishment of Putrajaya for federal
government administration and
development of Cyberjaya.
Creation of new urban
centres @ agglomeration of
business and people
• Development of major highways like KL-
Seremban and KL-Karak in MP3, along
with feeder roads in regional development
plans.
• Construction and enhancement of roads
and expressways (PLUS, NKVE, LDP)
enabling the growth of townships like Nilai
and Bukit Beruntung.
• Investment in public transport systems
including KL Sentral, KTMB, ERL, LRT,
and Monorail.
• Implementation of significant urban road
projects to enhance traffic flow in KL, like
the SMART project.
Transportation networks
driving agglomeration
activity
Policies anchoring agglomeration economies in MY
Malaysia’s development policies driving the agglomeration process and creation of clusters

8. Khazanah
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Institute
Multimedia Super Corridor (MSC)
8
A policy-led driven cluster for ICT firms and related institutions.
Why MSC fallen short of initial
expectations:
• 1996 – 2005: 60% firms outside MSC legal
boundaries
• Limited interactive networking/relationship
• Focus on call centres and data processing
activities, hindering creative environment
• Lack of high-tech endowments for resident
patents
• Low absorptive capacity among local firms
• Lack of social amenities for tacit knowledge
exchange
• Limited ‘soft’ infrastructure for residential
centre establishment
• Lack the benefits of
availability of pool of
knowledgeable workers at
least in the short run.
• Lack of social interaction
constrains business
development.
• Some corridors lack
necessary high-level
manpower for progress.
Policy driven clusters

9. Khazanah
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Place differentiation
Gregory Ho
9

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Places Reflect Human Functions
10
Trends at the Township level
Place Function(s)
Offices Work
Restaurants Eating, Socializing,
Malls Acquiring groceries,
Parks Exercise, Recreation,
Religious Building Religious obligations
• Google Maps provide locational intelligence to the
public.
• Every search query conducted on the platform
represents the intent to get information about a place;
or actual travel to a place
Places serve different functions for society:

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Units of Analysis
11
The choice of neighborhoods as our unit of analysis
There are 166 townships in GKL*
Why neighborhoods?
• Expect sufficient variation at the level of
neighborhoods, but not of state/daerah/
mukim or other administrative boundaries
Source: SPAD (2016)
Note:
In the absence of an official definition, we define Greater Kuala Lumpur as comprising of KL, Selangor,
Putrajaya and Negeri Sembilan.
Our definition is motivated by various structure plans and SPAD’s mobility study.

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Method:
12
The Graph representation of Co-location probabilities (matrix ΦP,P’ )

13. Khazanah
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Method of Reflections:
13
The result is a ranking of neighborhoods with diverse places and a ranking of places that are
rare or common.
Neighbourhoods
with higher place
differentiation
Neighbourhoods
with lower place
differentiation
Places that
are more
uncommon
Places that
are more
common

14. Khazanah
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Geographic Distribution of place differentiation:
14
The result is a ranking of neighborhoods with diverse places and a ranking of places that are
rare or ubiquitous.
Less diversified neighbourhoods have the
following operating environment:
1) For services: medical services (doctor), moving
companies, storage companies.
2) For leisure: open parks, public libraries.
3) For consumption: supermarkets, restaurants, cafes,
bakeries, convenience stores, hardware stores
4) For mobility: bus stations
Most diverse neighbourhoods have the
following type of amenities in their operating
environment:
1) For services: law, physiotherapy, financial services,
beauty salons
2) For leisure: casinos, bowling alleys, art galleries,
movies theatres, a zoo
3) For consumption: Book stores, liquor stores, shoe
stores, department stores
4) For mobility: LRT stations, taxi stands, an airport

15. Khazanah
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Policy Implications:
15
Descriptive Tool that describes the differences between neighborhoods
Neighbourhoods
with lower place
differentiation*
Neighbourhoods
with high place
differentiation**
Klang Rawang Kota Damansara Taman Desa
*Have basic amenities e.g. logistic companies, parks, public libraries, supermarkets, restaurants, cafes,
bakeries, convenience stores and hardware stores
**Have additional amenities e.g legal practice, physiotherapy, financial services, beauty salons, lottery
outlets, bowling allies, movie theatres, liquor stores and department stores.
1. We have found that place differentiation is mainly
correlated with population density.
2. The GKL Amenity Space can help predict which
types of businesses or places that would likely
prosper when there is an influx of population in the
neighborhood.
3. The inclusion of ‘new urbanism apparatus’ as a
balancing mechanism to ensure residents have a
say on what places they desire in their
neighborhoods.
The GKL Amenity Space as one of the various
data-driven decision filters to help local
councils, developers, and residents' association
map out their desired development.

16. Khazanah
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Housing
Adam Firouz
16

17. Khazanah
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0.3
0.4
0.5
0.6
0.6
0.3
0.2
0.5
0.0
0.5
1.0
1.5
2.0
2.0k
0.0
0.2
0.8
0.6
0.7
0.5
0.1
0.2
0.1
0.4
1.7
0.0
0.5
1.0
1.5
2.0
Thousands
0.0
0.0
0.2
0.2
0.2
0.1
0.1
0.0
0.0
0.1
0.0
0.5
1.0
1.5
2.0
Thousands
0.1
0.1
0.0
0.1
0.0
0.5
1.0
1.5
2.0
Thousands
GKL’s overhang: supply & demand mismatch?
Note: Commercial housing units such as service apartments are excluded.
Source: NAPIC (2022a) and KRI calculations
17
Unsold units, by state and price range, Q1 2022
5.0
27.1
5.5
15.8
18.4
13.9
21.7
27.5
0
10
20
30
40
50
<RM100k
100k
–
200k
200k
–
300k
300k
–
400k
400k
–
500k
500k
–
600k
600k
–
700k
700k
–
800k
800k
–
900k
900k
–
1m
>1m
50%
7.4
7.3
19.2
49.0
15.0
19.3
12.4
14.8
10.0
39.6
41.8
0
10
20
30
40
50
<RM100k
100k
–
200k
200k
–
300k
300k
–
400k
400k
–
500k
500k
–
600k
600k
–
700k
700k
–
800k
800k
–
900k
900k
–
1m
>1m
42.6
21.1
21.2
50.6
0
10
20
30
40
50
<RM100k
100k
–
200k
200k
–
300k
300k
–
400k
400k
–
500k
500k
–
600k
600k
–
700k
700k
–
800k
800k
–
900k
900k
–
1m
>1m
11.8
8.0
13.2
10.6
13.9
7.9
23.1
21.4
15.5
25.3
0
10
20
30
40
50
<RM100k
100k
–
200k
200k
–
300k
300k
–
400k
400k
–
500k
500k
–
600k
600k
–
700k
700k
–
800k
800k
–
900k
900k
–
1m
>1m
Count
As
%
of
launched
units
Kuala Lumpur Selangor Putrajaya Negeri Sembilan
There are many unsold units in KL & Selangor, at the middle and top price range.

18. Khazanah
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Where is the housing overhang?
Note: Commercial housing units such as service apartments are excluded.
Source: NAPIC (2022a), NAPIC (2022b) and KRI calculations 18
Number of overhang units, by administrative district, Q1 2022
In absolute terms (total number of units), the overhang is concentrated near KL city centre

19. Khazanah
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Where is the housing overhang? (cont.)
Note: Commercial housing units such as service apartments are excluded.
Source: NAPIC (2022a), NAPIC (2022b) and KRI calculations 19
Share of overhang units, over incoming supply, by administrative district, Q1 2022
Relative to incoming supply, periphery areas have shares of overhang

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House prices have gone up
Source: NAPIC (Various years), DOS (2020), and KRI calculation
Prices moderated for the past few years but remain unaffordable
0
50
100
150
200
250
300
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Index
(2000=100)
House
price index
At CAGR
of 3.1%
Malaysia House Price Index, 2000 – 2021
4.1
4.3 4.4 4.4
3.9
4.9 4.8
4.1
2002 2004 2007 2009 2012 2014 2016 2019
Median multiple affordability, 2002 – 2019
Affordability category
5.1 & above: Severely unaffordable
4.1 to 5.0: Seriously unaffordable
3.1 to 4.0: Moderately unaffordable
3.0 and below: Affordable
Source: NAPIC via CEIC (n.d.) and KRI calculations

21. Khazanah
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The market is somewhat polarised
Note: Scales are different for each state
Source: Brickz (n.d.) and KRI calculations
In KL & Selangor, transactions are concentrated at the lower & top end of prices.
Number of sub-sale transactions, by state and price, 2015 – 2019
Non-landed Landed
0
4,000
8,000
0
2,000
4,000
Kuala
Lumpur
0
15,000
30,000
0
10,000
20,000
Selangor
0
150
300
0
75
150
Putrajaya
0
1,500
3,000
<
RM100k
100
–
200k
200
–
300k
300
–
400k
400
–
500k
500
–
600k
600
–
700k
700
–
800k
800
–
900k
900k
–
1m
≥
1m
0
5,000
10,000
<
RM100k
100
–
200k
200
–
300k
300
–
400k
400
–
500k
500
–
600k
600
–
700k
700
–
800k
800
–
900k
900k
–
1m
≥
1m
Negeri
Sembilan

22. Khazanah
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Non-landed houses are popular but smaller, especially service
residences (though more expensive)
Source: Brickz (n.d.) and KRI calculations
Share of GKL sub-sale transactions, by house type, 2015 – 2019 Share of GKL sub-sale transactions, by rooms & house type, 2015 – 2019
Terrace House
80.7%
(93.6k)
Semi-D
8.4%
(9.7k)
Bungalow
6.5%
(7.5k)
Town
House
Clu-
ster
Apartment
33.8%
(38.5k)
Condominium
28.4%
(32.3k)
Flat
26.1%
(29.6)
Service Residence
11.4%
(13.3k)
Landed
Non-landed
55% (51.2k)
25% (2.5k)
28% (2.1k)
83% (2.8k)
40% (0.7k)
39% (36.2k)
74% (7.1k)
69% (5.2k)
45% (0.8k)
Terrace
House
Semi-D
Bungalow
Town
House
Cluster
House
27.6% (3.7k)
92% (35.4k)
76% (24.6k)
74% (22.0k)
52% (7.0k)
Ap'ment
Condo
Flat
Service
Resd'ce
55%
25% (2.5k)
28% (2.1k) 83% (2.8k)
40% (0.7k)
39%
74% (7.1k)
69% (5.2k)
45% (0.8k)
Terrac…
1 room 2 rooms 3 rooms 4 rooms & above
Service
Residence

23. Khazanah
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Non-landed houses are popular but smaller, especially service
residences (though more expensive)
Source: Brickz (n.d.) and KRI calculations
Share of GKL sub-sale transactions, by house type, 2015 – 2019 Share of GKL sub-sale transactions, by rooms & house type, 2015 – 2019
Terrace House
80.7%
(93.6k)
Semi-D
8.4%
(9.7k)
Bungalow
6.5%
(7.5k)
Town
House
Clu-
ster
Apartment
33.8%
(38.5k)
Condominium
28.4%
(32.3k)
Flat
26.1%
(29.6)
Service Residence
11.4%
(13.3k)
Landed
Non-landed
55% (51.2k)
25% (2.5k)
28% (2.1k)
83% (2.8k)
40% (0.7k)
39% (36.2k)
74% (7.1k)
69% (5.2k)
45% (0.8k)
Terrace
House
Semi-D
Bungalow
Town
House
Cluster
House
27.6% (3.7k)
92% (35.4k)
76% (24.6k)
74% (22.0k)
52% (7.0k)
Ap'ment
Condo
Flat
Service
Resd'ce
55%
25% (2.5k)
28% (2.1k) 83% (2.8k)
40% (0.7k)
39%
74% (7.1k)
69% (5.2k)
45% (0.8k)
Terrac…
1 room 2 rooms 3 rooms 4 rooms & above
Service
Residence

24. Khazanah
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Many non-landed homes are near the city centre, but
at a price and space premium
Source: Brickz (n.d.) and KRI calculations
< RM100k
RM100k RM200k RM300k RM400k RM500k RM600k RM700k RM800k RM900k
≥ RM1m
– 200k – 300k – 400k – 500k – 600k – 700k – 800k – 900k – 1m
< 3km 125 644 686 878 1,117 1,082 888 502 432 293 3,220
3 – 6km 1,129 7,002 4,851 5,026 3,979 2,544 2,055 1,126 798 449 3,059
6 – 9km 2,283 6,613 5,739 5,214 3,432 1,880 1,474 688 490 358 970
9 – 12km 1,230 2,974 2,880 2,506 1,457 569 317 155 67 38 68
12 – 15km 2,023 4,095 2,338 1,272 502 158 106 52 32 1 10
15 – 18km 1,840 2,904 1,785 1,328 357 112 46 16 8 2 14
18 – 21km 1,999 1,911 1,055 184 29 10 6 3 6 3
21 – 24km 1,023 1,238 427 69 2 1 3
24 – 27km 452 319 22 1 1
< 3km 592 614 799 871 980 1,001 1,078 1,109 1,167 1,302 1,679
3 – 6km 624 650 818 926 1,040 1,141 1,206 1,302 1,389 1,523 2,013
6 – 9km 650 657 829 927 1,012 1,145 1,235 1,389 1,410 1,513 1,930
9 – 12km 657 700 848 893 1,012 1,181 1,292 1,442 1,537 1,505 1,776
12 – 15km 650 740 850 949 1,061 1,132 1,394 1,518 1,642 3,035
15 – 18km 661 743 813 920 1,127 1,340 1,337 1,362 1,356 2,266
18 – 21km 678 753 863 1,023 1,851 947 1,091 1,158
21 – 24km 667 721 753 904 1,264
24 – 27km 850 896 1,358
Non-landed sub-sale GKL transactions, by price range and distance to KLCC, 2015 – 2019
Number of
transactions
Median unit
size (sq. ft)

25. Khazanah
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Source: Brickz (n.d.) and KRI calculations
< RM100k
RM100k RM200k RM300k RM400k RM500k RM600k RM700k RM800k RM900k
≥ RM1m
– 200k – 300k – 400k – 500k – 600k – 700k – 800k – 900k – 1m
< 3km 125 644 686 878 1,117 1,082 888 502 432 293 3,220
3 – 6km 1,129 7,002 4,851 5,026 3,979 2,544 2,055 1,126 798 449 3,059
6 – 9km 2,283 6,613 5,739 5,214 3,432 1,880 1,474 688 490 358 970
9 – 12km 1,230 2,974 2,880 2,506 1,457 569 317 155 67 38 68
12 – 15km 2,023 4,095 2,338 1,272 502 158 106 52 32 1 10
15 – 18km 1,840 2,904 1,785 1,328 357 112 46 16 8 2 14
18 – 21km 1,999 1,911 1,055 184 29 10 6 3 6 3
21 – 24km 1,023 1,238 427 69 2 1 3
24 – 27km 452 319 22 1 1
< 3km 592 614 799 871 980 1,001 1,078 1,109 1,167 1,302 1,679
3 – 6km 624 650 818 926 1,040 1,141 1,206 1,302 1,389 1,523 2,013
6 – 9km 650 657 829 927 1,012 1,145 1,235 1,389 1,410 1,513 1,930
9 – 12km 657 700 848 893 1,012 1,181 1,292 1,442 1,537 1,505 1,776
12 – 15km 650 740 850 949 1,061 1,132 1,394 1,518 1,642 3,035
15 – 18km 661 743 813 920 1,127 1,340 1,337 1,362 1,356 2,266
18 – 21km 678 753 863 1,023 1,851 947 1,091 1,158
21 – 24km 667 721 753 904 1,264
24 – 27km 850 896 1,358
Non-landed sub-sale GKL transactions, by price range and distance to KLCC, 2015 – 2019
Number of
transactions
Median unit
size (sq. ft)
Many non-landed homes are near the city centre, but
at a price and space premium

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Making sense of what Malaysians value
The Hedonic Price Model (HPM)
How do housing attributes relate with transacted prices?
House Price
Neighbourhood/
Locational
attributes
Distance to
malls
Structural
attributes
Distance to low-
cost housing
Freehold Etc.
Etc.
e.g. How many Ringgit for
each square footage? Distance to city
centre
Distance to train
stations
Size Rooms
01
0100
0200
0300
0400
≥500
No. of
transactions
Source: KRI illustration based on Brickz (n.d.)
20km
0 250 1,000
Price psf
Landed housing units transacted in GKL, 2016–19

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How do housing attributes relate with prices?
Note: Outliers removed based on 99 pct CI. Variance inflation factor <4 for all coefficients. S.I. = Statistically Insignificant
Source: KRI calculations
Dependent Variable: Price (RM)
Landed Non-Landed
Constant +156.9k +109.6k
Structural
attributes
Freehold +31.4k +48.4k
Land area (sq. ft) +0.0k NA
Unit size (sq. ft) +0.2k +0.5k
Rooms +29.2k -55.2k
Floors -4.6k NA
Neighbourhood
attributes
Distance to hospital (km) -2k -6.8k
Distance to university (km) -2.4k -0.8k
Distance to shopping centres (km) -3.6k -8k
Distance to cinema (km) -0.6k 4.2k
Distance to private low-cost housing (km) 5.2k 18.5k
Locational
Attributes
Distance to train station (km) -1.4k -1.7k
Distance to KL City Centre (km) -3.8k -8.4k
R-squared Adj. 0.65 0.64
Observations 100,504 105,349
Hedonic price model, general sub-sale housing transacted under RM1 million in 2015 – 2019
Most attributes correlate with price (positively or negatively) as expected. But there are
interesting observations
The further away to private
low-cost housing, the higher
the price by RM5.2k or RM18.5k
(for every 1km)
Holding all else equal..
The bigger the unit (by every 1
sq. ft), the higher the house price
by RM0.5k (non-landed).
But the more rooms, the lesser
the price by RM55.2k.
NIMBY effect?
Signs of poor conditions?
Usable space matters more
than rooms?

28. Khazanah
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Policy implications:
Raising housing standards
We recommend developing a ‘Good
Quality Housing Standard based on a
National Housing Survey.
The survey is needed to identify
qualitative gaps in existing conditions and
standards that represents what households
and individuals desire to have based on
their household typologies and lifecycle.
No of rooms 1 room 2 rooms 3 rooms
Floor space area 600 sq. ft 700 sq. ft 800 sq. ft
National Housing Standard 2019: minimum floor space
As shown, usable space is valued and comes
at a premium. Much of transacted affordable
housing is below the National Housing Standard
in terms of space.
Beyond space, the presence of NIMBY
behavior towards low-cost housing reflects
the poor & deteriorating housing conditions.

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Policy implications:
Revisiting low-cost housing quotas
Note: Depending on land worth and location
Source: JPN KPKT (2018a)
Category Sales price Income Target Group
Low-Cost RM42,000 & below* RM1,500 and below
Medium Low-Cost RM48,000 – RM70,000 RM1,501 – RM2,600
Medium Cost RM70,001 – RM150,000 RM2,501 – RM3,000
High-Cost Above RM150,000 Above RM3,000
Low-cost housing price structure and target groups (since Aug 2000)
Consideration should be given to exempt developers already
building affordable homes (3x median income) to ensure decent
standards & a clearer social sector demarcation.
Presently, developers are required to allocate 30% of housing development for low-cost
housing.
However, private low-cost housing is more likely to turn to urban slums (vs government low-
cost housing). This is due to low standards to meet prices as low as RM42,000, and passing off
the maintenance burden wholly to the poor and vulnerable.
Khazanah
Research
Institute

30. Khazanah
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Building an enabling policy framework
Source: Adapted from Suraya et al (2019)
The different roles of government for the social and market sector
Private
renting
Affordable
ownership
Asset
accumulation
To block the impact of
speculative activities
Served by the market sector
Government provides regulation for a competitive operating environment
for both consumers and producers of housing
Asset based welfare
Government secures/
provides funding
Social renting
Social ownership
Served by the social sector
Social rents Rent-to-income ratio House price to income
ratio
House Price Index
Graduation
The bigger picture: a sustainable housing policy that ensures decent shelter for all

31. Khazanah
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Social Housing Exit Policies:
A Case of `No Where To Go’?
Theebalakshmi Kunasekaran
31

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Findings from our case studies in PPRs
▪ Most are long-time residents. More
than 80% of households have lived in
the PPRs for at least five years.
▪ More than half are renters. Around
69% of the respondents are renters.
▪ More than 60% of household earns
less than the poverty line of RM2,208.
▪ 70% of PPR residents in KL were
ordered to relocate for
redevelopment, thus the filtration
process may not be based on the
income criteria.
▪ Most relocations occurred within
5.0km of their previous location,
allowing PPR residents to maintain
their jobs.
▪ PPR residents’ socio-economic
conurbation concentrated mostly in
places and amenities situated
within close vicinity of the complex.
▪ While the rental amount for PPR
unit remained at RM124 since
1998, house prices escalated
rapidly between 2009 to 2019
(CAGR 6.26). In the same period,
B40 mean incomes only rose at
CAGR of 4.72%.
▪ Using a ‘basic needs’ graduation
threshold, approximately 26% of
tenants may potentially be ready to
graduate from social housing.

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Is there a case of ‘nowhere to go’ for PPR residents?
Fewer than 3 private housing options with
monthly rental under RM500
<2.0 km
2.1 – 5.0
km
5.1 – 8.0
km
8.1 –
10.0 km
>10.1
km
Total
Kerinchi - - - - - 0
Wahyu &
Beringin
1 1 1 - - 3
Salak
Selatan
- - - 1 - 1
<2.0 km
2.1 – 5.0
km
5.1 – 8.0
km
8.1 – 10.0
km
>10.1 km Total
1 - 2 1 - 4
1 8 5 - - 14
3 2 2 3 3 13
a. Less than RM500 per month b. RM501 – RM1,000 per month
For rental between RM501 – RM1,000, numerous options
are available for PPR residents, but it may be financially
inaccessible. Means they have to accept rental amount of
between 2x – 7 x their existing rental amount
There are only a few affordable private rental options surrounding the PPRs, available for social housing exit
Number of private rental options surrounding the PPRs, by price range and distance to current PPR
Source: Adapted from KRI (2023)

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Transacted residential units near PPR Beringin and Wahyu
Analysis of transacted housing surrounding the PPRs
…appears to be unfavourable for prospective PPR graduates
CONFIDENTIAL & RESTRICTED
Proportion of sub-sale residential transactions nearby, by price range (2017-2018)
Note: Surrounding neighbourhoods include Jinjang, Kepong, Segambut and Sentul.
Source: Brickz and authors calculation
0 200 400 600 800
Townhouses
Terrace Houses
Service Residences
Condominiums
Bungalows
Terrace Houses
Service Residences
Condominiums
Cluster Houses
Bungalows
Apartments
Terrace Houses
Flats
Condominiums
Cluster Houses
Apartments
Flats
Apartments
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
<RM100k
RM100k – 300k
RM300k – 500k
RM500k – 1m
0 500 1,000 1,500 2,000
PPR: 700sqft
Generalized findings across all PPRs:
1. Eligible PPR households are only able to afford flats,
apartments or cluster homes. Using the median multiple
indicator, these are affordable units observed, regardless of
location.
2. These options do not provide more space than what the
households currently have in their existing PPR unit
3. There are restrictions and limitations for PPR
homeownership. PPR units are available for sale from RM35k
to RM42k with certain restrictions i.e. a 10-year moratorium and
a caveat lodged against its sale in the free market. It is a normal
condition under asset-based welfare however, it might be
detrimental to PPR homebuyers as they will not benefit from any
possible price escalation in the free market.
Median price (RM thousands) Median built-up size (sqft)
4.0%
6.6%
2.7%
33.1%
42.7%
35.7%
37.4%
44.1%
30.6%
25.5%
6.6%
31.0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
PPR Salak Selatan
PPR Kerinchi
PPR Beringin & Wahyu
<RM100k RM100k-RM300k RM300k-RM500k RM500k-RM1m
Source: Adapted from KRI (2023)
Source: KRI (2023)

35. Khazanah
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35
But PPR residents prefer to stay in social housing
PPR tenants
• 51% or 1,349 PPR tenants opted to stay in
their PPR units. Only 6% or 166 tenants said
will leave.
• Only 7.3% or 50 prospective PPR graduates
indicated that they would leave the PPR.
PPR owners
• 54% or 649 PPR owners opted to stay in their PPR
units.
• 5% or 61 owners indicated that they would leave the
PPR whereas the rest of the owners would only leave
the PPR under the right condition.
PPR residents' decision to move out, by current income range
58.9
52.9
52.5
49.6
49.6
47.2
45.4
42.6
49.2
0 10 20 30 40 50 60 70 80 90 100
<RM580
RM580 – 930
RM931 – <1.5k
RM1.5k – <2k
RM2k – <2.5k
RM2.5k – <3k
RM3k – <3.5k
RM3.5k – <4k
RM4k & above
0%
66.7
67.0
55.8
62.1
57.8
50.0
48.5
29.8
40.5
0 20 40 60 80 100
0%
■ ■ ■ ■ ■ ■ ■
Yes, will move
out
Depends on… No, will not
move out
…new rental
rate
…new
location
…new house
features
…new housing
administrator
…other
factors
Source: KRI (2023)

36. Khazanah
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Key Policy Options (PPR study)
Management of
PPR households
1. To utilize a filtration criteria of basic
needs approach for households into social
housing programmes. The eligibility criteria of
a standardized RM 3,000 should be revisited.
2. To create exit strategies that supports
household to find affordable homes - the
creation of a housing allowances system
to promote more options/choices in the
allocation of housing for graduating
households.
3. To utilize the Rental Tenancy Act as a
safeguard measure against the possibilities
of ‘rent hikes’ by the private sector due to
government housing vouchers.
4. To promote integrated housing
experience (as opposed to segregation of
poor households) and incentivize private
markets to provide affordable rents.
Management of
private housing stock
1. To conduct a National Housing
Survey to populate the housing
registry. This could be executed in
major cities where social housing is
required.
2. To conduct Building Condition
Surveys (BCS) to deliver good quality
housing for both the social and market
sector.
3. To set up an integrated rental
database to capture the supply and
rental rates of the private renting
market.
4. To monitor the general affordability
of housing prices and rents.
Source: Adapted from KRI (2023)
36

37. Khazanah
Research
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Concluding
Dr Suraya Ismail
37

38. DISCUSSING FINDINGS FROM OUR LATEST REPORT:
‘ResidentialSettlements
andSpatialInequality:
A Study of Greater Kuala
Lumpur Neighbourhoods’

39. Q&A Session

40. Khazanah
Research
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40
KRI Webinar
24AUG
DISCUSSING FINDINGS FROM OUR LATEST REPORT:
9.30AM – 11.00AM LIVE
THU
2023
- @KRInstitute
‘Residential Settlements and Spatial Inequality:
A Study of Greater Kuala Lumpur Neighbourhoods’
Sr Dr Suraya Ismail
Director of Research
Theebalakshmi
Kunasekaran
Research Associate
Puteri Marjan
Megat Muzafar
Research Associate
Adam Manaf
Mohamed Firouz
Research Associate
Gregory
Ho Wai Son
Research Associate
RICHPLACES
POORPLACES
Managing therealities
ofneighbourhoods