Do you think PR1MA should be dissolved? Let’s look at 5 reasons why it failed

How PR1MA went from a noble aspiration to provide affordable housing to a colossal failure.

Prima-Bagan-Serai

© HAZIM MOHAMMAD | Bernama Images

Just last week, it was announced in the media that Perbadanan PR1MA Malaysia, a public housing agency which was established under the Barisan Nasional government may be dissolved as it is in a “mess”. The final decision on whether PR1MA projects should be continued is pending a due diligence report, which is expected to be completed in June 2019. The cabinet will then make 

For years, the PR1MA initiative has received lashbacks from various stakeholders and the general public for its inefficient implementation. 

The old government initially promised to build 1 million PR1MA homes by 2020. As of August 2018, only a dismal 1.6% or 16,682 homes have been built in the last five years.

I recall researching about PR1MA when I was writing my second book.  The 1Malaysia People’s Housing Programme or PR1MA was launched in July 2011 and incorporated under the PR1MA Act in 2012. It became operational in March 2013 and to qualify, applicants will need to have a single or combined household income of between RM2,500 to RM15,000 per month.

I couldn’t help thinking how the hoopla around an announced PR1MA initiative usually fizzles out after some time, with no proper project updates disseminated to the public. 

For instance, under Budget 2016 that the government promised that it will build 5,000 units of houses under PR1MA and 1Malaysia Civil Servants Housing Programme (PPA1M) in 10 locations in the vicinities of light rail transit and monorail stations, including in Pandan Jaya, Sentul and Titiwangsa.

However, a quick check on PR1MA’s website does not show any such projects except for one in Brickfields, Fraser Business Park and Bukit Jalil respectively. In addition, my interviews with young Malaysians while taking Grab and Uber show a great mismatch in what the government is saying – where many had said they had applied for the housing scheme, but they have yet to receive any official reply from PR1MA.

Here are some circumstances that may have led to PR1MA’s failure.

#1 Lack of single housing agency to manage the affordable housing market

Affordable homes located near the Cochrane MRT station. © Khalil Adis Consultancy.

Unlike Singapore which has the Housing & Development Board (HDB) to oversee the affordable housing segment, in Malaysia, there are many agencies rolling it out under the federal and state umbrellas.

From federal-led initiatives like PR1MA and Residensi Wilayah (RUMAWIP) to state-led schemes like Rumah Mampu Biaya Johor (RMBJ) and Rumah Selangorku, this not only confuses the public but leads to inefficient use of public resources competing for the same market.

What would work in my opinion is to have a single housing agency to streamline the entire process across the nation. This could also allow the agency to gauge demand from the public via available government data. In addition, this will allow them to allocate land according to demand to ensure that they are successfully balloted and fully taken up like the Singapore model.

The Ministry of Housing and Local Government had studied the HDB model last year and is reportedly looking to emulate it.

#2 Federal versus state government complicates matters

In Malaysia, land is a state matter. Therefore, federal-initiated programmes like PR1MA will likely face bureaucratic red tapes and are less likely to receive priority when applying for the release of state land.​

YB Zuraida Kamaruddin, Minister of Housing and Local Government (KPKT) recently shared that it is the responsibility of the state governments to offer up their spacious lands for the development of affordable housing. However, as of end 2018, only 27 plot of lands out of the total 127 for affordable housing projects around the country were supplied by state governments.

Let’s not forget that the state and federal governments may have different objectives which can further complicate matters.

#3 Costly to acquire land

© Kratobb | Getty Images

Considering the challenge in securing land from respective state governments, the federal government would then have to acquire them from private parties at a hefty cost.

As land cost takes up a significant percentage of a project’s cost, this will inevitably drive up the cost of building affordable homes.

Thus, it is hardly surprising that previous PR1Ma projects were mostly built in undesirable locations, where homebuyer demand is low.

#4 Far-flung project locations with sub-par connectivity

One of the common grouses about PR1MA is the project’s far-flung location away from the city or public transportation.

With the exception of the homes within KL mentioned earlier, most of PR1MA’s housing projects are inaccessible and will require applicants to own a car. This then defeats the purpose of building affordable homes as most of the applicants will be financially burdened with the double whammy of a car and home loan.

Given Malaysia’s patchy connectivity and lack of seamless connection to public transport, this makes some of PR1MA’s projects highly unpopular.

#5 Some applicants were left in the dark

Prima-homes-affordable

© MUHAMMAD HAZIM IZAM | Bernama Images

The applicants are the most important stakeholders for PR1MA. As such, communication ought to be handled in a more diligent manner.

Many young Malaysians I had spoken to said they did not receive any form of acknowledgement on the status of their application. Some have been waiting for more than five years and are still waiting.

I had highlighted this at a panel discussion but a representative from PR1MA replied that this wasn’t true. Perhaps, she had her own reasons as this was during Najib Razak’s era.

Looking back, if this wasn’t the case, surely PR1MA would not be in its current position right now. In addition, it would certainly help if PR1MA were to address these issues head-on to reassure applicants.

Whether or not PR1MA will be dissolved remains to be seen. However, PR1MA is already costing Malaysian taxpayers more than RM8 billion.

Edited by Reena Kaur Bhatt

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