The Malay Reservation Area (MRA) is a familiar but complex subject that elicits considerable public interest, in particular the potential for developing Kampong Baru into a modern commercial area because of its location within the City Centre. Although a few development plans have been prepared for the MRAs, to date, little progress has been achieved and the issue on slow development process of the MRAs.
Legal restrictions imposed on property and the land ownership are the major factors that have reduced the financing potential and the marketability of these areas. Other constraints include the lack of capacity of individual owners to develop their properties and the absence of clear implementation programmes.
The current situation of the MRAs is that the MRAs were originally conceived and planned as traditional villages comprising individual dwelling units with associated lands sufficient to provide agricultural smallholdings. This explains the relatively small lot sizes in these areas. As the City has grown, the MRAs which were originally located on the outskirts of the City have become surrounded by urban development, none more so than Kampong Bharu which is now completely within the City Centre. Consequently, many of the original buildings and settlements are no longer compatible with their surroundings.
While Kampong Baru, Kampong Datok Keramat and Selayang are well laid out with internal roads, utilities and community facilities, Gombak, Segambut and Kampong Sungai Penchala have retained their original agricultural sub-divisions and have consequently developed in a haphazard manner. In term of land usage, the MRAs are essentially residential although almost 40 percent of Segambut and Kampong Sungai Penchala, mainly the hilly areas, are still undeveloped or used for agricultural purposes. Kampong Baru and Kampong Datok Keramat are also the most developed among the MRAs, followed by Gombak, Kampong Sungai Penchala and Segambut. In the case of Selayang, owing to its condition as ex-mining land, only a small portion has been developed. Generally, the changes that have taken place in the MRAs over the last 15 years have been minimal.
Kampung Datuk Keramat
Ad-hoc additions and alterations have been carried out to existing buildings. To cater for the growth of extended families, single dwellings have been converted to multiple dwelling units. In addition dwellings have been converted to incorporate shops, workshops and light industries which are incompatible with the residential component. Buildings have been also extended to occupy the full extent of their sites leaving little or no room for setback area. These haphazard developments have resulted in substandard living conditions.
Under the existing law, only Malay individuals and the so-called "Malay institutions" (as described in the law) can enter into dealings affecting MRL. "Dealings" refer to sale and transfers, leases, charges, liens and easements. Non-Malays are also not allowed to caveat MRL nor take them under attachments. A number of financial institutions in the country have earned their "Malay" status (for purposes of the law), but unfortunately for the MRL owners, not all banks have done that. It is common knowledge that many banks, even those classified as "Malay" for the purposes of the law, are not particularly keen in accepting MRL as collateral for loans.
Apart from the question of land values (which are dependent on market forces), banks feel that when foreclosure proceedings are contemplated against defaulting borrowers, it will be difficult to find bidders for such property.
As a natural resource, land is becoming increasingly scarce, therefore become crucial "to guarantee continued Malay land ownership, especially in urban areas, to prevent Malays from being marginalised in their own land". Thus, Malay Reservation Land, wakaf land, customary land, ancestral land and agricultural land too "must not be left untended". Instead, they should be developed to create value and higher economic returns. issue, but I have only good intentions. What we can say for now is that the Malays are bogged down by lack of capital.
Meanwhile, the MRL owners continue to face a basketful of problems of :-
Lower land value when compared with non-MRL in the same vicinity. This is due to its lower marketability’;
Restricted access to credit as not all banks can take MRL land as security. Even if they can, many are not willing to do so;
Lack of incentives to develop MRL and in some cases, there are glaring disincentives;
Location and infrastructure issues, for many of MRL sites are in areas where infrastructures and services are either minimal or non-existent; and
Multiple ownerships and size issues. Many MRL plots have multiple owners, while some are of uneconomic size for cultivation or development.
Many MRL plots are situated in areas that continue to be overlooked and neglected, even 54 years after Merdeka. They are untouched by development simply because infrastructure such as roads, electricity, water and other public services are either minimal or non-existent. But for those who still believe that MRL cannot be developed and properties built on MRL cannot fetch a high price, just take a trip to a couple of upmarket housing projects in the vicinity of Sungai Penchala in Selangor's Klang Valley. This might give some idea to the developer who believed that they can turn constraints into opportunity!!