Malaysia’s home ownership agenda has always focused on access to affordable and quality housing for the citizen and this is manifested in the numerous Malaysia Plans. Since the establishment of the Ministry of Housing and Local Government in 1964 and the emphasis on housing provision for the low income group in the 1st Malaysia Plan, the country never looked back and grew from strength to strength with continuous programmes being introduced in its mission to house the nation in an adequate and equitable manner.

The lower income group has been the pulse of the social housing programmes since the very 1st Malaysia Plan where the Federal Government started to fund State Governments with loans to develop low cost housing with selling price at between RM8,000 to RM12,000. Various government agencies were also involved directly in providing the low cost housing through state economic development agencies. For land settlers, the Ministry of Rural and Regional Development as well as pertinent land and regional development agencies have all played their roles in providing low cost housing.

Private developers are not always keen to build low-cost housing due to cost of subsidies. For developers, housing development is a business undertaking, which with all the potential for profit, is also fraught with risks. It is therefore quite impractical to expect any private developer to absorb fully the subsidies involved in the construction of low cost houses. As a result, the subsidy required for the low cost houses has to be partially covered through the pricing of the non low-cost houses in any development scheme. The increased in construction cost has also made cross-subsidy model for provision of low cost housing unattainable.