Affordable housing alternatives in George Town:

Affordable housing is vital in ensuring the inclusiveness of a city. However, urbanization and gentrification have exacerbated the gap between housing availability and housing affordability. Many factors have contributed to the displacement of local communities in George Town World Heritage Site (GTWHS), with rental spike and the repeal of the Control of Rent Act, among others. Through a survey with 318 samples, this study investigates affordable housing alternatives and their administration in GTWHS of Penang state, Malaysia. Policy recommendations are suggested to improve the diversity of affordable housing options and to conserve the historic city’s intangible living heritage.

Urbanization and gentrification processes are common phenomena in cities, historic cities notwithstanding. Today, cities produce about 80% of the world’s GDP. UN-Habitat (2016) points out that, while urbanization and gentrification processes brought in positive impacts such as advanced economic prosperity and quality of life, driving innovation and productivity, alleviating poverty and the convenience of living in cities, it creates negative effects too, such as increased residency in slums and housing speculation, exclusion and rising inequality, and challenges in providing urban services. Some scholars opine that the absolute force of urbanization might depreciate the quality and uniqueness of a city (Wang and Prominski 2016), a historic city with its special features especially.

George Town World Heritage Site (GTWHS) of Penang state in Malaysia is acknowledged for its intangible living heritage—a historic multiethnic community that includes traditional traders, craftsmen, and other multicultural activities. However, due to spiking house prices and the declining population (Ferrarese 2018; Khazanah Research Institute 2017; Lee, Barker, and Lam 2016; Think City 2021), GTWHS is now facing the challenges of conserving its intangible living heritage and hence the possible risk of eroding the city’s special features that accorded the site for UNESCO inscription back in 2008. The study seeks to explore the abovementioned affordable housing issues in GTWHS and the inclusiveness of (affordable) housing governance and administration from the local community perspective.

This policy article starts with a brief discussion on the concepts of participatory governance (inclusiveness of housing governance and administration), the 30-percent of-income housing cost burden standard, housing issues in GTWHS, relevant legislations, Penang state’s affordable housing scheme, and its political context. It then is followed by the findings and discussion of a research project on the issues. The policy article concludes with suggestions to improve affordable housing alternatives and its governance and administrative policy for historic cities.

The main data was collected through a 318-sample-size survey using a systematic random sampling method in the core zone and buffer zone of GTWHS. The survey is complemented by in-depth interviews with five key informants who have extensive knowledge and experience of GTWHS to explore further themes raised in the survey. These five key informants comprised a housing expert, an elected representative of the GTWHS constituency, a chief operating officer (housing) of the state think tank, a vice president of a heritage preservation NGO, and the chief consultant of a private heritage organization. Respectively they are referred to as K1, K2, K3, K4, and K5 throughout this article. Data was collected in stages from March 2020 to June 2021.

Participatory governance is grounded in participatory democracy which emphasizes democratic engagement among stakeholders (Fischer 2015; Speer 2012). The exercise of a participatory governance mechanism encourages direct involvement of the public/stakeholders through consultation and deliberation. United Nations agencies see democratic practice (public participation) as one of the key components of good governance (UN-Habitat 2016).

Housing is the foundation layer of Maslow’s hierarchy of needs. Even though not without disputes, many scholars and practitioners use housing cost burden to gauge housing affordability. The key factor that determines this housing affordability is the household’s disposable income. Conventionally, housing is seen as affordable if it is within the 30-percent-of-income housing cost burden standard. Families that spend more than 40% of their income on housing are considered overburdened by housing costs (JCHS 2020; OECD 2021).