Press Releases

Cease the deliberate distortion of Penang Institute reports for political gain.

Press Statement by Zairil Khir Johari, CEO of Penang Institute
George Town
9 December 2012

Once again, the Penang Institute has become a victim of distorted reporting when a Bernama report carried by The Star Online dated 8 December 2012 stated that: “A study by Penang Institute, the organisation which undertakes planning for the state government, stated that those earning below RM2,700 would not be able to afford homes on the island by 2014.”

The article goes on to quote BN Penang Chairman Teng Chang Yeow as saying that it “is frightening but the government of the opposition coalition in the state does not have a policy to overcome the problem.”

The conclusion arrived at in the news report is misleading because it does not place the Penang Institute study in its proper context. Our October 2011 paper titled “Housing market trends and affordability” actually hypothesises that lower-middle income groups on the island will face housing affordability issues based on the assumption of three important considerations: trends in housing price inflation, trends in wage rate inflation and more importantly, if no action is taken to address the housing issue. None of these considerations were mentioned in the news reports.

Furthermore, extensive research by the Penang Institute has found that the housing problem in Penang is in large part due to a legacy of failed housing policy over several decades, in which planning and policy were arbitrarily implemented without any understanding of the needs of the market and without regard for demographic changes. This has resulted in pockets of gaps all over the state due to supply not matching demand.

However, while private property prices and wages are beyond the state’s influence, the Penang Institute is pleased to note that the Penang state government has been responsive not only by recognising the issue but also by taking measures to address it.

The Penang state government has in recent times set up a RM500 million affordable housing fund as well as committed to building 18,000 units of affordable homes, including more than a thousand homes on nine acres along Jalan SP Chelliah in the heart of George Town to cater for the housing needs of the lower and middle income groups. Also in the pipeline are 12,000 units of affordable homes that will be designed by leading international consultant, Surbana (formerly known as HDB Corporation).

It is therefore clear that the state government of Penang has taken proactive steps including engaging the Penang Institute to conduct more thorough research on the housing issue in order to formulate evidence-based policy that will address the housing gaps in the state in a more nuanced and holistic manner. Hence, accusations that the state government has no policy to deal with the issue are baseless and ignorant of the many measures taken.

The Penang Institute therefore regrets the actions of certain quarters in quoting our studies out of its proper context, and hopes that such deliberate distortions for political gains will cease immediately.