Rent allowance needs income, market, and placement formula

Urban rent allowances must be guided by a '3P' approach, income, market, and placement, to ensure government aid genuinely assists B40 and M40 groups struggling with the cost of living, according to an economics analyst.

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Yes, it's mandatory. Otherwise, this policy will leak and not reach those who are eligible.

Associate Professor Dr. Aimi Zulhazmi Abdul Rashid from Universiti Kuala Lumpur (UniKL) emphasized the need for clear criteria to prevent leakage and guarantee aid reaches the intended recipients. He stated that this approach would allow the government to consider household capacity, rental rates, and cost variations by location. "Yes, it's mandatory. Otherwise, this policy will leak and not reach those who are eligible," he told Utusan Malaysia.

Dr. Aimi suggested that data from the Central Database (PADU) and the Inland Revenue Board (LHDN) could be utilized to identify urban M40 and B40 groups in genuine need of assistance. He argued against uniform income thresholds, noting significant differences in living costs and rental prices across states. "Income thresholds should not be set uniformly because the cost of living and rental rates vary by state," he explained.

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Income thresholds should not be set uniformly because the cost of living and rental rates vary by state.

Furthermore, Dr. Aimi proposed that the government could subsidize between 30% and 50% of rental costs, setting location-specific maximums to discourage tenants from choosing overly expensive housing. "For example, a ceiling of RM500 in Kuala Lumpur and RM350 in Johor Bahru. The rental costs in Kuala Lumpur and Alor Setar are vastly different, so there needs to be an allowance zone to make the assistance relevant," he said.

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For example, a ceiling of RM500 in Kuala Lumpur and RM350 in Johor Bahru. The rental costs in Kuala Lumpur and Alor Setar are vastly different, so there needs to be an allowance zone to make the assistance relevant.

To prevent landlords from exploiting the system by increasing rents, Dr. Aimi advised that rental agreements should be mandatory, registered through a portal managed by the Ministry of Housing and Local Government (KPKT) or LHDN. This would enable the government to monitor unreasonable rent hikes. "The government also needs to set a ceiling for eligible rent or a reference rent rate according to location. If a landlord increases the rent beyond that level, the tenant will not be eligible for the full allowance. This will curb excessive increases," he added.

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The government also needs to set a ceiling for eligible rent or a reference rent rate according to location. If a landlord increases the rent beyond that level, the tenant will not be eligible for the full allowance. This will curb excessive increases.