The Penang government will hold full public consultation and get feedback before implementing a proposal to reinstitute rent control and restrictions regarding pre-war shophouses within the George Town heritage site.

Chief Minister Lim Guan Eng said the state is mindful of the existing legal quagmire.

"Whilst we sort out the legal intricacies whether the state has legal authority to do so now after vacating our powers then, or whether we need to petition to the federal government to act on our behalf, there is a need for a prior consensus as much as we can possibly arrive at, amongst all stakeholders," he said.

"State executive councillors Chow Kon Yeow will handle the public consultation and feedback whilst Jagdeep Singh Deo will handle the legal issues," he added during the launching ceremony for George Town Heritage Celebrations at the Armenian Park.

His speech was in conjunction with the 8th anniversary of George Town’s inscription as a Unesco world heritage site today, also a public holiday in Penang.

Lim noted that while rent restriction is a state power under Schedule 9 of the Federal Constitution, the federal government had invoked Article 76(4) to abolish the Rent Control Act in 1997 to ensure uniformity of laws in Malaysia.

He recalled in the 90s, all states including Penang, had assented and surrendered their powers to the federal government to abolish rent restriction to let market forces decide.

Lim's call comes following the state government's proposed legislation to reinstitute a version of rent control or restriction of pre-war shophouses within the George Town Heritage site to prevent gentrification, such that original inhabitants are not driven out by high rents.

"Whilst we respect property owners’ rights, owners of such heritage pre-war shophouses within the heritage enclave have a special responsibility to ensure the living heritage can continue to exist," Lim said.

The state's proposal for rent restriction comes in the wake of complaints from local businesses and traditional traders who could no longer afford the astronomical rent rates.

Such traders were eventually forced to exit their businesses due to escalating rents, from an affordable rate of RM500 to RM1,000 monthly, pre-2008, before it was bestowed Unesco world heritage status. Rents are now at at a prohibitive rate, between RM6,000 to RM10,000.