INTRODUCTIONThe First Malaysia Plan (1966-1970) officially introduced low-cost housing to “promote the welfare of the low-income population” (Planning Unit Economic [EPU ], 1965, p. 182), and implemented through the State with financial assistance from the Federal Government. Most of the low-cost housing was built to resettle squatter settlements in urban areas and for rental purposes during the First Malaya Plan (Aziz, 2007; EPU, 1965). As reported, Chief Minister Datuk Seri Musa Aman said about 38,000 squatter families are still occupying state government land and private land. Land supposedly used for economic development in Sabah, but squatters hinder the process. This shows that illegal settlements are still a big problem in Sabah and will bring a problem to property development in Sabah. Although there are various programs implemented by the Malaysian government together with the private sector to provide homes for low-income families, illegal settlements continue to grow. This problem is due to the inefficient allocation system. The problem of squatters in Sabah can be solved by providing more low-cost housing under PPR units through an efficient and transparent allocation system. BACKGROUND PARAGRAPH One of the main roles of MHLG is to create harmonious and better livelihoods for the society through the provision of adequate and adequate housing and must be equipped with social and recreational facilities. The government has decided that homes built by MHLG under the People's Housing Program (PPR) must be people-centric. Furthermore, MHLG must ensure that the poorest 40% of families, families earning less than RM2,500 a month and squatters, can live in permanent homes… middle of paper… intervention. in the allocation of low-cost housing which could jeopardize the chances of genuine buyers. With this new system, all states would use a standard application form to register for low-cost housing. in the absence of a centralized database, there would be a possibility that a person could register in more than one state and therefore could purchase more than one unit of low-cost home in a few different states. (Wan Nor Azriyati and Nor Rosly Hanif, 2005) stated that few low-cost home buyers rent the homes or sell them immediately after purchasing them. This behavior may lead to an insufficient supply of low-cost homes because the same buyers could re-register with the ORS. The existence of speculative buyers is considered a constraint on the control of ownership of low-cost units which would presumably be held only by the designated person.