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In Peninsular Malaysia there is a stock of public sector housing for the low income group popularly known as low cost housing units which have been built over the last three decades. It is common for the owners-occu piers, through their own initiatives and efforts, to alter or to extend these houses so as to improve their housing conditions and at the same time to meet the developing needs of the households. This research aims to identify explanations for the phenomenon of owner-initiated transformation of public sector low cost housing particularly in the urban communities of Malaysia. It seeks to further knowledge on transformation from the owners-occupiers point of view, which expresses the need to be realistic of what they can afford when carrying out the transformations. This transformation activity has been slowly recognised as a form of housing supply for low income households and their tenants. Owner-occupiers exhibit a wide range of characteristics and motives for transforming these low cost houses. They may be grouped into two broad categories, that is, those primarily seeking to have an extra space for the household and those more concerned with the house as an economic investment. Transformation is generally carried out to at least the standard of the original dwelling. Where there is plenty of extra space available, the scale and cost of transformation is quite extensive. There are lessons to be learnt from looking at the characteristics of the transformed housing estates. Professionals and other actors in the housing field should acknowledge that, whatever planning provisions and housing designs are laid out by the authority, public sector housing for the low income group will inevitably and continuously undergo a process of transformation with or without government financial backing in order to meet the households' developing needs. This gradual shelter improvement among the low income households in the urban communities of developing countries contributes to the improvement of housing quality and increases the existing national housing stock.

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