But many residents of the languid 120ha neighbourhood, known for its unique Malay-only land-ownership and proud sense of identity, won’t budge.
“Do you want to live in the squalid conditions your grandparents did 50 years ago?” said an exasperated Mr Affendi Zahari, head of a government entity tasked with spurring the redevelopment.
British colonisers, mindful of balancing Malaysia’s competing ethnicities, set aside Kampung Baru (“New Village”) in 1900 for members of the typically rural Muslim ethnic Malay majority to prevent the industrious Chinese minority dominating the then fast-growing city.
Kampung Baru experienced some of the deadly Malay-Chinese ethnic strife the capital faced in 1969 and its residents participated in huge demonstrations for political reform in the late 1990s.
But as Chinese-fuelled development raised the skyline higher, Kampung Baru remains essentially a country village, the symbolic heart of Kuala Lumpur’s Malay identity.
Its weathered wooden homes are packed in along narrow, maze-like, rain-puddled lanes clogged with parked cars and shaded by overgrown mango and frangipani trees.
On most corners, traditional open-air eateries pile high foods like spicy fried chicken, curries and banana fritters, as grilled fish sizzles over coals and longtime neighbours discuss the news.
Ms Hashimah Yun’s grandparents scraped together enough money to buy a plot well before Malaysia’s independence in 1957.
The modest original house gradually expanded into a sprawling, ramshackle home for a dozens-strong extended family that has priceless emotional and cultural value, she said.
“My grandparents opened this land with their blood and money. We won’t sell at any price,” said Ms Hashimah, a feisty 56-year-old retired bank employee, her head swaddled in a green headscarf.
A government master plan, however, would jerk Kampung Baru, whose land is estimated to be worth over US$1 billion, into the 21st century.
The futuristic proposals include glass-and-steel developments fusing hotels, modern apartments, parks, pedestrian walkways, even a man-made lake.
The scheme is part of a larger facelift for Kuala Lumpur, already one of South-east Asia’s more modern capitals, to remain attractive for investors as regional competition increases.
Upcoming billion-dollar projects include a new financial district, a city-wide mass transit system, high-speed rail links to Singapore, and a 630m skyscraper that would outstretch the Petronas Towers by 180m.
Last October, Prime Minister Najib Razak appealed to Kampung Baru’s people to embrace change or risk being viewed as “squatters”.
Malay developers are offering residents around RM500 per square foot for land, sharply lower than prices in nearby areas due to Kampung Baru’s lack of modern infrastructure.
Officials say progress has been negligible.
With land prices rising rapidly in Malaysia, Ms Hashimah fears her family would struggle to stay together elsewhere.
Like others, she called instead for government investment in Kampung Baru’s decrepit infrastructure to improve resident’s lives, and suggested that intentional neglect was aimed at driving landowners away.
They want to “grab our land, chase us out and make money”, she said.
As a cautionary tale, many locals cite a 1980s debacle in which some residents lost their land when a developer’s plans went bust.
Mr Chan Wai Seen of JS Valuers Research & Consultancy said Kampung Baru’s unbeatable location offers tantalising potential, but unlocking it is a challenge.
Hurdles include the poor infrastructure, rising costs of land and construction, a slowing economy, and the Malay-only ownership, he said.
“We need to ask just how competitive Kampung Baru will really be,” Mr Chan said.
The government is leaving Mr Affendi to try to facilitate private deals rather than wade in directly, wary of angering locals.
A trickle of landowners have sold in recent years, but momentum is further constrained by the fact that many of the thousands of parcels are jointly held by several owners, complicating deal-making.
“It’s a tough process,” lamented Mr Affendi, tacitly admitting that Kampung Baru’s village-in-the-city atmosphere will survive for the time being.