BRE 217

2019-20
Planning and

BRE217
Development

Lecture 7
Urban Renewal

Yi Sun l Email: yi.sun@polyu.edu.hk

Department of Building and Real Estate│ The Hong Kong Polytechnic University
 CONTENTS

§ Urban Renewal

§ Land Development Corporation

§ Point-line-plain

Learning outcomes:
• Explain the background for urban renewal in Hong Kong
• Understand the development pathways and evolution of urban
renewal in Hong Kong
• Critically reflect on the pros and cons of urban renewal project with
particular reference to various expectations of people and ways of
livelihood.
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Previous Lecture
• R+P
• TOD
• BOT
• Small House (Ding rights and Ding house)

3
Urban Renewal
Urban problems
• Increasing environmental pollution, congestion and
crime
• Deterioration and obsolescence of existing real
property
• Rising property vacancy and unattractive property
returns (due to demands side change)
• Enormous outflow of wealthier households
• Inflow of migrants
• Growing social and/or ethnical inequalities
• Social unrest, confrontation and conflicts
5
Urban renewal – early years
• From 1960 to 1980s: by small initiatives
• Small scale redevelopment
• Often led by the Hong Kong Housing Society
• Provided about 1,000 units in 1960s, 1970s

6
• But by 1980s, Hong Kong’s urban
development showing issues
• Neglect of older buildings: ownership
complexity
• Urban planning – lack of open space; lack of
community facilities

7
• Idea of using urban redevelopment, or
urban renewal to
• Increase plot ratios –more housing on same
land
• Reduce need for reclamation
• Replace decaying older buildings
• Better urban planning

8
• Still, many issues:
• Multiple ownership –many people own existing
units
• High acquisition costs –high $$ to acquire
existing units
• Rehousing–difficulty in re-locating existing
residents

• Limits potential for urban renewal

• Small number of development projects on
small sites

9
• In 1987, the Land Development Corporation
Ordinance (LDCO) was enacted
• Subsequently, the Land Development Corporation (LDC)
was established

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Land Development Corporation
(1988-2000)
The Center, Central Langham Place, Mong Kok

Grand Millennium Plaza,

Sheung Wan

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• Land Development Corporation (LDC) founded in
1988
• First attempt at a comprehensive urban renewal
government authority
• Building-oriented redevelopment

• Promote a stronger role for private sector in urban

renewal

• LDC incorporates both public and private sectors

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Six objectives set by the Hong Kong
Government:

1. To improve the quality and economic benefits of urban

redevelopment by assembling larger sites.
2. To ensure equitable treatment of tenants affected.
3. To improve community facilities, including better traffic
circulation.
4. To encourage participation of landowners in the
development process.
5. To speed up private sector development in certain
areas.
6. To minimise the need for direct government subsidies
and the application of compulsory acquisition powers.
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• Started with HK$31 million loan
• Need to repay interest

• Completed 16 projects in 12 years

• 2.8 Hectares of land
• 1,104 flats
• 269,676 m2 of office/commercial space

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A failure?
• Only achieved 0.5% of its target for redevelopment
(supposed to be 950 hectares)

• Residents not involved until project implementation

• Plans already made by LDC
• Residents not informed until time to compensate to purchase
their flats

• Higher compensation for vacant flats

• Landlords drive out tenants to get more $$ from LDC

• High community disruption

• Shops, businesses closed because compensation $ from
LDC not high enough to re-open
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• Fragmentated community landscapes
“most of the low-rise buildings have already been
redeveloped, often in a piecemeal manner without
achieving improvements to layouts, transport networks,
community facilities and services”

• Development opportunities reduced, harder to

assemble 10-15 storey buildings

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The Need for Change
• Asian Financial Crisis in 1990s hurts housing market
• Insufficient resources to resettle affected residents/owners

• Government surveys all buildings in 1992

• 1% (1,472) in “very dangerous state”
• 36% (5,299) in “suspect condition”
• But in 10 years time (i.e. 2002), number will increase
dramatically as more than 50% of buildings will be more
than 50 years old

• Need stronger redevelopment

• More citizen-oriented –more successful, less conflict

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• Government reviews urban renewal policy in 1995
• One outcome is to set up the Urban Renewal Authority
(URA) to replace the Land Development Corporation

• Major reasons for setting up the URA to replace LDC1

• Scarcity of sites for profitable redevelopment
• Lengthy land assembly process
• Inadequate re-housing resources
• Instead of individual buildings, conservation of the
whole street, whole area or whole district should be
considered.

1 LegCo, 2000. Report of the Subcommittee to study the Urban Renewal Authority White Bill
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Urban Renewal Authority
(since 2000)
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 5Rs strategy by URA
• To accelerate Redevelopment by replacing old buildings with new to
provide a better living environment and neighbourhood;

• To enable and encourage the Rehabilitation of dilapidated buildings

to prevent urban decay;

• To pReserve by maintaining and restoring buildings of historical and

architectural value, and to sustain local characteristics;

• To Revitalise through enhancing and strengthening the socio-

economic and environmental fabric for the benefit of our urban
communities;

• To assist owners to upgrade the buildings through Retrofitting of

facilities which meet the modern standard (Launched in 2017)

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Successes of URA Approach
• Many projects have been completed
• 66 total redevelopment projects
• 2 preservation projects
• 1 revitalization project

• 69 completed
• 19,950 new flats
• 423,000 m2 of commercial space
• 54,000 m2 of government/community use
• 28,000 m2 of open space
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• Typically large-scale redevelopment
• Assemble flats in many buildings over several small blocks
• Combine into a larger “superblock” project

• Process
• Identify a site
• Conduct a “freezing survey” to see who lives in the site
• Conduct social impact assessment –propose mitigation
measures
• Hear objections and appeals via Town Planning Board
• Compensate owners for their properties
• Demolish site, Reconstruct
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• URA published the Urban Renewal Strategy (URS)
in 2001
• “project centred” –a 20-year-strategy
• 200 new URA projects
• 25 uncompleted projects from the LDC

• URA was injected with HK$10 billion in start-up

funds

• Be self-sufficient – it has to make profit

• Supported by the Government through waiver of

land premia for redevelopment sites.
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URA strategy 2001
• Target:
• Redevelopment of 2,000 aging or dilapidated/decaying
buildings
• Improvement of environmental quality of 67 hectares of
redevelopment
• Rehousing 27,000 tenant households
• Provision of 60,000 m2 of open space
• Provision of 90,000 m2 of space for community use
• Provision of 7 new schools

• Residents not involved in selecting URA sites –still

top-down process
• i.e. URA selects sites to redevelop, then tells community

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Grahmam Street: importance of
culture and people
• Peel Street / Graham Street Development
Scheme started from 2007

• to demolish several city blocks of old tong

lau on Graham Street (Chinese: 嘉咸街)
and Peel Street (Chinese: 卑利街), replacing
them with a $3.8 billion scheme comprising
four high-rises: two residential blocks, one
office tower, and a hotel.
• Some 360 property owners and 1,120
residents in 37 existing buildings, built from
the pre-war years to the 1960s, have been
affected.
• In the process the URA plans to also evict the
oldest wet market in the city, founded 1841.
• The plan was submitted to and approved by
the Town Planning Board in early 2007.
27
• The Central and Western Concern Group, a coalition of ten
community groups, pointed out that the destruction of the
market, a tourist attraction, would "bring its rich and
dynamic history to an end”
• ....the cost of relocation, the emotional attachment they
held to the longstanding marketplace and the loss of their
customer base.
• 2007 and 2008: A Graham Street Market Festival to
showcase the "cultural treasures and unique features" of
the market with the aim of encouraging the government to
"rethink its town planning policy".

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• URA promised the redevelopment would incorporate
an "old shops street" so as to "bring back the old
charm and streetscapes".
• The Central and Western Concern Group called the
plan "artificial" given that such an environment
already exists, and that the so-called "decorated
stage" would take too long to build.
• URA also promised to build a two-storey wet market
complex on a lot labelled "site B" to house the
displaced vendors.
• ... criticised as the proposed building would
accommodate fewer than half the vendors currently
operating in the area.
• By 2013, though vendors had been served eviction
notices, no wet market had been constructed.
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URA strategy 2011 (people first)
• In 2011, the Government renew the Urban Renewal Strategy
• “people first, district-based, public participatory” approach
• Set up “District Urban Renewal Forum” (DURF)
• Set up Urban Renewal Trust Fund for DURF
• District-based redevelopment

• Amongst 200 planned projects from the previous URS, only

16 have been announced and commenced
• No longer imposes the remaining 184 undisclosed projects
• Future redevelopment projects will be identified taking into
account the advice of DURF

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• First pilot DURF established in the Kowloon City
District in 2011
• Formulate the Urban Renewal Plan (URP)
• Taking account of actual local characteristics
• Conduct broad-based public engagement activities and
planning related studies, including social impact
assessments

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Redevelopment Projects under the
District-based Approach
• Six projects launched under the district-based approach in To
Kwa Wan cover project sites totaling more than 2 hectares by
area have affected an estimated total of 2,730 households.

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Difference between LDC and the URA

• URA has better planning power

• LDC had to undertake lengthy negotiations with

landowners
• Presented difficulties reaching settlement agreements
• Had to present a fair price
• Any dissenting landowners could slow or stop
redevelopment projects

• URA can resume or take land –offer fair market value

and expropriate
• Speed up project implementation

34
• However, there are special cases in land resumption for
redevelopment
• Owner of illegal structure apply for adverse possession
• Lengthy judicial review

• Kwun Tong Town Centre Project from 2008

35
New development contexts for
URA
• Development context
• Double-aging issue
• Housing affordability
• Population growth

• Building quality
• At present –16,000 buildings over 30 years old
• Will grow 4x by 2030

• Ageing building stock provides problems

• E.g. Ma Tau Wai Road, 2010

• How to balance need between profits and community?

36
• Development context
• Double-aging issue
• Housing affordability
• Population growth

• But also building quality

• At present –16,000 buildings over 30 years old
• Will grow 4x by 2030

• Aging building stock provides problems

• E.g. Ma Tau Wai Road, 2010
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Challenges of URA Approach
• Transparency of the URA operations
• Self-financing principle
• Low level of compensation
• Resettlement of residents in the same district
particularly the old people
• The partnership between the URA and developers
strengthen the alleged image of “interest transfer”
• URA assembles land and sell it to private developers
• Violates cardinal principle: resume land for a public purpose

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"Starter Homes" Pilot Scheme for Hong Kong Residents

• Redeveloped collapsed buildings at Ma

Tau Wai Road to ‘eResidence’ (煥然懿居)
by URA
• Helping the Government test out the
“Starter Homes“(首置) concept and
mechanism
• 450 units for resettlement
• Sold at 38% off
• Prohibited from selling or letting at
the first 5 years
• Allow to sell or let by paying premium
to the URA after the first five years.

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Flat-for-Flat (FFF) Scheme
• Can select 'in-situ' flats in the future new
development or flats in an FFF Scheme to be
developed by the URA in the same district

• An alternative option to cash compensation

• Kai Tak Development in 2012

• De Novo (煥然壹居)
• Sold at 20% off
• Low Participation rate = 0.4%
• Only 8 owners

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• Pricing mechanism follows private housing market

• After deducting the compensation paid by the URA,

the owner need to pay extra to buy the property
• Residents living in old flats are usually not rich
• Older persons are unable to get the mortgage

42
Demand-led Redevelopment Project
Pilot Scheme (Suspended in 2017)
• As an implementer
• Initiate a redevelopment project on its own, or
• Respond to a request from building owners.
• Owner-initiated

• Selection criteria for application

• ≥80% of owners jointly submit the application;
• Site under application should be ≥ 700 m2;
• Condition of the buildings are identified as "varied" or "poor";
• Without historical, architectural or cultural buildings/structures
• Available resources from URA to commence and implement
the project within a reasonably short period of time

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• High application threshold
• Require support from ≥ 80% of owners

• Limited scope of demand-led projects

• ‘toothpick’ building instead of large-scale redevelopment

• Does not help to alleviate the public housing shortage

• Redevelop to private housing

• e.g. Hang On Street Project

• Only increase 48 residential flats after redevelopment

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 • Colonial administration has deeply influenced the
positioning of the Government
• Offices consider themselves as the neutral arbiters of
the “public interest” instead of the initiator

• Public stakeholders’ sense of isolation from the

redevelopment process
• e.g. Wan Chai’s Lee Tung Street redevelopment

• Citizen-centered planning
• Allow building owner groups to describe their problems
to the professional planning experts at the early stage
of the redevelopment process

Tommy Patterson, 2016. Hong Kong’s urban planning process needs a rethink. Harbour Times. 46
• “Appropriate planning action cannot be
prescribed from a position of value neutrality, for
prescriptions are based on desired objectives”

• Plural planning: community stakeholders,

assisted by professional “advocate” planning
experts, submit their own urban plans at the start
of the process. Likewise, those experts advocate
on behalf of the submitting groups.

Paul Davidoff, 1965. Advocacy and Pluralism in Planning. Journal of the American Institute of Planners.

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Land Sharing Pilot Scheme
• Policy Address 2019

• To speed up short- and medium-term public housing supply

• Land owners have to provide part of their land and hand them
over to the Government for housing development

• Remainder of the site can be retained for private housing

development

• At least 70% of the additional gross floor area gained should be

allocated for public housing or “starter homes"

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Next Lecture
• City
• Urbanization
• Development
• Hong Kong’s development pathway

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Thank You

yi.sun@polyu.edu.hk
Planning &
All rights reserved. 2020 Development