Treating the Symptoms - A Critical Review of ... - Civic Exchange

The Local Context:Evolving Community ValuesUrban design must be tailored to local situations. The factors that make one city successfulmay not work in another, and different cities face different problems. For example, due toits extremely compact high-rise urban form, Hong Kong faces problems such as the “streetcanyon effect” that other lower-rise cities do not. There is much that is unique about HongKong’s development history and built environment, setting it apart from Western cities andeven other Asian cities.When applying urban design principles to Hong Kong, we must also refer to local priorities,values, and needs. What kind of a city do people want? As in North America and Europe,the answer is bound up in historical context. It is also a moving target as community valueschange and evolve.Modern-day Hong Kong can be said to have grown up in the half-century after WorldWar II, when Hong Kong became a haven for people fleeing war, political turmoil, andfamine in Mainland China. The pre-war population was 1.6 million, and by 1960 hadreached 3 million, by 1997 it was 6.4 million. The population has since stabilized at around7 million thanks to rising prosperity on the Mainland and a low native birth rate. 4 Betweenthe end of the war and the 1970s, Hong Kong transformed from a trading post into a lightmanufacturing centre and the busiest shipping hub in the world; then when factories movedacross the border in the 1980s, it again transformed into an advanced service economy andregional financial centre.With this break-neck pace of development, economic growth and the provision of adequateinfrastructure had to come first, while social, cultural, and environmental concerns took aback seat. Regulations and government policies were aimed at accommodating rapid growth.For example, a memo by the Director of Public Works in 1951 in preparation for a revisionof the Buildings Ordinance to allow development to a higher density stated plainly: “lowerstandards of accommodation may be necessary.” 5 Building regulations were relaxed in 1956to allow a much higher density of building. Urban design regulations governing the design,materials, and facades of buildings are notably absent in Hong Kong; the only firm designcontrols apply to plot ratio, site coverage, and sometimes height. Legislation protectinghistorical buildings was introduced relatively late (1971), and is limited in scope comparedto other jurisdictions. The rapidly changing skyline was accepted as a fact of life, and HongKong retains few of its colonial-style buildings and pre-war vernacular buildings.With the horizontal expansion of the city restricted by Hong Kong’s leasehold land tenuresystem (see Part II) and indigenous land rights, reclamation had long provided a politicallyand fiscally convenient source of land to accommodate development. Small-scale reclamationBox 1What is Urban Design?Urban design is a branch of urban planning that deals with the form,function and arrangement of buildings, streets, public open spaces,amenities, transportation, and services. It incorporates architecture,landscaping, planning and social issues to focus on “place-making” —theart of creating and maintaining vibrant and meaningful public spaces.Urban design was once indistinguishable from planning andarchitecture, as city designers focused mainly on the physical andaesthetic aspects of cities. In the 20th century, architecture andplanning diverged as the former concentrated on designing individualbuildings, while the latter moved towards broader issues of land use,infrastructure, and urban development. As a modern discipline, urbandesign arose in the 1950s to fill the neglected space in between. Criticslike Jane Jacobs argued that Modernist architecture and planning hadcreated sterile, inhumane, and crime-ridden public spaces.Urban designers think about the interplay of physical and social factorsin public urban spaces. Physical factors include the structure anddensity of city blocks, their accessibility (how easy it is for people toget to and from places), their legibility (how easy it is to find one’s way),their aesthetics, and the mixture of architectural forms and land uses.Social factors include the character, history, and local significance ofneighbourhoods, as well as the specific ways in which spaces areused by people. Urban designers seek to foster public spaces thatare conducive to social interaction, civic activity, and communitybuilding.In recent decades, they have also become more concernedwith environmental sustainability, and the relationship of the city tothe natural environment. Issues such as air quality, water pollution,energy efficiency and carbon footprints have become important.7

public attached little cultural or aesthetic value to pre-war shop houses (tong lau), and forgood reason. 10 Those buildings had offered very basic living conditions, and were associatedwith poverty. Their narrow frontages admitted little daylight, they lacked modern toilets,and had historically been badly overcrowded:“A typical tong lou was three to five stories high and constructed on long narrowlots roughly 15 feet wide and 40 feet long. Most tenements were leased by floor butwere further subdivided into smaller units or cubicles for subletting. Each cubicle wasoccupied by a family or several people. The minimum standard of 34.4 square feet peradult as recommended by the government in a 1935 ordinance was never met… Anold three-storey tenement in Wan Chai slept ninety people, many of them in bunkspiled up in six tiers. In 1960, a family of seven living in one of these old tenementsshared one cubicle with bunk beds in seven tiers.” 11Far from being seen as cultural assets, old shop houses and tenement buildings were perceivedas an embarrassment to a modern city. In 1985, when the LDC was first proposed in theGovernor’s policy address, Legislative Councillor Jackie Chan commented:“I am most pleased to learn that Government has placed much concern on theredevelopment of old districts in the urban area… there are still many pre-warand post-war buildings in these districts which are very old and dilapidated.Should these buildings be still allowed to continue to exist in their present form,they would not only cause a bad image on the city’s outlook but also form a greatcontrast between the old and the new.” 12When the Land Development Corporation bill was introduced to the Legislative Council(LegCo) in 1987, the South China Morning Post opined:“Gone will be the days when ‘nightsoil ladies’ have to climb several flights of stairsbefore dawn to collect sewage from the pre-war tenements which lack toilets.Replacing the eyesores will be handsome skyscrapers.” 13Nowadays, heritage activists campaign to rescue pre-war buildings from demolition, suchas the Blue House in Wan Chai. Some even perceive nondescript post-war tenements ashaving social value for their associated street life and “collective memory”. Heritage is justone of the many issues which now animate discussions on urban renewal. Whereas debateswere once related mainly to compensation and relocation, now a great variety of civil societyactors campaign on issues ranging from air ventilation to social network preservation. ManyHong Kongers still perceive these activists as peculiar sentimentalists who stand in the wayof economic development, but the fact is that significant numbers of people who are notdirectly displaced by redevelopment have come to regard themselves as stakeholders in theprocess.Pong Yuen-yee a town planner who worked at the LDC and the URA from 1989 to 2006,moved from planning into a community development role in the early 2000s in order todeal with this rise in the community’s awareness of their rights and of urban renewal’s impacton their living environment. Pong saw the Lee Tung Street (Wedding Card Street) projectas a catalyst and turning point for urban renewal activism. 14 For the first time, the displacedresidents were concerned not just about their own well-being, but about whether the streetwould retain any heritage elements after redevelopment. 15These developments do not mean that Hong Kong people no longer highly value economicgrowth, nor does it even mean that the public is unanimous on any of these issues. It doesmean that the public’s aspirations have grown more complex and sophisticated. There isa growing recognition that economic prosperity and good quality urban design are notmutually exclusive pursuits, but go hand-in-hand.9

Hong Kong Urban Design ConcernsHong Kong’s geography, regulatory environment, and development history have given it a one-of-a-kind cityscape that poses particular design challenges. These include:12345DensityScale andmassing of newdevelopmentView corridorsand sight linesThe waterfrontUrban greenspace10Hong Kong is an extremely densecity, with only 20% of its landmassbuilt up. 16 The most denselypopulateddistrict in 2008 wasKwun Tong, with 51,970 peopleper km 2 . 17 As a result, Hong Konghas a predominantly high-riseenvironment, a walkable citycentre, high patronage of publictransport, heavy use of formal andinformal public spaces, and a highdegree of public safety. However,many urban design problemsfacing Hong Kong occur becauseextremely high densities conflictwith people’s expectations for abetter quality of life.Hong Kong is one of the few citiesin the world where the “streetcanyon effect” is a serious problem.This occurs when buildings aremore than twice as tall as the widthof roads, and there are few or nogaps between buildings at groundlevel. This restricts the circulationof air and traps vehicle pollutantsat street level. 18 A variant of the“street canyon effect” is the “walleffect”, which occurs when clifflikebuildings or rows of closelyspacedtowers on the waterfrontblock air ventilation, sunlight,and sight lines, and exacerbate theurban heat island effect.Hong Kong’s combination of hillsand water give it some spectacularscenery, but views of hills, waterbodies, and man-made landmarkscan be easily obstructed by highrisebuildings. Current planningstandards and guidelines call forthe incorporation of view corridorsinto urban layouts, and give someprotection to views from specificlocations on the waterfront. Theridgeline of hills on both sidesof Victoria Harbour are seen asworthy of being kept free of visualobstruction.Victoria Harbour is a uniquenatural asset. Historically it was thecity’s economic centre, and is nowappreciated for its aesthetic beauty,its iconic views, and its tourismvalue. However, waterfrontareas have not historically beenplanned for public enjoyment,but dedicated to industrial andinfrastructural uses such as roads,cargo handling, wholesale markets,incinerators, abattoirs, etc. Themore recent development of “wallbuildings” on the coast has alsocut people off from the waterboth physically and visually. Thereis a growing demand for greatersensitivity in developing waterfrontareas.While about 40% of Hong Kong’sterritory is protected as countryparks giving citizens access tothe wilderness, 19 green space is inextremely short supply within theurban core. The built-up areas ofHong Kong Island and Kowloonprovide only 0.05 hectare (ha)of parkland per 1,000 people,compared to about 0.7 ha per1,000 people in Manhattan andinner London, 20 and 0.67 ha per1,000 people in the built-up partsof Singapore. 21 In a 2006 surveyby Hong Kong University’s PublicOpinion Programme, 62% ofrespondents said that they thoughtHong Kong lacked sufficient openspace and green parkland. 22

678910Place-makingPedestrianenvironmentHeritagepreservationEnvironmentalperformanceTrafficTo urban designers, place-makingis the art of creating places with astrong identity which are vibrantand well-loved. Unlike in theWest, where place-making reliesmore heavily on architectureand monuments, notable placesin Hong Kong are defined bythe land uses and activities thattake place in them. 23 With theprogression of urban renewal,urban designers, activists,politicians and citizens havebecome increasingly concernedabout the loss of “characterstreets”, 24 familiar neighbourhoods,and street markets. The social,cultural, and economic value ofsuch places is being increasinglypromoted.Related to place-making isthe creation of a pleasantand interesting pedestrianenvironment. This is challengingin Hong Kong, which has narrowstreets, high traffic congestion,and extremes of hot and wetweather. Government policieshave concentrated in two areas:incentives for developers to setaside space for wider pavements,and the construction of pedestrianfootbridges and underpassesto accommodate capacity andseparate pedestrians from cars. Theefficacy of these policies has beendebated in recent years.Hong Kong’s limited heritagelegislation and policies have longbeen a source of dissatisfactionto conservationists, and rapidgrowth has meant that the citynow has relatively few historicalbuildings left. It became a majorpublic debate in 2006-07, withthe dramatic Star Ferry andQueen’s Pier protests. It hasbecome a highly contentious issue,with wide disagreement on therelative priorities that should beput on heritage and economicdevelopment, and what physicaland social structures, customs, andpractices constitute our heritage.In an era of scarce resources andclimate change, urban designershave become more concernedwith environmental performance:how to design cities with betterair quality, less pollution, andmore energy efficiency. In HongKong, about half of all energy useis from electricity consumption.Of that, about 80% of electricityconsumption and a third ofgreenhouse gas emissions comesfrom buildings, largely from airconditioninguse in the summer. 25Its densely built environmentproduces an “urban heat islandeffect” that makes urban areasseveral degrees hotter than thesurrounding countryside. 26 HongKong’s low-lying coastal locationmakes it vulnerable to storms andflooding should climate changeproduce a rise in sea levels oran increase in dramatic weatherevents. 27 The acute shortage oflandfill space makes it importantto reduce the need to dispose ofconstruction waste.One of the challenges of urbandesign is how to mediate potentialconflicts between pedestriansand cars, and how to designurban environments which arepedestrian-friendly but which canstill accommodate vehicular trafficin Hong Kong, this is especiallychallenging because of limitedspace. Plans to increase density inthe urban core must be weighedin terms of their impact on trafficcongestion.11

12In 1998, the Planning Department recognized that urbandesign was a growing community issue, and commissioneda study “with a view to preparing a set of guidelines topromote public awareness on design considerations, and toprovide a broad framework for urban design assessment.” 28The study was completed and the Urban Design Guidelinesissued in 2003, with the goal “to promote Hong Kong’simage as a world-class city and to enhance the quality of ourbuilt environment”.The Guidelines, which were incorporated into the HongKong Planning Standards and Guidelines, identified themajor urban design issues and provided recommendationson each. These issues were massing and intensity in urbanfringe areas and rural areas, development height profile,waterfront sites, public realm, streetscape, heritage, viewcorridors, stilted structures and ventilation. 29However, the Urban Design Guidelines did not lead tothe passing of any enforceable legislation. The Guidelines,like the rest of the Planning Standards, are administrativeguidelines and not statutory law, which means that theyare not mandatory. Hong Kong Planning Standards andGuidelines make clear that they are not meant to be rigidlyenforced: “As planning standards and guidelines couldaffect the allocation of scarce land and financial resources,they should be applied with a degree of flexibility. Tradeoffsmay be necessary so that the community at large couldbenefit most from the development.” 30 The Urban DesignGuidelines therefore rely on existing laws, regulations, andadministrative mechanisms for implementation. 31The existing framework includes fragmented developmentcontrols exercised via the Town Planning Ordinance, theBuildings Ordinance, the Antiquities and MonumentsOrdinance, and through land lease terms. At least threegovernment departments are responsible for implementingand administering these ordinances and practices. Thedifficulties and inefficiencies of the existing planningframework will be further explored in Part II, but hereit is sufficient to say the Guidelines were written as amanual to guide future planning, but lack a comprehensiveenforcement mechanism.Having looked at the political, social and environmentalcontext in which Hong Kong’s urban design problems andaspirations have evolved, we now turn to the origins andoperation of the URA.

“A cosmetic attempt to patch upthe physical manifestationsof market failure”legislator Christine Loh on the URA bill, 2000

Part I:14The URA —A RedevelopmentMachine

The URA’s BeginningsThe URA’s predecessor was the LDC, which was set up in1988. The government wished to set up an independentbody to tackle the problem of urban renewal becauseit did not wish to spend public money. The governmenthad attempted to get directly involved in urban renewal inSheung Wan and Sai Ying Pun in the late 1960s and 1970s,but those schemes were beset by serious financial problemsdue to the expense of land acquisition and an economicdownturn in 1975. 32 The government and LegCo lost theirappetite for direct urban renewal. This eventually led to thedecision that the LDC would be self-financing. The LDCwas required by its ordinance to operate under “prudentcommercial principles”, and was offered only a start-uploan of HK$100 million from the government. (In practiceit only borrowed HK$31 million). 33The LDC was to buy properties from private owners at afair market price, partner up with a private developer (forupfront capital), redevelop the site, share the profits, andthen use its earnings to acquire more land and rehouseaffected tenants. This meant that not only did its projectshave to be commercially viable, they had to be extremelylucrative. The LDC tackled low-rise sites that offered alarge plot-ratio gain, located in central urban areas whichwould generate high property values. It was also extremelysensitive to fluctuations in the property market, and had towait to buy during market troughs and sell during peaks.During twelve years of operation, it managed to commence30 projects, but completed only 16, covering just 2.8hectares of land. 34 It left another 25 projects announcedbut not completed. 35 The government clearly saw this asinadequate. In 1998, its Urban Renewal Strategy studyidentified another 500 projects in need of redevelopment,of which 200 were accorded high priority. 36The government believed the reason that the LDC’s workprogressed too slowly was because the LDC lacked sufficientpower and resources. The situation was exacerbated by thesevere property slump following the Asian Economic Crisisof 1997. The slump not only affected the LDC, but privatedevelopers lost interest in renewal projects. It was decidedthat the LDC should be replaced with a more powerfulURA.15

Version 2:The Urban RenewalAuthorityThe URA was intended as a bigger, more powerful version of the LDC. The government identified the LDC’s perceived shortcomings, and designed the URA to avoid them.The main shortcomings were:1234Prudent commercialprinciplesPowers of resumptionRehousingFinancing16The LDC Ordinance stated that the LDChad to run under prudent commercialprinciples. This meant that the LDC wasunable to take on unprofitable projects.This language was therefore weakened inthe URA Ordinance, which only requiredit to “exercise due care and diligence in thehandling of its finances.” It was recognizedthat the URA would have to take on someunprofitable projects, although it washoped that it would be able to subsidizethem with more profitable projects. In thelong-term, urban renewal was still meantto be largely self-financing.While the LDC did have the abilityto request mandatory resumption ofproperty by the government, it first hadto demonstrate that it had made a goodfaith effort to buy properties from ownersat a fair market price. This meant it couldspend years in negotiation with propertyowners, and usually had to acquire thevast majority of property interests (inthe region of 90%) before applying formandatory resumption. This was thoughtto be too onerous. For the URA a timelimit was set for acquisition negotiations.The URA can begin by negotiating withowners to willingly sell their properties,but is required to apply for mandatoryresumption within 12 months after theproject plans are given final approval bythe Chief Executive or the Secretary forPlanning and Lands (now the Secretary forDevelopment).The LDC was not only required tocompensate property owners, but was alsorequired to ensure that no-one was renderedhomeless as a result of redevelopment. Thismeant that it had to rehouse rental tenantsusing its own resources. It offered tenantssubsidized rentals in its new developments,and sometimes had to buy properties on theopen market to rehouse displaced people.The URA was given more governmentsupport to rehouse tenants. Displacedrenters can now be rehoused in publicrental housing, or in units provided by thenon-profit Housing Society. The HousingAuthority agreed to set aside 20% of itsstock of rental housing annually for URAresettlement.It was felt that the LDC lacked sufficientfinancial support to accomplish its goals.Apart from a start-up loan, the LDC wasgiven no subsidies or tax breaks. The URAwould not only be tax-exempt, it wouldalso be exempt from having to pay the landpremium (normally paid by land ownerswhen they apply to alter or upgrade theland uses specified in their land leases).Since the land premium can comprise upto 40% of a project’s costs, this was anenormous indirect subsidy. In addition tothese indirect subsidies, the governmentalso agreed to inject equity into the URAthrough the Capital Investment Fund.In 2002, the government agreed to giveHK$10 billion directly to the URA over aperiod of five years.

The URA Ordinance was drawn up according to theseprinciples and brought before LegCo in 2000. However,what was not deeply considered when drafting thelegislation was what the community wanted to achieve inurban renewal, and how best to go about it. Nor did policymakersconsider the deeper questions of what role, if any,the government ought to play in urban renewal; whetherpaying above market-value compensation would distortthe market; and how to remedy the underlying problemswhich made private developers reluctant to participate inurban renewal in the first place. While some participantsin the public consultation suggested different approachesto urban renewal — some argued the government shouldavoid becoming involved in property development andlimit itself to a facilitating role — these suggestions weredismissed. 37 The URA was envisioned as a more robustversion of the LDC.Meanwhile, the community’s attitudes towards urbanplanning, design, and renewal had been evolving. Policymakersincreasingly recognized that building maintenanceand heritage preservation had long been neglected. Theseideas were incorporated into the Planning Department’s1999 study on Hong Kong’s Urban Renewal Strategy.In addition to “improving the built environment byreplacing old, run-down and underutilized areas with newdevelopments which are properly planned” and “achievingbetter utilization of land...to meet various developmentneeds”, the study set the goal of “[promoting] rehabilitationand preservation of buildings, and improvement of placesof local, architectural, cultural or historical interest.” 38Yet while it was decided that the URA would be given newresponsibilities in these areas, they did not play a greatpart in shaping its structure or its mode of operation. ThePlanning Department study would be used as the basis of aformal Urban Renewal Strategy to guide the new Authority,yet this document was not finalized until a year after thelegislation had been passed.Few of the legislators in the Subcommittee to Study theURA White Bill turned their attention to fundamentalpolicy questions either. Many were concerned with technicaldetails — the structure of the URA’s board, mechanisms fordisclosure and public consultation, compensation terms foraffected property owners — but few considered whetherthe right mechanism was being proposed to accomplish theright goals.The major exception was Christine Loh, who was at thattime a legislator in the (now defunct) Citizens Party. Shewas one of two legislators to vote against the bill, theother being Leung Yiu-chung of the Neighbourhood andWorker’s Service Centre. 39 Loh believed that the URAwould not work. At the debate on the second reading ofthe URA Bill, Loh argued that the government did not infact have a clear strategy for urban renewal. In her view thegovernment was setting up the “hardware” of the Authoritybefore developing the “software” (the strategy) to run it. 40Describing the URA as “a cosmetic attempt to patch up thephysical manifestations of market failure”, Loh went on tourge the government to first address the causes of marketfailure at their root before trying to intervene directlyin urban renewal. 41 (The causes of market failure will beexplored more deeply in Part II).17

URA Ordinance vs.Urban Renewal Strategy18The legislation that defines the URA’s organizationalmechanism was determined before its guiding principles,the Urban Renewal Strategy, was finalized. The Ordinanceitself gives scant mention of the Strategy, simply stating that“The Secretary [of Planning and Lands] may prepare fromtime to time an urban renewal strategy for the purposes ofthis Part relating to the carrying out of urban renewal”. 42It makes no reference to the Strategy’s content, leaving itentirely open-ended.While a legislative text is not the appropriate venue fora lengthy discussion of policy aims, one would expectto find in it a description of the legal and administrativemechanisms used to accomplish the policy goals. However,while the Ordinance lists a variety of purposes for the URA,the only mechanisms described within it are those utilizedfor redevelopment.The purposes of the URA stated in the Ordinance are:(a) replace the LDC as the body corporate establishedby statute having the responsibility of improving thestandard of housing and the built environment ofHong Kong by undertaking, encouraging, promotingand facilitating urban renewal;(b) improve the standard of housing and the builtenvironment of Hong Kong and the layout of built-upareas by replacing old and dilapidated areas with newdevelopment which is properly planned and, whereappropriate, provided with adequate transport andother infrastructure and community facilities;(c) achieve better utilization of land in the dilapidatedareas of the built environment of Hong Kong andto make land available to meet various developmentneeds;(d) prevent the decay of the built environment of HongKong by promoting the maintenance and improvementof individual buildings as regards their structuralstability, integrity of external finishes and fire safety aswell as the improvement of the physical appearanceand conditions of that built environment;(e) preserve buildings, sites and structures of historical,cultural or architectural interest; andThe Ordinance describes the URA’s financial arrangementsand powers, the procedures required to initiate, implement,and gain planning approval for redevelopment projects,procedures for public objection, and procedures forresuming land. No specific mechanisms are described tofulfil goals (d) and (e) — promoting building maintenanceand preserving historical structures.It can also be noted that all of the purposes stated inthe Ordinance relate to the improvement of physicalinfrastructure. There is no mention of social or environmentalconditions, for example. Moreover, the clause aboutheritage preservation was not present in the original versionof the bill, but was inserted at the suggestion of the LegCosubcommittee in charge of studying the bill. 43This redevelopment-centred mechanism lies in sharpcontrast to the Urban Renewal Strategy, which tries tospell out more holistic goals. The Strategy states thaturban renewal is not a “slash and burn process”, and thata “comprehensive and holistic approach should be adoptedto rejuvenate older urban areas by way of redevelopment,rehabilitation and heritage preservation.” 44 It states thatits urban renewal approach should be “people centred”,and that the purpose of urban renewal is to “improve thequality of life of residents in the urban area” and “reduce thenumber of inadequately housed people”. 45(f) engage in such other activities, and to performsuch other duties, as the Chief Executive may, afterconsultation with the Authority, permit or assign to itby order published in the Gazette.

Paragraph 5 goes on to lay out a number of objectivesspecifically related to urban design, environmentalimprovement, and social sustainability. These objectives arequoted below:1.2.3.4.5.6.7.8.9.restructuring and replanning designated target areasdesigning more effective and environmentally-friendlylocal transport and road networksrationalising land usesredeveloping dilapidated buildings into new buildingsof modern standard and environmentally-friendlydesignpromoting sustainable development in the urban areapromoting the rehabilitation of buildings in need ofrepairpreserving buildings, sites, and structures of historical,cultural or architectural interestpreserving as far as practicable local characteristicspreserving the social networks of the local community10. providing purpose-built housing for groups withspecial needs, such as the elderly and the disabled11. providing more open space and community/welfarefacilities12. enhancing the townscape with attractive landscapeand urban designThese objectives form the basis of the URA’s “4Rs” motto— Redevelopment, Rehabilitation, pReservation andRevitalization. Given the redevelopment-centred structureof the URA laid out by the Ordinance, it is questionablewhether the Authority is equipped to carry out these goals.A look at the practical targets set out in the Strategy revealsthat the holistic language is an afterthought tacked onto a heavy programme of redevelopment. The Strategy,released in 2001, aimed to redevelop 2,000 old buildingsin about 200 sites over the following 20 years, improve theenvironmental quality of 67 hectares in old urban areas,rehouse 27,000 tenant households, provide 60,000 m 2of open space, 90,000 m 2 of floor space for government,institution or community (GIC) facilities, and buildseven new schools. These 200 redevelopment sites werepre-selected by the government and were named in anundisclosed Annex to the Strategy. .If these targets are to be met, it would necessitate anaverage of 10 redevelopment projects affecting an averageof 100 buildings and 1,350 tenant households every year.The Strategy does not acknowledge the contradictionbetween this rapid pace of redevelopment and goals such as“preserving the social networks of the local community” or“preserving as far as practicable local characteristics”.Redevelopment is the engine of the URA. It is a machinedesigned to conduct 200 redevelopment projects identifiedby the government with the help of mandatory resumptionand land premium waivers.Money made from redevelopment is meant to fund the otherthree Rs of rehabilitation, preservation, and revitalisation.However as we shall see in Part II, the both the financialresources and number of projects it has devoted to theseactivities are a small fraction of its overall portfolio.19

How The URA WorksThe Cycle ofResumption and Profit20The URA Ordinance lays out the procedures for carryingout projects. Every year, the URA is required to submita five-year corporate plan to the Financial Secretary,containing a list of the projects it plans to implement inthe next five years, when it expects to commence them, aswell as its projected income and expenditure. At the sametime, it must submit a business plan which contains thesame information for URA activities taking place withinthe next year. The Financial Secretary then approves theplans.Neither the corporate plan nor the business plan is madepublic. The government justifies this secrecy by saying thatallowing the public to know where future projects will bewould fuel property speculation or encourage squatters tomove into buildings that are about to be demolished inthe hopes of securing compensation. With the exceptionof the 25 projects previously announced but not begun bythe LDC, the general public does not find out about URAprojects until they are officially gazetted and commenced.Upon commencement, a freezing survey takes place wherebythe URA conducts a census of all those living within theproject area for the purpose of calculating compensation.The gazetting also sets in motion the planning and publicobjections process. Legally, the URA may proceed by wayof a “development project” or a “development scheme”.The distinction is that “development projects” are smallerand simpler, and do not require rezoning permission fromthe Town Planning Board (TPB). The planning processtherefore remains internal to the URA (which has theauthority to draw up statutory plans within the projectboundaries), and so does the mechanism for lodging publicobjections. “Development schemes” are larger and morecomplex, and require TPB approval. The planning andpublic consultation process is then conducted by the TPBunder the Town Planning Ordinance, and is the same forany other private development requiring TPB approval.When the planning process is finished, and is givenfinal approval by either the Secretary for Development(formerly the Secretary for Planning and Lands) or theChief Executive for development projects and developmentschemes respectively, the URA can begin land resumption.Initially the URA will negotiate with owners to sell theirproperties voluntarily, but the URA Ordinance states thatwithin one year after receiving final planning approval, itmust apply to the government to mandatorily resume theremaining properties.The URA needs to earn profits because it is very expensiveto acquire properties and relocate people. In 2002, it wasprojected that of the HK$38.3 billion the URA wouldspend between 2002 and 2007, HK$21.1 billion wouldbe for acquisition and relocation, while HK$16.8 billionwould go towards construction. 46 Because the URAhas extensive powers of mandatory resumption, ownersresiding in project areas have no choice but to move out.As a sweetener, the URA offers higher than market ratecompensation. Domestic property owners are offeredcompensation equivalent to a same-sized average sevenyear-old flat in the same district. Since the properties beingacquired are much older than seven years, this representsa significant increase over the market value. Owners ofcommercial premises are offered market rate plus 10%, ormarket value plus 35% if the premises are owner-occupied.47In addition to compensating owners, the URA mustalso offer compensation or rehousing to domestic andcommercial tenants. 48Finally, because the URA often needs to borrow to coverits acquisition costs, interest payments can reach high levelsdepending on prevailing interest rates. While the URA nowhas a time limit of 1 year on the acquisition process beforeit must apply for mandatory resumption, under the formerLDC, acquisition negotiations could drag on for years. Thelonger the acquisition period, the more interest must bepaid. During the implementation of the Langham Placeproject (which was begun under the LDC and completedby the URA), there was a period in the 1990s when interestcosts ran to HK$1 million per day.

Is the URAjust another developer?Having acquired the site, the URA can then proceed withredevelopment in one of three ways:(a) It can redevelop the site on its own(b) It can enter into a joint venture contract with aprivate developer.(c) It can sell the land to a private developer.Joint ventures are the most commonly used modelof redevelopment. Under this arrangement, the URAtenders out for a private joint venture partner to sharethe construction costs and profits. However, the URAstill unilaterally shoulders the costs of acquisition andrelocation.All of these factors combine to explain why the URA stillfaces strong commercial pressures even though it is exemptfrom taxes and land premium. They also explain whythe URA’s activities lean heavily towards redevelopment.The profits earned from redevelopment do subsidizethe other three “Rs” of rehabilitation, revitalization,and preservation, but in reality the vast majority of thefunds go towards new redevelopment projects. The URAdoes not release figures on income and expenditures forindividual projects, but some of its published documentsindicate the heavy financial emphasis on redevelopment.In 2002, the Planning and Lands Bureau estimated thatthe URA’s total cost for 42 projects over the next fiveyears would be HK$38.3 billion, of which only HK$0.4billion was earmarked for rehabilitation, revitalization, andpreservation. 49 Its 2007-08 annual report indicates that theURA made outlays of HK$2.3 billion in direct costs, ofwhich just HK$47 million was for building rehabilitationgrants and loans. (It was not mentioned how much wasspent on preservation or revitalization). 50 In its 2008/09progress report to LegCo, the URA also stated that a totalof just HK$150 million had been spent on rehabilitationsince it first began its rehabilitation programmes in 2004.In a July 2009 presentation to the Royal Institute ofChartered Surveyors, Secretary for Development CarrieLam acknowledged that the URA is often perceived as “justanother developer”. 51 Critics allege that its commerciallydrivenmodel produces results no better than what anyprivate developer would do.This is not an entirely fair assessment. As explained inPart III of this report, the URA has done more thanprivate developers to adopt green building practices andconform to voluntary ventilation assessment guidelines. Itadditionally fields a team of social workers to conduct socialimpact assessments before projects and to assist families inrelocation. It is also required by law to hold some form ofpublic consultation, either through its own mechanisms,in the case of small development projects, or through theTPB’s mechanism in the case of large development schemes.While the URA’s consultation mechanisms fall far short ofbottom-up planning, private development projects whichdo not contradict statutory Outline Zoning Plans do notrequire any form of public consultation.Nevertheless, its commercially-oriented acquire-sellbuildmodel has failed to produce a high quality urbanenvironment. As we shall see in Part III, it builds bulky,homogenous developments with large amounts of inactivefrontage. They overshadow neighbourhoods, frequentlyrely on car-oriented transport planning, and worsenair ventilation conditions. While it has created somesuccessful public spaces and pedestrian precincts, most areunremarkable and a few are poorly designed and managed.URA projects severely disrupt the local economies whichform the character of much of inner urban Hong Kong,and at best preserve heritage buildings in a piecemeal andsuperficial manner. This is far from the holistic processdescribed in the Urban Renewal Strategy. Despite being apublic body with special powers and subsidies granted to itby the government (mostly exemption from land premium,but also a direct capital injection of HK$10 billion 52 ) it hasfailed to adequately fulfil public aspirations.The URA is ultimately a tool devised to paper over thephysical results of inadequate enforcement of regulationsand market failure caused by a high land price policy. In PartII, we will look at how the URA fits into its political andeconomic context, and how it may inadvertently be creatingperverse incentives which exacerbate the very problems itwas intended to solve.21

PART II:22The PoliticalEconomyof the URA

The setting up of the URA raises a broader question: whydo we need a URA in the first place? Why is the privatemarket unable to redevelop, rehabilitate, revitalise, orpreserve old buildings on its own? In Hong Kong, thereis a common assumption that buildings over 30 years oldshould be torn down, yet other cities around the world areable to make use of buildings for decades or even centuries.The answers lie in Hong Kong’s institutional context.Hong Kong’s peculiar system of land administration andurban planning has created an inefficient and distortedland market, where real estate development has becomean extremely capital-intensive activity with high barriers toentry. Real estate development in Hong Kong is dominatedby a very small number of large players, who are generallyunwilling to invest in older parts of the city because theyare less profitable than greenfield site development, whilesmaller players and individual owners find it prohibitivelyexpensive to conduct renewal themselves. The situation isone of market failure.The same institutional features which lead to market failurealso explain why Hong Kong has historically placed solittle emphasis on urban design. As a small, hilly territory,land would have been a scarce resource in Hong Kong inany case. However, its institutional set-up has artificiallyrestrained its supply to an even more extreme degree,making land extremely expensive and vastly intensifyingdevelopment pressures. The need to extract the maximumdevelopment potential out of a small amount of land hascome at the expense of good quality urban design. HongKong’s legislation and regulation of development, design,and historical preservation remain relatively rudimentary inlarge part due to these pressures.The formation of the URA did not address theseunderlying institutional issues. By directly intervening inurban redevelopment, the government is addressing thephysical symptoms of the problem rather than the causes.The following section will offer a brief outline of politicaleconomy and institutional context in which the URAexists. It is not intended to be a thorough treatment ofHong Kong’s land administration system, but to highlightthe ways in which it affects the problems of urban renewal.It will then consider the effects that the URA has on theland system in turn.23

The Institutional ContextNationalizedland ownershipLand Shortage andIntense DevelopmentPressures24Despite Hong Kong’s reputation as a free-wheeling capitalistsociety, when it comes to land the government has alwaysbeen highly interventionist. In 1842, the British colonistsdeclared all land (except for the site of St. John’s Cathedral)to be Crown land, to be disposed of as the government sawfit. Although in common parlance we speak of government“land sales” and “land owners”, what is being bought andsold is not the land itself, but a government lease giving thebuyer the right to use a parcel of land for a given number ofyears. This system of land ownership is called “leasehold”,as opposed to “freehold” where individuals own landoutright.Most commonly, leases grant occupancy rights for a periodof 50 or 75 or 99 years, although there are variations. Manyleases made between 1849 and 1898 were valid for 999years, making them effectively freehold land. 53 Some leasesare renewable while others are not. When a renewable leaseexpires, it can be renewed upon the assessment of a newannual rent. When a non-renewable lease expires, the landis supposed to revert to the government. However, if thegovernment does not need the land for any public purpose,it usually grants a new lease to the same owner upon thepayment of a premium that reflects the land’s marketvalue. 54This reliance on land revenues, which has been described asan addiction, has created incentives to keep property priceshigh by restricting the land supply. The government alsouses the land supply as a macroeconomic lever, 59 limitingland supply in order to prop up the market in times ofeconomic downturn — most recently in 1998 and 2002.There have also been times when the government has triedto sell commercial and residential land, but set the price toohigh to attract any buyers. 60 This constitutes an unofficial“high land price policy”. Indeed, it has become the public’sexpectation that the government should try to fetch thehighest price possible for land in order to fill the publiccoffers; failing to do so is viewed as squandering publicresources.The physical result of such a land tenure system has beenone of the most compact cities in the world, with populationdensities reaching 51,000 people per km 2 . Urban sprawl isimpossible when no land can be legally developed unlessthe government has sold it and the lease permits it, so thatonly about 21% of Hong Kong’s total land mass is builtup. 61 With the city prevented from growing horizontally, ithas expanded vertically — 85% of residential buildings arehigh-rises over 30 storeys. 62While this has created substantial efficiencies in transportand communication, it has also meant the majority ofHong Kong residents have endured housing that is moreexpensive and of lower quality than that found in countriesof similar income levels. This has been a problem throughouthistory: in the 19th century, persistent overcrowding (oftenattributed inaccurately to Chinese cultural preferences)contributed to outbreaks of bubonic plague. 63 AfterWorld War II, the inability of the land market to legallyaccommodate the massive influx of immigrants led to thegrowth of shanty towns where the risk of fire and civilunrest eventually pushed the government into an ambitiousprogramme of public housing construction. Today, fullyhalf the population relies on public rental or subsidized saleflats. 64As a result, land sales and premiums have always provideda significant, if highly unstable, proportion of the HongKong government’s total revenues. This was in fact themain rationale behind nationalizing land in the first place— to enable the government to keep taxes low to satisfythe merchants who used Hong Kong as a trading base. Atpresent, maximum tax rates on salaries, profits, and propertyare between 15% and 17%, 55 while capital gains, foreignearned income, and goods and services are not taxed at all. 56Until recently, land premiums made up about a third oftotal government revenue, reaching 35% in 1981. 57 (Landrevenues fell dramatically in the early 2000s due to theproperty slump and freezes in government land sales.) 58In old urban areas, these intense development pressures haveresulted in significant planning problems, such as streets toonarrow to accommodate modern traffic, a shortage of openspace, and insufficient public amenities. Some of HongKong’s largest urban parks, such as King’s Park and KowloonPark were not planned as parks but converted from disusedmilitary installations. 65 Others, such as Victoria Park,were built on reclaimed land. In the post-war period, theburgeoning population prompted the government to relaxdevelopment controls, and a new Buildings Ordinance in1956 allowed a much higher density of building. This putHong Kong on its path to becoming a high-rise city, whichgrew up rapidly without making significant improvements

A Peculiar System ofUrban Planningto the transport network or to public amenities in theinner city. Overbuilding soon led to another revision of theBuildings Ordinance in 1962, reducing overall permitteddensity and switching from density control based on cubicvolume to a system based on plot ratio and site coverage. 66The 1962 regulations remain more or less in place today.Additionally, many buildings erected rapidly in the 1950sand 1960s were of substandard construction. Low-qualityconcrete mixed with sand was frequently used. The lifespanof these buildings is approximately 30 to 50 years, andcombined with poor maintenance (addressed below), manyof them are now deteriorating to the point of becominguninhabitable.While the government has benefited from the revenuesbrought in by high land prices, it has struggled with theflip-side of the equation — when land prices are so high,providing public amenities in the urban core is extremelyexpensive. Dedicating land to public purposes instead ofselling it for development means forgoing large amountsof revenue, and resuming land to improve already built-upareas is very costly.Resumption costs stymied direct government efforts toconduct urban renewal in Sheung Wan in the 1960s. Bysetting up the LDC and later the URA to be self-financing,it was hoped that these agencies would be able to improvethe planning of the urban core without the governmentincurring large costs. 67Many current planning policies are attempts to provideneeded amenities in underserved areas while limitinggovernment expenditure, such as the counting of privateopen spaces on top of podiums towards the PlanningStandards’ per capita open space requirements. So is thepolicy of requiring private developers (and the URA)to provide open space, transport infrastructure, andcommunity facilities within comprehensive developments.Using the URA to provide planning improvements suchas open space and GIC facilities is a more targeted versionof the same strategy: many of the sites taken over by theURA and its predecessor the LDC were in fact zoned foropen space or community facilities, but were not developedfor many years due to lack of willingness to resume theland. 68 Since the zoning meant that the owners could notredevelop their properties, they deteriorated to the pointwhere they became targets for urban renewal (see page 37on planning blight).While these policies have often produced less thansatisfactory results, they are often seen as the most practicalsolution achievable given Hong Kong’s pressing spaceconstraints. Yet these space constraints are themselves theresult of government land policies.As a result of Hong Kong’s leasehold land tenure system,the city has developed an equally unusual method of townplanning and development control. There are actuallythree separate mechanisms, governed by different sets oflegislation and administered by different departments,which evolved gradually according to circumstance. Clashesbetween the three systems contribute to market failure inurban renewal. Before these issues are explored, we willdescribe these systems in a little more detail.Firstly, there are the land leases themselves, which areadministered by the Lands Department. The primarypurpose of a land lease is to govern the transfer of propertyrights from the government to a private buyer. However, inthe days before statutory town planning mechanisms, landleases also served as a rudimentary means of developmentcontrol. This function has persisted up to the present day.Early leases often contained basic provisions about the typeof building to be erected (i.e. “dwelling house”, “tenements”),acceptable land uses (i.e. prohibiting “offensive trades”),building height (usually 35 feet), and architectural style(Chinese or Western). Most of these old developmentclauses are now considered obsolete and unenforceable, sothat most pre-war plots now have essentially unrestrictedleases. 69 In the post-war era, lease conditions becamemore exacting as the government turned to leases toenforce planning improvements (explained further below).Nowadays, leases can contain specific provisions about landuse, plot ratio, building type, building height, design andlayout, vehicular and parking arrangements, and provisionof community facilities. They can even include drawingsshowing specific design requirements. 70Leases have become the primary mechanism for developmentcontrol enforcement. Land leases are not governed bystatute, but are treated as private contracts betweenindividual lessors and a landlord which happens to be thegovernment. As such, it is governed by case law, which has25

26traditionally given the Lands Department great discretionin disposing of land, setting lease terms and decidingpremiums. 71 A serious breach of the contract entitles thegovernment to “re-entry”, which is to re-possess the landwithout compensation. In practice, this is only done as alast resort, but the threat of re-entry compels compliance. 72The obvious limitation of development control throughlease conditions, however, is that lease conditions can onlybe altered when the lease expires, or when the owner appliesfor lease modification. New lease conditions throughplanning controls or building regulations can also only beimposed prior to approving building plans for a site. Giventhe multi-decade duration of leases, the planning needs ofthe city can change dramatically in between opportunitiesfor modification. Some leases cannot be changed at all unlessthe land owner voluntarily applies for a modification — thegovernment cannot impose new conditions on renewableleases, nor on old colonial 999-year leases.Secondly, there is the Buildings Ordinance, which isadministered by the Buildings Department. Its purposeis to ensure safety in building construction and design,and grew out of sanitation and safety legislation firstenacted in the 1850s to address problems of sanitationand overcrowding. 73 While these laws were initially heavilyopposed, they became accepted over time because theirstandards applied uniformly to everyone. Most of thecurrent Buildings Ordinance dates from 1962 and coversdiverse issues from construction standards to emergencyvehicle access to building maintenance. The Buildings(Planning) Regulations under the Ordinance also containdevelopment controls based on plot ratio and site coverageto ensure that buildings receive adequate sunlight andventilation. Any new buildings must comply with theBuildings Ordinance before the Buildings Department willissue them with building and occupation permits, and oldbuildings may be subject to inspections and, if necessary,mandatory repair orders.Finally, there is an administrative and statutory urban planning(zoning) system under the Town Planning Ordinance. Thisis administered by an appointed statutory body, the TPB,and its executive arm, the Planning Department. This was arelatively late addition, superimposed on top of the existinglease system and Buildings Ordinance. The Town PlanningOrdiannce, based on the British planning system, 74 waspassed in 1939 because the colony’s rapid growth called formore sophisticated methods of town planning. However, itsimplementation was delayed until after World War II. 75The Town Planning Ordinance empowers the TPB, throughthe Planning Department, to draw up statutory town plans.These plans, called Outline Zoning Plans (or DevelopmentPermission Area Plans in areas) show what is intended to beplanned in a district. The only other body allowed to drawup statutory plans is the URA, whose powers are limitedto declared Development Scheme boundaries. Plots ofland are zoned for specific uses — residential, commercial,industrial, open space, etc. If a land owner wants to use hisland for a purpose other than what is stated in the OZP, orif the land is within a zoned Comprehensive DevelopmentArea, he must apply for TPB approval. Since 1973, thegovernment has also asserted the right to impose statutorydensity and height controls in specific geographical areas,usually based on calculations of the capacity of the area’sinfrastructure. These controls were heavily opposed byland owners because their restrictions applied differentlyto different plots of land, on top of the existing BuildingsRegulations.Imposing a statutory planning system on top of the existinglease system was problematic, resulting in the wateringdown of the Town Planning Ordinance. Leaseholdersjustifiably saw the introduction of additional developmentcontrols in excess of those already stated in their leases asan attenuation of the development rights that they hadfairly purchased. Hence, the Town Planning Ordinanceof 1939 ruled out the possibility of compensating ownersfor loss of development rights, but it also did not containany provisions for enforcement. The plans drawn up bythe TPB were only meant to administratively guide futuredevelopment.The planning permissions system for non-conforming usesdescribed above was only set up in the 1970s; and only in1991 was the TPB granted powers to inspect and fine nonconforminguses in the New Territories. In urban areas,enforcement must still be carried out indirectly through theBuildings Ordinance and lease conditions. 76 No action canbe taken against non-conforming land uses if they do notalso violate lease conditions or the Buildings Ordinance.

Implications for Urban RenewalThe unique land administration and urban planning systems described above have many important implications for Hong Kong’s economy and its property market in particular. In thefollowing section, we will explore the effects the institutional context has on the problems of urban renewal in Hong Kong.Why Don’t BuildingsRenew Themselves?The Problem of PremiumsThe crucial thing about Hong Kong’s fragmented urbanplanning system is that satisfying one set of requirementsdoes not mean that one is in good standing with all three.Strictly speaking, statutory requirements take precedenceover private contracts, so if statutory town plans or theBuildings Ordinance conflicts with lease conditions,the former should be followed. However, if a proposednew development complies with both the OZP and theBuildings Ordinance but violates the lease conditions, theland owner must still seek a lease modification. Doing sorequires paying a premium if the new use is more valuablethan the old.The rationale is this: the original price of a land lease soldin a government land auction reflects the value of thedevelopment rights contained in the lease. If a land ownersubsequently wishes to exceed the lease’s terms, a premiumis charged to reflect the full difference in land value beforeand after the change of use. Lease modification premiumsadd significantly to the cost of urban renewal and thereforeinhibit it.Firstly, the premiums cost millions or sometimes billionsof dollars. The press reported that the lease premium paidby the former LDC (which was not yet exempt frompremiums) and its private sector partner, Great Eagle Group,on the Langham Place development amounted to HK$300million in 1999. This sum, negotiated in the depths of theAsian Economic Crisis, was much lower than the HK$2.5billion that it would have cost in 1997 at the height of theproperty market. 77 (The project’s total development costswere reported at HK$10 billion, of which HK$4.4 billionwas spent buying the site.)Secondly, the lease conversion premium must be paidup front and in one payment. This means that smallerdevelopers and individual property owners are often simplyunable to come up with the money. The system is biasedin favour of large developers, who possess large amounts ofcapital and the ability to accumulate large land banks so thatthey can time lease modification applications to coincidewith market downturns. 78 Yet while large developers areat an advantage, they often find urban renewal projectsunattractive, requiring much both in the way of funds andpatience. A business strategy that requires waiting untila market downturn to negotiate the premium, and thenwaiting until a market upturn to complete construction,makes urban renewal a very slow process. Buying greenfieldsites is far more straightforward in comparison, even ifcompetitive bidding makes the land itself more costly. 79Thirdly, the way in which land premiums are calculateddoes not take into account the costs incurred by a developerin acquiring and clearing a site. Experts have argued thatbecause the “after” value of the site is assessed on a “clearedsite” basis, the premium does not take into account thecosts of compensating all the owners and tenants, anddemolishing the existing buildings. 80 Experts have alsopointed out that the “before” value is assessed based on theexisting uses without taking into account any expectationof future change, which in practice inflates the marketprice. A property owner selling to a developer expects thatthe developer will make far more profit from the land inthe future, so he will demand a higher price. The premiumcalculation excludes this “hope” element, so the developereffectively pays twice.In the past, Hong Kong managed nevertheless to redeveloplarge swathes of the city privately because of the large plotratio gains allowed by changes in government policy. Afterthe Buildings Ordinance was revised in 1956 to allowsignificantly higher densities, owners of suburban propertiesrushed to apply for lease modification. 81 (Many such leaseshad been bound by 35-foot height restrictions). The largegain in plot ratio outweighed the expense of the premiums.However, present day environmental concerns have madethe further relaxation of plot ratios highly unlikely.By the 1980s, opportunities for large plot ratio gains hadbecome much scarcer. Small developers started to complainabout the burden of lease conversion premium. At a LegCodiscussion in 1986 on urban renewal (prior to the settingup of the LDC), Legislative Councillor Dr. Henrietta Ip,who was the director of a construction company, urged theLands Tribunal to look into the issue of land premiums,arguing:“The question is how to put this theoretical calculation[of lease modification premium] into practice andyet arrive at a fair and balanced premium so as toexcite the redevelopment of such potential sites. Veryoften, the experience is that the demand for excessivepremium rarely justifies the landlord’s financialoutlay to demolish existing buildings, compensatetenants and pay the premium as well as bear the riskof rising bank interest and uncertain market. Suchsites are therefore abandoned by the large propertydevelopment corporations.” 82The premium problem inhibits not only redevelopment, buteven the adaptive re-use of old buildings. If a land ownerwishes to change the permitted land use of a building (i.e.from residential to commercial), even without demolishingand rebuilding, he must still pay a lease modificationpremium or else pay a fee to obtain a temporary changeof-usewaiver valid for the lifetime of the building. Thelease modification premium is typically assessed based onthe expected value of the land after redevelopment to the27

28maximum allowable plot ratio — if the owner wishes onlyto refurbish a lower-rise building, this means he must stillpay a premium for floorspace that he does not intend tobuild.Lease conversion premiums have been an especially severeproblem for obsolete industrial buildings. The migration ofindustries to the Mainland since the 1980s left behind about1.4 million m 2 of underutilized industrial space by the endof the year 2000. 83 For comparison, Hong Kong’s entirestock of commercial office space was about 10.5 million m 2(113 million square feet) at the end of 2009. 84 Because oflease restrictions, this industrial space could not be legallyconverted to other uses without payment of a premiumeven though the Planning Department had rezoned manylots to “Other Specified Uses (Business)” under the OZP.In 2002, as part of the background research for the HongKong 2030 Planning and Vision Study, a pilot study wasdone on the hypothetical conversion of two industrialbuildings to loft apartments in Ma Tau Kok and YauTong. It conservatively estimated the land premiums to be17% and 5% of the total development cost respectively,rendering land premiums the “make or break” factordetermining whether the projects would be financiallyviable or not. 85 This study was conducted during a marketdownturn, and in stronger market conditions, landpremiums can be expected to be much higher. A privatesector planner and surveyor interviewed for this projecteach informally estimated premiums at up to 40% to 50%of total development costs. 86 One expert said that this iswhy there have been “virtually no cases of modification fora change of use from industrial to office while retaining theexisting buildings”. 87For many years, experts have been urging lease modificationpremium reform. In 1991-1992, a Special Committeeon Compensation and Betterment was appointed toreview Hong Kong’s town planning system. It addressedthe issue of lease modification premiums, and suggestedits replacement with a more uniform and fairly-appliedbetterment (redevelopment) tax. 88 The Special Committeealso suggested gradually disentangling lease developmentconditions from the statutory planning system by stipulatingthat all lease development conditions apply to the originalbuilding only, so that after redevelopment buildings wouldbe governed only by the statutory OZP and the BuildingsRegulations. The Special Committee’s suggestions werenever implemented.In 2003, the Hong Kong Institute of Surveyors suggesteda number of simpler reforms in order to stimulate urbanrenewal and economic investment in the wake of the SARSdownturn, including special financial incentives or a basic25%-50% discount on all lease modification premiums. 89These were not implemented at the time either.While Hong Kong’s government has been reluctant tooverhaul the land premium system, it has at various timesoffered temporary concessions to modification premiums(as well as other land premiums and land taxes) 90 in responseto extreme economic circumstances. For example, duringthe late 1960s and early 1970s, the government reducedlease modification premiums by 50% to revive a depressedmarket caused by bank runs in 1965 followed by the riotsof 1966 and 1967. 91In his 2009-2010 policy address, Chief Executive DonaldTsang offered temporary measures intended to encourageredevelopment or conversion of old industrial buildings.Some of these measures appear to provide incentives formore environmentally-friendly choices.Firstly, he proposed to lower the threshold for compulsorysale for redevelopment for industrial buildings located inre-zoned industrial areas (see section on multi-ownershipfor further explanation). Secondly, he suggested linkingpremiums to redevelopment density on a “pay for what youbuild” approach, so that instead of automatically assessingpremiums based on the maximum development potential,a developer could pay less for building a smaller building orretaining an old one. Thirdly, he proposed that industriallease modification premiums could be paid in installmentsover a five-year period. Fourthly, he proposed that ownerswho convert their buildings instead of redeveloping themcould be exempt from change of land use waiver fees. 92The latter three proposals — those having to do with landpremiums — will only be applicable for three years, from2010 to 2013. 93 In January 2010, the government set upa team to process conversion applications with the goalof putting the new policy into practice by April. 94 Theseproposals do not apply to non-industrial buildings, andit remains to be seen whether these pilot measures will berenewed upon their expiration.Lease modification premium reform is both an economicallyand politically fraught issue, explaining the reluctance ofsuccessive administrations to implement fundamental andpermanent reforms. With the government so dependenton land revenues, cancelling or lowering modificationpremiums (which accounted for 57% of land revenuesin 2001-2002) 95 would mean forgoing a large amount ofincome. While this would be partially offset by a growthin revenue from rates (property taxes), 96 other taxes wouldstill need to be raised elsewhere. This would be extremelypolitically difficult given the narrowness of Hong Kong’sexisting tax base — in 2006, only 35% of the workingpopulation paid salaries tax while the top-earning 800out of 750,000 registered companies paid 60% of profitstax. 97 Moreover, suddenly freeing up such a large numberof old industrial buildings for redevelopment or conversionwould cause property prices to plummet, triggering arecession. Although this would lead to a more competitiveand diversified economy in the long run, it would stillbe very painful in the short run, especially for domesticproperty owners finding themselves in negative equity. 98And because it would remove a major barrier to entry for

smaller developers, it would probably be opposed by largedevelopers currently benefiting from the status quo. 99Making the URA premium-exempt was a way to sidestepthe premium problem rather than to tackle it directly.Instead of freeing up the market, the URA would simplytake on the task of urban renewal itself. Yet the URA wasnot granted a broad mandate to redevelop underutilizedindustrial buildings, but was targeted mainly at residentialand commercial mixed-use areas where lease restrictions areless of an issue due to many leases in the old urban corebeing unrestricted.Although the Planning Department’s 1996 Urban RenewalStrategy Study (which preceded the 2001 URS) addressedthe issue of industrial buildings, 100 it took a limitedapproach whereby the URA would only directly redevelopindustrial buildings when it was able to bundle them withadjacent residential ones, while facilitating private sectorredevelopment elsewhere. As of June 2010, only one projectin Sai Wan Ho (H14) involves the redevelopment of anindustrial building. 101 Reasons given for this comparativelyhands-off approach were vague, but seemed to indicate areluctance to displace the few remaining industries relyingon inexpensive factory space. 102Land premiums are possibly the most important factorcontributing to market failure in urban renewal, but theyare not the only factor. There are many other contributingreasons, only some of which the government has attemptedto address. Many of them are related in some way to HongKong’s unusual land tenure system and its high land pricepolicy.The Problem ofMulti-OwnershipOne of the most commonly cited barriers to privateredevelopment is the multi-ownership of buildings. HongKong’s land shortage, which forced the city to developvertically, means that most buildings are held under multiownership.The specific form of multi-ownership mostcommon in Hong Kong is that of undivided shares, whichmeans that each person who buys a flat in a building acquiresa share in the apartment building and the exclusive rightto use the flat. They also acquire a share in the building’scommon areas and are thus obligated to contribute to theirmaintenance.This form of land ownership emerged in 1931 when theeconomic depression left many flats vacant. In order toaddress this problem, the government began to charge ratesaccording to rented flats instead of the whole land lot. AfterWorld War II, multiple-ownership by tenants-in-commonbecame the dominant form of land ownership as it becameincreasingly unaffordable for a single individual to ownan entire lot. This was legally recognized in 1956. Thegovernment also enacted the Law of Property (Enforcementof Covenants) Ordinance to put into place buildingcovenants to govern the maintenance and management ofbuildings among residents. 103This meant that any owner seeking to redevelop a plot mustgain the agreement and cooperation of all the other owners.A developer seeking to buy a building for redevelopmentmust purchase each unit in the building individually. Thismade the process of land assembly in built-up areas a longand difficult process, unattractive to most developers who areprimarily interested in quick returns. A developer wishing tobuy out an old block must first attempt to predict the finalsale price after redevelopment depending on the forecastedprice per square foot multiplied by the gross developablefloor area. It must then estimate the construction costs,professional fees, land premium and interest. From there, itworks backwards to find the maximum amount it can offerthe current owners, leaving enough for a profit margin.However, owners may demand more compensation —especially the last few remaining ones. Another barrier toredevelopment has been the problem of missing or defectivetitles which prevent buyers from completing a transaction.In light of these obstacles, few investors have the longtermvision to engage in projects that may not yield greatreturns until many years later. 104 One major exception is theentertainment entrepreneur Allan Zeman, who spent twodecades buying up properties in Lan Kwai Fong and growingit into Hong Kong’s most prominent bar and restaurantdistrict — his business model involved the modification ofexisting buildings and the transformation of ground flooruses, enabling him to sidestep the problem of having to buyevery unit. 105 The typical developer, however, is primarilyinterested in acquiring a site, redeveloping it, and selling iton as quickly as possible.The government has made some progress in amelioratingthe barriers posed by multi-ownership. The Land(Compulsory Sale for Redevelopment) Ordinance, passedin 1999, enabled purchasers who have acquired 90% of theshares in a lot to compel the sale of the rest through theLands Tribunal. It has proved useful in instances where thelast remaining owners were holding a developer to ransom,such as in Swire’s redevelopment of industrial buildings inTaikoo Shing. 106 However, it has not been the panacea itwas hoped to be. In May 2009, the Development Bureaureported that since the law’s passage only 19 applicationshad been carried out. 107In January 2010, LegCo passed an amendment to theOrdinance lowering the threshold to 80% for buildingsover 50 years old (or 30 years old for industrial buildings)with fewer than ten owners. The reforms walked a delicate29

Left: Multi-ownership with inadequate management mechanisms makes it difficult forowners to coordinate building maintenance. Here, a business owner has painted theexternal walls of only his or her unit. Box 3Case Studyand politically controversial line between private propertyrights and the public interest in speeding up urban renewal,and were politically controversial as they were seen as aidingprivate developers. 108Multi-ownership in the form of condominiums or stratatitled office buildings exists in many cities around the world,though admittedly not on the same scale as in Hong Kong.It is the combination with other factors that makes multiownershipa seemingly insurmountable problem here. Landpremiums discourage owners from coming together toagree on redevelopment. A highly concentrated propertymarket dominated by a few large developers (as a resultof Hong Kong’s high land price policy) means that fewinvestors are willing to deal with small property owners forsmaller-scale projects with lower profit margins. Inadequateorganizational mechanisms in building management makeit harder to get individual property owners together todiscuss any redevelopment or refurbishment proposals.While multi-ownership is here to stay, there are potentialreforms in other areas that can ameliorate the problem.Town planner Ian Brownlee, who agreed to be interviewed for thisproject, recounted his personal experience in rehabilitating an oldbuilding. Brownlee lives in Happy Valley in an 11-storey block of flatsbuilt in 1951. This building was very much a typical older buildingunder poor management — it was poorly maintained, and there wereproblems with the electrical wiring, the plumbing, and the lift. Therewas water seepage, illegal structures, and common areas were nevercleaned. Brownlee participated in forming an owners’ corporation and inrehabilitating the building. His story illustrates how physical decay oftencomes about as a result of human problems, including corruption.The only form of building management was a mutual aid committee, towhich all residents paid a management fee. In reality, this committeewas non-operational and its decisions and funds were monopolized bythe chairman, who was not even a registered owner in the building.Many of the owners, especially elderly residents, were intimidated bythe chairman and reluctant to confront him.Eventually, some of the younger and better-educated residents led aneffort to set up a formal owners’ corporation and seize control of themanagement funds from the mutual aid committee. This required thehelp of the Home Affairs Department’s District Land Officer who providedtechnical assistance including offering to provide an accountant. Themutual aid committee chairman was forced to relinquish control andturn over the accounts to the owners’ corporation, upon which it wasdiscovered that he had accumulated HK$300,000 in management feesover the years all the while refusing to carry out repairs.The owners’ corporation then hired an architect to oversee the building’srefurbishment and a contractor to carry out the works. A competitiveinterview process kept costs down. The drainage and wiring weremodernized, the lift replaced, the exterior was renovated. The original1950s floor tiles and plasterwork were retained in the common areasas long-time residents had grown quite attached to these features. Theworks cost HK$3-4 million in total, which amounted to a little more thanHK$100,000 per household. When they were completed, home valuesincreased threefold.Brownlee considers the refurbishment to have been a great investment,both financially and in terms of building community. 11431

Why can’t Hong KongMaintain itsOld Buildings?32The previous section outlines the main reasons whyprivate developers find urban redevelopment financiallyunattractive. That still leaves unexplained the reasons why somany 40-year old buildings in Hong Kong have deterioratedto the point where redevelopment is necessary. There is acommon assumption in Hong Kong that buildings over 30years old are ripe for redevelopment, yet other cities aroundthe world manage to retain buildings for many decades, oreven centuries. Why is Hong Kong seemingly unable tokeep its older buildings in good condition?While it is often written that many buildings constructed inthe 1950s and 1960s were of poor quality and consequentlyhave short lifespans, many of the problems are not physicalbut human in origin. Given proper maintenance, thelifespan of Hong Kong’s older tenement blocks can beextended to 80 years. Instead, the problems lie in lack oforganization structures, inadequate enforcement of policies,and perverse economic incentives.Inadequate management ofbuildingsWhen buildings are held under multi-ownership, buildingmanagement, repair, and renovation are by necessitycollective enterprises involving dozens if not hundreds ofhomeowners. This can easily lead to a classic “free rider”situation where each individual wishes to benefit fromresources held in common (in this case, the building)while minimizing their own contribution towards itsupkeep. If even a minority of owners refuse to contributetowards repairs, this will disrupt the other owners’ effortsand the building’s condition will deteriorate. Buildings areespecially susceptible to poor management if their residentsconsist primarily of tenants and not owner-occupiers, or ifthe owners are uninformed, elderly, or poor.Structures must be put in place in order to ensureparticipation, enforce compliance, and organize themaintenance. However in 2009, out of some 39,000private buildings in Hong Kong, only about 16,200 hadowners’ corporations, and about 10,600 had no form ofmanagement whatsoever. 109While in the 1970s the government encouraged theformation of mutual-aid committees and kaifongassociations in high-rise multi-owner buildings, 111 thesebodies did not have any basis in the law, so there was noobligation to participate nor were their membershipsclearly defined. 112 The Buildings Management Ordinancewas passed in 1993 enabling homeowners to set up legallyrecognized homeowners’ corporations, and required certainmandatory provisions to be included in all existing andfuture DMCs so that they could no longer be a barrierto setting up owners’ corporations. The legislation wasstrengthened in 1998 and again in 2000, most notablyempowering the Home Affairs Department to order theowners’ corporations of poorly-managed buildings toappoint a professional building manager from a list ofapproved agents.The Home Affairs Department and the non-profit HousingSociety also provide legal advice, logistical support, andprofessional expertise such as accounting and buildinginspection. 113 This assistance is very valuable to flat ownerswho lack the knowledge to organize an owners’ corporationon their own and has helped many property owners torefurbish their buildings independently of the URA.In theory, most private buildings are governed by deeds ofmutual covenant (DMCs). This is an enforceable contractdrawn up between the developer, the building manager, andproperty buyers delineating the rights and responsibilities ofall parties with regard to the management and maintenance,and are binding on not just the first buyer but on allsubsequent owners. In practice, many older buildings didnot have DMCs at all, while many existing DMCs areineffective. Developers drafted them to minimize theirown responsibilities while simultaneously retaining formalcontrol and preventing residents from forming their ownowners’ corporations. 110However, it is still not mandatory to form an owners’corporation. While the Home Affairs Department maycompel a dysfunctional management committee of anexisting owners’ corporation to appoint a professionalbuilding manager, it cannot force residents to form anowners’ corporation if none exists.

Weak building maintenanceregulationsWhile the Buildings Department has the authority toinspect buildings and to issue mandatory orders to conductrepairs, unblock fire escapes, and remove illegal structuresetc., a long-standing problem was one of inadequateenforcement. The Control and Enforcement Division ofthe Buildings Department lacked the staff and resources toinspect buildings systematically or proactively, and reliedmainly on complaints from the general public. 115 There isalso a problem of insufficient enforcement of mandatoryrepair orders after they have been issued.In recent years, there have been various piecemeal initiativesto improve building safety. Since 1999, the BuildingsDepartment has launched several clearance blitzes ofunauthorized building works, at times employing teamsof private consultants to help carry out inspections. 116Buildings Department statistics show a substantial rise inboth the number of inspections and instances of compliancesince 2000, although thousands of repair orders are stillignored. 117There have also been a collection of piecemeal programmes,including a Voluntary Building Safety Inspection Scheme,low-interest loans for building repairs, 118 and a CoordinatedMaintenance of Buildings Scheme under which governmentdepartments and district councils have jointly nominatedabout 150 buildings for mandatory repairs annually sincethe year 2000. 119 However, voluntary schemes have had alow take-up since owners were simply unwilling or unableto spend money on repairs despite the offer of loans. 120The government has been gradually moving towardsthe idea that owners should be required to pay for theirown building inspections, and has been trying to draftlegislation to that effect since 2005. Under the proposalsbeing considered, the government would select 2,000 30+year-old buildings per year and require them to be inspectedand repaired, after which the buildings would have to be reinspectedevery 10 years. 121 The legislation has been heldup by opposition from district councils and low-incomeowners, and was finally tabled in LegCo in February 2010.However, even after the legislation is passed, enforcementis likely to remain a problem. The key problem is thatpenalties for non-compliance are too low. Many ownersprefer to pay the fines rather than comply with mandatoryrepair orders. And because Hong Kong has no policy oftaking away occupation permits for unsafe buildings, noncompliantowners are not motivated by the ultimate threatof losing their property.33

Perverse Incentives34While the lack of organizational structures and the patchyenforcement of regulations have contributed to the problemof decaying buildings, the problems would have been lesssevere had property owners had an economic incentive tomaintain their properties. Unfortunately, for many owners,the incentives run in the opposite direction. The reasons forthis are varied, some having to do with government policiesand practices, and others having to do with uncompetitiveand distorted markets.The legacy of rent control andprotected tenanciesUntil fairly recently, Hong Kong had policies of rentcontrol and security of tenure which applied to mostprivate domestic rental properties and some commercialproperties. Rent control legislation, which limitedthe rate at which rents could be increased, was firstimplemented in 1921. 122 In the post-war period, thegovernment’s attempts to repeal rent control were defeatedby strong public opposition, 123 and rent controls werenot only retained for pre-war residential properties butalso extended to post-war properties constructed before1981. 124 Rent controls were finally phased out in 1998. 125Rent controls were supplemented by security of tenure,which restricted the ability of landlords to remove tenantseven after their leases had expired. By 1973, tenantsbasically had unlimited security of tenure as long as theywere willing to pay the prevailing market rent on the flat.Landlords could not force them to leave unless they appliedto the Lands Tribunal for permission to repossess the flat fornon-payment of rent, self-occupation, or redevelopment. 126Tenants were also legally entitled to compensation ifrequired to leave. Security of tenure was abolished in 2004,after which new rental leases were no longer protected.Existing protected tenancies were gradually phased outunder a transitional arrangement.Rent controls and protected tenancies were a responseto extreme housing shortages, especially in the post-warperiod when a damaged housing stock was met by a floodof immigrants. In the era before widespread public housing,tenants feared drastic rent increases and exploitationby landlords. 127 While the root causes for Hong Kong’shousing shortages lay in its artificially limited land supply,rent controls and protected tenancies offered a simple andpolitically popular solution, at the cost of introducingadditional distortions into the marketplace.The distorting effects of rent controls and protectedtenancies have been widely studied by economists, andit is not the intention of this section to discuss themcomprehensively. However, some of these distortions dohave important consequences for urban renewal, both interms of redevelopment and upkeep of buildings.By making it less profitable to be a landlord, rent controlsreduce the willingness of developers to build more rentalaccommodation, thereby depressing the supply of housingand achieving the opposite of what they are intended todo. If new buildings are subject to rent controls as well,redevelopment is likely to be delayed. 128 When landlordscannot charge the full market value for their properties,they will usually try to save money by cutting down onmaintenance. Properties are therefore more likely tobecome run down. This worsens living conditions andcauses properties to deteriorate further.Security of tenure can also act as an impediment toredevelopment to some extent since it imposes a transactioncost on the decision to sell, redevelop or to otherwise upgradeproperties. One unfortunate effect of security of tenure wasthat it encouraged landlords to repossess their properties byillegally harassing their tenants. Some property owners evenpreferred to leave flats empty instead of renting them out,forgoing rental income in order to more easily resell the flatfor profit later.While rent controls and security of tenure have now beenphased out, they have left a legacy of run-down tenementbuildings on the urban landscape.

Lack of FinancingOne significant problem is the lack of mortgage financingavailable to owners of older properties. Hong Kong’s bankslend very conservatively in the mortgage market and aregenerally reluctant to offer mortgages on properties over10-20 years of age. They require both a higher downpayment and impose a shorter repayment period. Thestandard formula used by banks stipulates that the mortgagerepayment period + the age of the building should notexceed 40 years. Therefore, someone buying 30-year-oldproperty would only have 10 years in which to repay themortgage. Additionally, while someone who purchasesa new property can obtain a mortgage on up to 95% ofthe property’s value (partly subsidized by the Hong KongMortgage Corporation’s Mortgage Insurance Scheme), aperson trying to buy an older property is likely to be offereda much smaller loan. Ian Brownlee, who attempted toobtain a mortgage after his 1951 block of flats was privatelyrehabilitated discovered that banks were only willing tooffer a 50% mortgage.The effect is that this makes it difficult for owners ofolder properties to obtain the financing needed for repairthrough remortgaging. It also makes older properties lessattractive to individual buyers since they require such alarge down payment, thereby reducing the flat’s resalevalue. This further discourages owners from spending onmaintenance. These problems are recognized by the URA,which has introduced a preferential mortgage scheme forbuildings rehabilitated under its own programmes. 17banks have agreed to participate and offer rehabilitatedproperties a standard 70% mortgage on the property value,interest rates comparable to a 10-year-old building, and arepayment term of 55 years minus the age of the building.Additionally, the Hong Kong Mortgage Corporation(HKMC) has agreed to offer mortgage insurance equivalentto 15% of the property value, bringing the total mortgageup to 85%. This places rehabilitated buildings roughly onpar with a 10-year-old building on the secondary marketbut still does not approach the terms a borrower can obtainfor a new property. The programme is limited in scope— only buildings rehabilitated by the URA are eligible.Private owners who rehabilitate buildings on their own areexcluded.Why are banks unwilling to finance older properties? Onlypart of the answer has to do with the buildings themselves.With an assumption that buildings were made to lastonly 50 years, banks are reluctant to accept a property ascollateral if they are not sure if it will still be standing whenthe mortgage payment period ends. If the buyer defaults andthe property is foreclosed upon, banks are concerned aboutwhether the building will be in a good enough conditionto be worth the remaining value of the mortgage. 129 Sincebanks cannot accurately gauge a property’s condition orlevel of maintenance, they rely on a simple and conservativeage-based formula to minimize uncertainty. Other countriessuch as the UK overcome this problem by requiring olderbuildings to be surveyed and certified structurally soundbefore a mortgage is approved. 130 No such scheme currentlyexists in Hong Kong.The larger issue is the structure of the banking industry.Hong Kong’s banking industry is heavily reliant on theproperty sector. Between 2003 and 2008, loans for propertydevelopment and construction (including residential,commercial and industrial property) made up 24% of loansmade to all economic sectors. When one includes the valueof private residential mortgages in this figure, property canbe said to represent between 51% of the value of all loansmade in Hong Kong. 131 Banks rely on making large loansto developers, followed by supporting buyers of the newlyconstructed developments. This means that they have moreincentive to offer favourable loan terms on new propertiesthan on old ones, because this ensures that developerswill be able to sell their units and pay back their loans. 132Smaller banks are unable to fill the gap in financing oldproperties because they lack large enough deposit bases tooffer mortgages competitively, as neither developers northe government place deposits with them. 133 As developerssell their properties through agents, agents also have anincentive to promote primary sales over secondary sales.Economic historians have written about the symbioticrelationship that evolved between major developers andbig banks in Hong Kong. In 1979 HSBC offered CheungKong Holdings chairman Li Ka-shing a special untenderedbargain offer to purchase Hutchinson Whampoa, whichcemented Li’s economic rise and gained the bank anextremely loyal and very large client. 134 The concentratedHong Kong property industry generates such large profitsthat although HSBC is now a global bank, Hong Kong, asingle city of 7 million people, contributed 23.5% and 30%to its global profits in 2006 and 2007 respectively — morethan the rest of the Asia Pacific put together. 135Some bankers argue that government regulations andpolicies have exacerbated the situation, particularly thoseimplemented in the aftermath of the Asian Financial Crisisof 1997 in order to prop up the property sector. Conservativelending rules date back to the early 1990s, when the HongKong Mortgage Authority (HKMA), fearing speculativeinstability, established a non-statutory guideline requiringbanks to offer no more than a 70% loan on the value ofa residential property. It also required a minimum 10%deposit. 136 These rules were initially tightened during the1997 Financial Crisis as the government and banks worriedabout mortgage defaults.With the further collapse of property prices, the governmentdecided to create the HKMC to support the mortgagemarket. In 1998, the HKMC began offering an additional15% in mortgage insurance, and halved the deposit35

3STAVELY STREETPEEL STREET1WELLINGTON STREETKEY4Boundary ofredevelopment siteGAGE STREET2GRAHAM STREETGUTZLAFF STREET361MarketApproximate locationswhere photographswere takenCOCHRANE STREET3 4

Left: Graham Streetrequirement. 137 This policy also fulfilled the HKMA’s goalof promoting mortgage securitization (which banks weretraditionally reluctant to engage in) thus enabling themto indirectly regulate the banking industry’s exposure tomortgages. Out of administrative convenience, these policiesapplied to sales of new flats, but not old ones. Eliminatingthe minimum down payment allowed developers to makean end run around the 70% mortgage guideline. Eager todispose of their excess stock, they accepted smaller downpayments and offered customers supplementary loans.With a 70% bank loan, 15% from the HKMC, and anadditional 10% loan from the developer, purchasers of newflats could make as little as a 5% down payment. 138 Sellersof second-hand flats could not compete on those terms,buyers migrated to the primary market, and between 1997and 2001 secondary property market sales fell by 65%compared to 30% for primary market sales. 139 This skewedthe ratio of primary to secondary market sales from roughly20:80 to about 50:50 until 2004. 140In the long term, banks may have to change their mortgagepolicies out of necessity. The construction of new residentialunits has seen an overall downward trend since the late1980s, with an especially steep decline from 31,050 newresidential units in 2002 to a low point of 8,700 new unitsin 2008. The average level of residential completions from2000-2009 was 2/3 of what it was from 1980-1989. 141 Thismeans that Hong Kong’s building stock is ageing fasterthan buildings are being replaced. If this trend continues,banks may no longer be able to neglect the market in olderproperties, as buildings constructed before 1979 now makeup 35% of the total housing stock. 142 This may especiallybe the case since the cohort of 30+-year-old buildingsincreasingly includes not just scattered individual buildingsbut large private residential estates such as Mei Foo SunChuen. In recent years a few banks have modified theirlending terms for older properties to be somewhat moregenerous, although still not as generous as those for newproperties. For example, in 2007 the Bank of East Asiaincreased its standard loan repayment period from 50 yearsminus the building’s age to 70 years minus the building’s age.(Its promotional literature refers specifically to Mei Foo SunChuen and Chi Fu Fa Yuen). 143 If construction continues ata slow pace, other banks will likely follow suit.Planning BlightPlanning blight is a term that describes what happens whenplanning restrictions are imposed on a piece of land so thatthe owner is no longer allowed to redevelop the land orderive a “reasonably beneficial use” from it. The owner thenfinds him or herself unable to sell the land except at a verylow price. 144This usually happens when the government zones a pieceof land for some future public purpose, but takes noimmediate steps to resume it. The buildings on it thenstart to deteriorate because the owners no longer have anyincentive to take good care of them. Blighted buildingsoften become magnets for subdivided cubicle flats sincelandlords who can no longer expect to reap any benefitfrom improving their property instead resort to crammingin as many tenants as possible. Poor tenants are willingto tolerate such quarters in the hopes of being one dayresettled in public housing. This accelerates the buildings’physical decay.Several of the projects taken on by the LDC and URA wereoriginally on land zoned for open space or GIC facilities. Forexample, the site of the LDC’s Grand Millenium Plaza andthe Cosco Tower were formerly zoned for open space andGIC facilities, where the government originally intendedto build a market and some open space. 145 However, inthe absence of any programme to acquire the land, thebuildings were left to decay for years. Finally the site wastargeted by the LDC for comprehensive redevelopment,and a 3,300 m2 public square, a home help centre, and amarriage advisory council office were incorporated into thecommercial development. 14637Similar problems can occur when an area under multiownershipis zoned as a Comprehensive Development Area(CDA). CDAs were a zoning designation introduced in

381 2

Left: Graham Streetthe 1970s to indicate that that the government wished tosee comprehensive, rather than piecemeal redevelopmentin a relatively large area of several blocks. It was thoughtthat comprehensive development would resolve planningproblems such as inadequate community facilities and openspace, inadequate infrastructure, inefficient street layouts,and incompatible land uses. 147 All development within aCDA must be approved by the TPB, and in most cases theTPB will reject proposals for the small-scale redevelopmentof just one or two plots if they interfere with the overallplan.If the owners within a CDA wish to comprehensivelyredevelop, they need to come to an agreement with allthe other owners. If a developer wants to build somethingwithin a CDA, he has to buy up most of the properties in it(although he is allowed to do this in phases).While some CDAs, such as Taikoo Place, have beensuccessful, others have resulted in something akin toplanning blight as the owners were unable to come to anagreement, nor were developers able to acquire the site.This was the case in the URA’s Hanoi Road project, whichhad been zoned as a CDA since the 1970s. The owners wereunable to reach an agreement, the buildings deteriorated,and the project was eventually taken on by the LDC in theearly 1990s. 148 (This was one of the few LDC/URA projectswhere the owners shared in the profits of redevelopmentinstead of simply accepting compensation. 149 ) The Mertonand Tsuen Wan Vision City were CDAs that were originallysupposed to have been redeveloped by the Housing Society,but for various reasons that never happened. They continuedto decay for years before they were taken on by the LDCand URA. In recognition of the problem of blight, the TPBbegan in 1998 to re-evaluate CDAs and rezoned some toother uses, reducing their number from 157 to 114 between1998 and 2002. 150If not for planning blight, there may not have been a needfor the LDC or the URA to take over certain sites at all.Yet the LDC inadvertently worsened the problem in manycases. In 1998, the LDC announced a number of projectsbut never got around to implementing most of them. 25projects were inherited by the URA in 2000, and it took theURA nine more years to officially commence them all. 151In the meantime, project sites already in poor conditiondeteriorated even further. The owners saw no sense ininvesting in repairs if their properties were going to bedemolished anyway.A cursory visual inspection of buildings slated to bedemolished in Graham Street, Peel Street, and StauntonStreet found that many of them are in a very dilapidatedcondition, with bare crumbling concrete and brokenwindows. Yet similar buildings a short distance away werein noticeably better condition, and some even appeared tohave been fully refurbished by private owners.Blight should become less of a problem for future URAprojects, since projects are no longer announced yearsahead of commencement. Under current policy (see PartI), unless the URA decides to begin public consultationsin advance, the public will only find out about a projectwhen it is formally commenced and gazetted, after whichan objections process or town planning approval processof a definite length will begin. Then after receiving finalapproval from the Secretary of Development or the TPB,the URA has a one-year time limit in which to purchase allthe properties.Yet while this lack of transparency may limit blight atspecific redevelopment sites, on a broader scale it blanketsentire districts with uncertainty. The URA operates in ninetarget areas: Kwun Tong, Ma Tau Kok, Sai Ying Pun, ShamShui Po, Tai Kok Tsui, Tsuen Wan, Wan Chai, Yau MaTei, and Yau Tong. Residents living in there cannot predictwhen or where the URA will intervene, nor is it necessarilyreasonable to assume that the most dilapidated buildingswill be targeted first. The URA’s list of 200 projects wereselected on the basis of opaque criteria, nor did the publichave any input. This overall uncertainty could depressincentives to invest and rehabilitate buildings in general.Placing more control over redevelopment into owners’hands would eliminate the problem of uncertainty. If theURA’s role was limited to organising owners who wereinterested in redevelopment, they would avoid the threatof having their investments in maintenance go to waste.For example, the URA could work together with the HomeAffairs Department to organize owners’ committees indilapidated neighbourhoods so that the owners can voteon whether to pursue redevelopment or repairs. Followingtheir decision, the URA could partner owners up withdevelopers, or provide expertise and funding to carry outrepairs.39

40The URA’s compensationpolicyA little-explored area of inquiry is the effect the URA’soperations may have on the market for redevelopmentand rehabilitation. It is beyond the scope of this sectionto empirically prove the URA’s impact on the propertymarket. Rather, the goal is to outline what one might expectto happen according to conventional economic theory inorder to open up areas of inquiry for future researchers.When the URA bill was initially being drafted in 2000,some experts and professional bodies put forward the viewthat the government should refrain from engaging directlyin property development; they argued that the primaryrole of the URA should be to facilitate private sectorurban renewal and that direct involvement should be alast resort. 152 The concern was that the URA should notcompete unnecessarily with private companies, and that asa government agency with special powers and subsidies, itwould have an unfair advantage. The government did notagree with them and sought specifically to strengthen thebody in order to intervene directly in the market.The URA’s advantages over private companies, mentionedin Part I, are summarized below:a.b.c.The URA does not have to pay land premium, givingit and its private sector partners a large advantage overnon-participating developers.It can use the power of mandatory resumption, and iseven required to invoke it within a certain time limitby its ordinance. Private developers cannot requestcompulsory purchase until they have acquired 90% ofall the shares in a piece of land.The URA pays above-market rates in compensationto displaced homeowners as a matter of policy. Thismeans the URA offers more than what a regularresidential buyer would be willing to pay, and inmany though not all cases, more than what a privatedeveloper would pay. (Owners can sometimes extractsignificantly more than the market price out of aprivate developer, especially if they are one of the lastowners to sell.)Based on these advantages, we would expect that:a.b.c.d.e.Owners of aged properties will prefer to sell to theURA over ordinary home buyers (who are fairlyscarce), and in some cases will prefer to sell to the URAover a private developer.Private developers will find that they have to at leastmatch the URA’s standard offer in order to induceowners to sell.With the offer of higher prices, more owners willwish to sell their properties either to the URA or to adeveloper who makes an equivalent offer; but since thisraises costs, private developers will want to purchasefewer properties.In orthodox economic theory, whenever there are morepeople who wish to sell than people who wish to buy,a queue of sellers forms. Owners will wait for yearsfor the URA to buy them out, perhaps even forgoingopportunities to sell at a lower price or to put theirproperties to more productive uses.A corollary is that owners waiting to be bought out by theURA are unlikely to invest in renovating or rehabilitatingtheir properties, since owner improvements are notrewarded by a higher compensation level. Due to theuncertainty of where and when the URA will conductits next projects, owners may see little option but towait for resumption. The possibility of mandatoryredevelopment makes aged buildings in targeteddistricts into unattractive investments and probablydepresses their regular market price. Owners mighteven believe that leaving their buildings to deterioratewill increase the likelihood of intervention, resultingin generous compensation.

From the point of view of private developers, we mayadditionally expect that:a.b.Private redevelopment will become more unattractivedue to the increased costs of having to compete withthe URA, which enjoys indirect subsidies and taxbreaks.Conversely, waiting for the URA to absorb the costsof resumption, and then participating in joint ventureprojects with the URA would be more attractive.Essentially, we would expect that the URA will displacea certain amount of private sector redevelopment andrehabilitation, and secondly that the URA might actuallyfoster perverse incentives against building maintenance.These conclusions are by necessity based on heavilysimplified economic assumptions, and in real life there maybe many confounding factors. Thorough statistical researchwill have to be conducted in order to ascertain whether, andto what extent, these two hypotheses hold true.However, there is some anecdotal evidence to supportthem. Firstly, there are a few concrete examples of the URAdisplacing private sector projects and entering into biddingwars with the private sector. The Staunton Street project isone such example, where Henderson Land went to courtto exclude its land from mandatory resumption. There wasanother similar example in Sham Shui Po, where a privatedeveloper, Golden Light Services, had been planningto redevelop a section of Hai Tan Street in joint venturewith the owners since the 1990s, but whose project wascancelled because the site was folded into a larger URAredevelopment plan. 153 Additionally, the Sneaker Streetproject was an example where a private developer workingwith disgruntled shop owners entered into a bidding waragainst the URA, driving up costs.As for building maintenance, the Hong Kong HousingSociety has noted that one obstacle to persuading people toform owners’ management corporations is that the ownersprefer to wait for redevelopment instead. 154 Lau Ping-Cheung, who was a non-executive director of the URAand represented the architecture, surveying and planningsectors in LegCo also shared this view. In a 2003 debate onmandatory building inspections, he said:“Not only were large amounts of public funds requiredto subsidize a small number of owners who refuseto shoulder their own responsibility of repairs andmaintenance, this is also being unfair because awrong signal will be sent and owners are indirectlyencouraged, by dint of the handsome compensationsoffered by the URA in acquisition, not to carry outrepairs and maintenance and let their buildings fallinto disrepair in order to wait for acquisition of theirbuildings by the URA. Therefore, it is necessary forthe Government to review the present acquisition andcompensation system as soon as possible.” 15541

Part III:The Impact of42Urban Renewalon theBuilt Environment

The Built EnvironmentPart I discussed the origins of the URA and Part II examined the broader political-economiccontext of Hong Kong’s urban renewal policies. Part III aims to document and criticallydiscuss the impact of urban renewal on Hong Kong’s urban landscape. Urban renewal hasdramatically changed many of Hong Kong’s neighbourhoods. Policies aimed narrowlyat addressing physical dilapidation and rationalizing land use have had repercussions forneighbourhood morphology, street-level vibrancy, public open spaces, the environment,and local economies. If we want to improve our urban renewal policies, it is necessary tounderstand their impact on all of these areas. This chapter will show that redevelopment’seffects on Hong Kong’s neighbourhoods are not a result of the URA alone, but arise from theinteraction between the URA’s commercially-driven redevelopment model and Hong Kong’sstandard planning and building regulations. The URA enables these “one size fits all” rules tobe inappropriately applied to fine-grained old neighbourhoods on a scale rarely achieved byprivate developers acting alone. If we wish, through urban renewal reforms, to improve thebuilt environment as opposed to merely speed up redevelopment, we will need to review ourbuilding, planning, and heritage preservation regulations and policies as well.The Morphology ofURA redevelopment projectsThe Average URA Redevelopment ProjectBased on an analysis of all 43 announced redevelopment sites as of January 2010:---The URA picks sites with a substantial plot ratio gain potential. The typical URAproject replaces 6-8 storey 1950s/60s tenement buildings with 40+-storey towerson podium blocks. On average, there is a nearly threefold increase in GFA. Theaverage site has a pre-redevelopment GFA of 14,454m 2 , while the average postredevelopmentGFA is 41,342m 2 . 156 (See Appendix 1)Sites vary greatly in size. The smallest is Baker Court in Ma Tau Kok, demolished2 buildings and covers 227m 2 . The largest is Kwun Tong Town Centre, which willdemolish 24 buildings and cover 53,500m 2 .The median number of buildings demolished is 14.43MethodologyAs it was not feasible to conduct a comprehensive review of all URA projects, ten redevelopmentprojects and one preservation project were selected for study. Between May and Decemberof 2009, site visits were conducted. These projects were chosen for variety in terms of size,type, and location. Photographs were taken showing size and massing, relationship with thesurrounding neighbourhood, ground floor frontages, public open spaces, and GIC facilities.Additionally, Master Plans for seven of the redevelopment projects were obtained from thePlanning Department. These were scanned and where necessary superimposed on publishedstreet maps to produce the maps shown in this report.Please see table 1 overleaf for details of the 10 redevelopment projects visited.---Most URA projects require setting aside public open space, building GIC facilities,such as kindergartens, centres for the aged or disabled, offices for charities orgovernment departments, community halls, cooked food markets and publictoilets.The larger developments also include transportation facilities like minibusterminuses, parking garages, and taxi lay-bys to reduce the need for vehicles tostop on the street.Most URA projects are mixed use developments with retail in the podium andresidential towers on top. Sale of flats provides immediate return on investment,while retail/office space provides long-term rental income.

ProjectDistrictSite Area(m 2 )GFA(m 2 )Height / No. of floorsBuilding UsesPublic Facilities(m 2 )Langham Place Mong Kok 11,976 167,419 255.1m / 59 floors Office, hotel, retailPOS: 1,100GIC: 6,548Beacon Lodge Sham Shui Po 1,394 12,537 151.45m / 42 floors Residential, retail POS: 250Vista Sham Shui Po 1,384 12,453 171m / 46 floors Residential, retail POS: 250The Merton Kennedy Town 6,075 62,904 182m / 59 floors Residential POS: 2,300The Zenith Wan Chai 6,782 62,310 147.6 — 157.9m / 45-49 floors Residential, retail GIC: 6,30044J-Residence Wan Chai 1,970 20,567 48 floors Residential, retailVision City Tsuen Wan 20,300 130,199 185.7m / 52 floors Residential, retailUnofficial POSon rooftopPOS: 3,700GIC: 3,080The Dynasty Tsuen Wan 7,230 43,854 198m / 67 floors Residential, retail NoneHanoi Rd. Project K11 Tsim Sha Tsui 8,299 102,626 282m / 69 floorsHotel, retail, servicedapartmentsPOS: 1,219Waterloo Road Yau Ma Tei 3,869 32,012 132m / 41 floors Residential POS: 1,650Western Market(preservation project)Sheung Wan N/A N/A 3 Retail -Source: URA, project masterplans courtesy of URA and Planning Department

Left: The K11 shopping mall, hotel, and serviced apartment development (centre) on Hanoi Road is now Tsim Sha Tsui’s tallest building.ScaleURA developments often visually dominate their surroundings, especially projects built onlarge sites.Although the podiums are not much taller than surrounding buildings, the absence ofhuman-scaled details on their facades make them look out of scale and difficult to relate to.At small building sites, the increase in density results in “pencil towers”, such as the Vista inSham Shui Po.Why do URA developments look so big?URA developments appear so large because of:1.2.Context. They are located in old neighbourhoods where the existing buildings andblocks are much smaller and finer in comparison.It has powers of compulsory resumption, so the URA is able to assemble larger sitesthan private developers in old neighbourhoods, and is often allowed to build overstreets, creating superblocks. This effectively gives it extra plot ratio. (See box.)Large sites feature multiple towers, which depending on their configuration, may create a“wall effect”.It may appear that the URA is allowed to build to higher densities than private developers,but in fact this is not the case. URA developments are not allowed to exceed maximumBuildings (Planning) Regulations plot ratio and site coverage, and if the URA wants toexceed statutory plot ratio or height requirements it must apply for TPB permission in thesame manner as private developers. 1573.4.The Buildings (Planning) Regulations allow commercial podiums to cover the entiresite up to a height of 15 metres (about 4-5 storeys). Where sites are big, podiums canappear very bulky.The towers on top of podiums often use up less site coverage than is permitted, and aretherefore allowed to be taller. Developers have financial incentives to build tall narrowtowers because this leaves more podium-top space for private recreational facilities, andhigher floors command higher prices. Therefore, bulky podiums are combined withvery tall towers. If the towers are arranged in a wall formation, the development looksenormous even though the towers’ site coverage is actually small.455.URA buildings are usually required to provide open space, GIC facilities, and pedestriansetbacks. These come with standard GFA incentives. Open space and GIC facilities aredeductable from site coverage and GFA calculations, while pedestrian setbacks underthe Buildings Ordinance are compensated with bonus plot ratio.6.Big buildings are required to have more parking facilities, which are also GFA deductible.This can add considerable bulk to podiums.

46Left to right: 8 Waterloo Road residential podium in Yau Ma Tei; Vision City in Tsuen Wan has five 42 to 44-storey residential towers, closely spaced in a crescent formation. Its site area is20,300m 2; ; Beacon Lodge development in Sham Shui Po with a site area of 1,394m 2

Box 4Calculating Plot RatioPlot ratio is the ratio of a building GFA to the area of the site that it is built on. Ifa building site is 1,000m 2 , and the plot ratio is 6, then it would have a gross floorarea of 6,000m 2 .Plot ratio and building heightPlot Ratio = Gross Floor Area ÷ Site Areatherefore:Plot Ration × Site Area = Gross Floor AreaPlot ratio, which is a measure of density, should not be confused with building height. The same plot ratio can produce buildings of vastly different heights,depending on their site coverage. If the plot ratio is 6, and a building covers 100% of the site, it would be 6 storeys high. If the building covered just 50% of the site,leaving the other 50% as open space, then the building would be 12 storeys high. If site coverage is only 25%, the building would be 24 storeys high.48

One large site yields a higher GFA than several smaller onesOne advantage the URA has over private developers is the ability to build over streets. This enlarges a site and yields extra GFA. For example, the K11 project hasa site area of 8,299m 2 , of which 1,200m 2 was provided by incorporating the former Cornwall Avenue into the project site. This increased the permitted GFA by 17%from 85,188m 2 to 99,588m 2 , excluding bonus floor area obtained in exchange for pedestrian setbacks. 15849

50Standardized ArchitectureStandard building regulations and the need to maximize internal GFA forcea certain amount of standardization in design. Most of the URA’s completedprojects look very similar to one another. The few exceptions are commercialflagship projects, such as K11 in Tsim Sha Tsui and Langham Place in Mong Kok(this page). However, while these two buildings were designed to be distinctive,they were not designed to relate visually to their surroundings, instead appearingas if they were designed to sit alone in space. Langham Place’s monumentalgranite walls turn a blank face to the neighbourhood.Two other exceptions are J-Residence and Phase 3 of the Zenith, both in WanChai, which have architectural diversity because they preserve parts of olderbuildings.

Left to right: 8 Waterloo Road, Yau Ma Tei; Beacon Lodge, Sham Shui Po; The Dynasty, Tsuen Wan; J-Residence, Wan Chai; Hanoi Road Project K11, Tsim Sha Tsui; The Merton, Kennedy Town;Vision City, Tsuen Wan; The Vista, Sham Shui Po; The Zenith, Wan Chai.51

Left: Langham Place, blank facade on Portland StreetSuperblocks As stated above, large site URA developments often involve bulky podiums and buildingover streets. This combines several smaller blocks into one large one.Urban designers have noted that very large blocks are rarely able to sustain outdoor streetlevelvibrancy. A neighbourhood consisting of large blocks will offer fewer routes from Ato B than a neighbourhood consisting of small blocks (assuming one cannot pass throughthe middle of blocks). There are fewer opportunities to turn corners, thereby reducing thelikelihood that users of different streets will cross paths. 160 The diagram on the right showsthe possible routes from a bus station (A), to two different office buildings, B and C. In thesmall block scenario, there is one possible route to B and three possible routes to C. In thelarge block scenario, there is only one route to B and C each. If a shop owner wants to setup in a place where he can capture foot traffic to both buildings, then there are many moredesirable locations in the small block scenario than in the large. There is also more totalstreet frontage, as small blocks have a lower permeter-to-area ratio. A second problem isthat even when large blocks are permeable, such as in the case of shopping malls, there areusually few entrances and exits, and pedestrian traffic is drawn in to the internal networkof air-conditioned corridors. 161 This does not necessarily reduce overall vibrancy, but it doesmean that the vibrancy takes place indoors in a privately-owned space, isolated from thesurrounding neighbourhood. One rarely finds many people or shops on the outside of a largeshopping mall — instead, their perimeters are used for servicing functions, such as refuse collection, fire exits, electrical and pump rooms, car park entrances, and vehicle drop-off points. 53

54Below: While The Zenith does not offer any retail space on Cross Street, the older buildings on the opposite side of the street do.Opposite: The Cross Street market in Wanchai is squeezed up against The Zenith’s podium.

56Figure-ground diagram of Langham Place before and after redevelopment. Hong Lok Street, the site of the old bird market, was eliminated. The original1991 LDC proposal for Langham Place intended to build over Shanghai Street as well, but this was rejected by the TPB for having excessive plot ratio(15.7), being “neighbourhood unfriendly”, and for violating the Buildings Ordinance. 159

Figure-ground diagram of Tsuen Wan Vision City and The Dynasty before and after redevelopment. Vision City combined four blocks together, eliminatingthree cross streets. The Dynasty was built on a new (greenfield) site on reclaimed land .57

58This page: Footbridge network over Tai Ho road.Opposite: The pedestrian pavement on Tai Ho Road.

59Box 5: Tsuen Wan, Vision City/CitylinkThe deadening effect of superblocks can be seen around Vision City/Citylink, a superblock created out of aneighbourhood previously known as the Seven Streets.There is now a shopping mall podium surrounded on three sides by busy arterial roads, Sha Tsui Road, Tai HoRoad, and Yeung Uk Road. There are very few ground level crossings across these roads. The URA was requiredto build a network of footbridges across them. This has lifted pedestrians off the ground level, bringing themdirectly to the Upper Ground level of the shopping mall.This means that only one side of the development is suitable for active frontage — Wo Tik Street, a narrower streetwhich faces onto the local wetmarket/shopping district.The other three sides are taken up by a minibus terminus, servicing areas, a car park entrance, the residentialentrance, and are alienating for pedestrians. Oddly, the GIC facilities (a hostel for the handicapped and a daycentre for the aged) are also located on a relatively inaccessible corner.

Left: Wo Tik Street - the only active external frontage at Vision City development.Single Developer, Homogenous DevelopmentEach of the redevelopments is conducted by a single developer or partnership. At each siteof the sites visted, between 8 and 58 buildings were demolished, the plots amalgamated, andthen rebuilt as one large comprehensive development. Wherever more than one building iserected, they are essentially identical both in appearance and function. The main exceptionto this rule is the J-Residence development in Wan Chai, where variation came about as theresult of preservation. In no cases have large lots been broken up into smaller parcels.ProjectLocationNumber ofbuildingsaffectedLangham Place Mong Kok 58Beacon Lodge Sham Shui Po 8Vista Sham Shui Po 8The Merton Kennedy Town 15Number of buildings erected2 (shopping mall/office tower, andhotel)1 (single residential tower on top ofshopping podium)1 (residential tower on top ofshopping podium)3 residential towers on top of2 separate car park/clubhousepodiumsThe Zenith Wan Chai 31 3 towers on top of 2 podiumsJ-Residence Wan Chai 21 3 (2 are preserved shophouses)Vision City Tsuen Wan 225 residential towers on top of 1large shopping mallTai Yuen StreetExgBldgExgBldgExistingBuildingCross StreetZenithSite APodiumExgBldgExgBldgWanchai RoadZenithSite BZenithSite C61The DynastyHanoi Rd.Project K11Tsuen Wan0(Greenfield site)Tsim Sha Tsui 202 towers on top of 1 shopping mall2 buildings (actually part of samedevelopment, separated bypedestrian passage)Queen’s Road East8 Waterloo Road Yau Ma Tei 19 2 towers on 1 podiumThe practice of amalgamating sites has resulted in some quite irregularly shaped plots —and irregularly shaped podiums, such as Site A of the Zenith in Wan Chai.The Zenith, Site A, Wanchai

Left: In Mong Kok’s Sai Yeung Choi Street, these old buildings have been colonized and largely rehabilitated by toy shops and restaurants. Old buildings with lower rents are attractive spaces forsmall businesses catering to niche interests.There are three rationales behind the amalgamation of plots:1. Administrative convenience. It is easier to tender out a project to a single developer, andto manage that developer during the planning and construction process. 1622.3.Hong Kong’s planners operate on the modernist principle that large, comprehensivedevelopments are more efficient than various smaller ones. Parking and servicing,transport interchanges, separation of pedestrian and vehicle traffic, community facilitiesand open space can be provided more easily and with less duplication, enabling higherdensities to be accommodated. 163Maximizing GFA. Under Hong Kong’s Buildings (Planning) Regulations, sites aredivided into classes A, B, and C depending on whether they abut the street on one, two(i.e. occupying a corner), or three sides (i.e. occupying at least two corners) respectively.Due to daylight requirements, corner sites are allowed a higher plot ratio than sites inthe middle of a street, and sites that occupy two corners are allowed an even higher plotratio. 164 Therefore, if the goal is to obtain the highest plot ratio possible, you shouldcombine plots so that the resulting site faces the street on as many sides as possible. 165However, large scale redevelopments which place large sites under a single ownership andmanagement have some urban design disadvantages:They reduce the richness and variety of land uses, even if mixed uses are formally retained.This is because while buildings of different ages and ownerships can offer businesses andresidents a variety of rents and tenure options, a large shopping centre or housing developmentimposes homogeneity. 166A district’s character can be an economic asset. Except for the very largest or high-endshopping malls, few people visit standardized shopping centres outside of their own districts— there is usually another one just like it closer by. On the other hand, districts whichoffer a unique mix of shopping, eating, and entertainment options such as Wan Chai andMong Kok draw visitors from across the city and a significant number of tourists, in spite ofdrawbacks such as air pollution and traffic congestion.Large developments also reduce the adaptability of the urban fabric. They freeze in place ofthe economic and social priorities at the time they were built, yet a city’s economic and socialcircumstances are constantly shifting. In the future, when a large development becomeseconomically obsolete, it will be difficult to convert it to new uses. In contrast, smallerbuildings can adapt incrementally to economic change. 16763

Public Open Spaces and Pedestrian PassageSetbacks andPassages for PedestriansWhat effects have the URA’s projects had on the public realm? This is not a simple questionof whether new buildings visually fit in with the older ones, but whether the public spacescreated are congenial, inclusive, and accessible spaces for people to use. Do they facilitatesocial interaction or create exclusion? These questions are relevant because one of the tasksthe URA has been given is to create better public spaces, and has been indirectly subsidizedto do so. Are these subsidies worth it?In many of the projects visited, the URA/developer was required to provide pedestrianpassage areas, or voluntarily made use of provisions in the Buildings Ordinance to obtainbonus plot ratio in return for providing pedestrian passage. They include widenedsidewalks, covered pedestrian concourses, or footbridges over roads.The planning process involves securing the approval of the Transport Department andthe TPB. The pedestrian areas are then written into the lease by the Lands Department.Responsibility for their upkeep and maintenance typically remains with the building’sowner, and the Lands Department includes them on its list of privately managed publicopen spaces. (In a few cases, they are also included in the Building Department’s listas they have been dedicated to public use in a deed of dedication under the BuildingsOrdinance).Site visits found very mixed results. Some of the pedestrian passages are well-used andeffective, while others are underutilized due to inactive frontages, land use changes, ormisalignment with pedestrians’ desire lines. One case of serious mismanagement wasdiscovered. The less successful cases highlight some of the inherent tensions betweenpublic and private interests in the use of these spaces. Below, we will highlight some ofthe more remarkable cases of success or failure in order to identify the most importantcontributing factors.65Left: Advertisements outside the Citywalk/Vision City development in Tsuen Wan. Large shopping malls attract mainly large chain brands due to the relative uniformity of their rents and tenure options.

66Clockwise from left: empty flower beds and a water feature inside the “garden”; the entrance toSite B’s pedestrian concourse on Catchick Street; the Davis Street exit is blocked off by heavymetal railings.

The MertonThe Merton in Kennedy Town provides the worst example of an unsuccessful pedestrianscheme. The Merton is a three-tower residential development split between two sites oneither side of Catchick Street on the Kennedy New Town Praya waterfront. It is one of theURA’s first projects, having been inherited from the LDC. Its construction was completedin 2005.Kennedy New Town PrayaIn return for bonus plot ratio of 2 for site A, and 1.8 for Site B, representing a total of11,605m 2 , two covered pedestrian concourses and an elevated footbridge (not yet built) wereprovided for pedestrian passage. In addition to the pedestrian passages, two separate areashave been set aside for public open space, which are managed by the Leisure and CulturalServices Department (LCSD). (The recreational areas will be discussed in the followingsection). The map of the ground floor plan on the right shows the pedestrian concourses. Allare located under the building podium, where they are intended to relieve pedestrian foottraffic on the pavement by allowing people to travel directly from one end of the building tothe other. Both sites’ passages are ineffective, and one has been seriously mismanaged.At Site B, the pedestrian concourse has been rendered unusable due to metal railings (markedin red on the map) blocking off access and converting the through-passage into a dead end. Asign at the entrance describes it as a “landscaped garden”, open to the public between 6 a.m.and 10:30p.m. However, it is unused because it is not very accessible, unattractive, poorly lit,and feels unsafe. It appears that the building management installed the railings to discourageuse in order to minimize maintenance needs. The TPB did not foresee this outcome whenit approved the Master Layout Plan, and Site B was granted an additional 4,117 m 2 of floorarea under the Buildings Ordinance in return for it.The pedestrian concourse on Site A is physically accessible, but is rarely used for a number ofother reasons. Firstly, it provides a path from the Davis Street open space to Cadogan Streeton the opposite side, where the old abbatoir used to be (it is now a construction site for theMTRC). This does not follow existing pedestrian desire lines and is a detour for anyonetravelling along Catchick Street.Cadogan StreetMERTONSITE APublicOpenSpaceResidentialLobbyPedestrianConcourseResidentialLobbyCatchick StreetRailingsPublicOpenSpaceResidentialLobbyMERTONSITE BPedestrianConcourseRailingsDavis StreetTram LineExistingBuildingsExistingBuildingsHau Wo StreetExistingBuildings67Pedestrian circulation around the Merton is low in any case because the purely residentialland use does not attract people. The pavement may have been crowded in the past becauseshops used to be there, but now they are gone.Additionally, the concourse looks more like a private entrance for the building than a publicarea. Only the building’s residents were seen using it to access their residential lobbies.ExistingBuildingsBelcher’s Street

68This page: The pedestrian concourse at Site A is mostly used to access the residentiallobbies of The Merton.

Left: The widened pavement along Shanghai Street is fairly well-used.Below: The pedestrian path continues behind some old existing buildings alongside thepublic open space created by the redevelopment. Children using the area for play oneevening in September 2009.8 Waterloo RoadThe 8 Waterloo Road development features a somewhat more successful pedestrian setback.It leads around a building, not through one. There are no physical obstacles, it provides ashortcut through the block that pedestrians find useful, and allows access to the public openspace.69

70Portland StreetLangham PlaceArgyle StreetShanghai StreetLangham hotelShantung StreetReclamation Street2m Pedestrian Setback in blueN

Langham PlaceThere are often pavement widening setbacks around major commercial developments suchas Langham Place because it is assumed that a large commercial building will generate a lotof pedestrian traffic.There is a 2m-wide setback virtually all the way around Langham Place (see opposite),including a corner setback with a small sculpture/seating area on Argyle Street. These yieldeda bonus GFA of not more than 5,565m 2 . There are also two pedestrian footbridges betweenthe shopping mall and the community centre in Langham Hotel, yielding a bonus GFA ofnot more than 840m 2 .The widened pavement is set under the podium’s overhang, providing shade and potentiallycreating an attractive colonnaded shopping arcade. However, the shopping mall is internallyorientedand few of the shops have street entrances, which discourages pedestrian use. Plannerscannot control the orientation of shops, which is determined by the mall’s management, butmost shopping malls can be expected to be internally-oriented since their strategy is to retaincustomers inside for as long as possible.71Clockwise from left: 2m-wide setback around Langham Place; map illustrating setback;Portland Street side, where the shopping mall main entrance and cinema are located, seesa fair amount of pedestrian activity despite the absence of accessible shop fronts; ShanghaiStreet sees very little activity because it runs between the mall and the hotel with inactivefrontages on both sides, people mainly use this street to catch buses and taxis; smallsculpture and seating area on Argyle Street gets plenty of use despite its noisy and pollutedlocation, it is located on the short end of the block with other shops on adjacent blocks nearby;Argyle street one block West from the Langham Hotel, the pavement is crammed with peopledoing their grocery shopping.

ObservationsPedestrian setbacks and passageways should not be provided based simply on assumptionsabout building density. Pedestrian flows also depend heavily on street-side land uses, which inturn determine desire lines. Paying insufficient attention to these factors is likely to produceunderutilized or unnecessary pedestrian spaces.72Top: Real estate agents resting at the URA-managed public open space at Beacon Lodge inSham Shui Po. At 250 m 2 , this is one of the smallest open spaces created by the URA.Bottom: This 3,700 m 2 courtyard in Tsuen Wan’s Vision City development is the largest openspace created by the URA so far.

Recreational Public Open SpacesQuantityQualityOne of the URA’s goals is to provide badly needed open space in congested older urbanareas. The Urban Renewal Strategy sets the goal of providing 60,000m 2 of open space withinthe first 20 years. After 8 years, the URA has built 11,675m 2 of public open space. Whenprojects under planning or construction are included, the number rises to 30,729m 2 .While site visits found no examples of severe mismanagement, the quality of open spacesvaried in terms of accessibility and design. The sorts of problems found are typical of publicand privately-managed open spaces in Hong Kong and are not specific to the URA. Overleafare observations about some of the more notable sites.However, this is actually quite a small percentage (15%) of the 202,157m 2 that the URA hasredeveloped/is planning to redevelop in total. The individual open spaces created are smallto medium sized sitting-out areas.2• The smallest two open spaces are 250m each, located in Sham Shui Po.• The median URA-created open space is 1,150m 2.2• The largest created by the URA so far is the 3,700m courtyard in the centre of TsuenWan’s Vision City project. The URA is planning to create 8,700m 2 of open space as partof the enormous 53,500m 2 Kwun Tong Town Centre project.As the URA’s method of creating open space depends on setting aside a portion of itsredevelopment sites, this means that the amount of open space created is determined by thesize of the site and its profitability. The largest open space created through redevelopmentwas not by the URA, but by the former LDC which set aside 6,000m 2 of the 8,818m 2 sitefor its flagship project, The Centre, in Central. The 73-storey commercial skyscraper wasbuilt on a narrow base so as to leave more open space available at ground level. 168 However,as prime commercial sites became less available, the URA was no longer able to set aside sucha large percentage for open space.Most URA spaces fall under the Planning Department’s definition of “local open space” —small sitting-out areas intended for neighbourhood use, as opposed to “district open space”or “regional open space” which serve larger catchment areas.

74The K11 public open space resembles part of the shopping mall. It is covered by a canopy, lined by shops and restaurants and has a large screen television display. A sign on the wall indicatesthat it is a designated public open space with 24 hour access.

Hanoi Road K11 Open SpaceSize: 1,200 m 2Management: PrivateAccess hours: 24 hoursLocation: Ground level, accessible from Mody Road and Carnavon RoadThis long strip leading from Mody to Canarvon Road used to be Cornwall Street, which wasincorporated into K11 and converted into a covered pedestrian lane. While it is formallyclassified as a recreational public open space, in actual fact it functions as pedestrian passage.As such, it was deductible from GFA calculations, but did not yield bonus GFA under theBuildings Ordinance. (However since it used to be a public street, the developer effectivelygained some bonus floor area.)75While heavily commercialized, the space does function very well as a pedestrian circulationarea. It was perhaps the most well-used public space at any of the sites visited. However, itscommercialized character may lead to disputes about who is allowed to use the space forwhat purposes, similar to the controversy over promotional exhibitions in Times Square in2008. It is also questionable whether street performers or political demonstrators would beallowed to use this space without permission from the management.This page: The space is decorated with large colourful ornaments and statues; during thesite visit in December 2009, one area was roped off for a performance/promotional platformwith sound and lighting equipment, indicating that the mall does in fact use this area as acommercial space.

Opposite from top: Ground level shops have been configured so that they face into thecourtyard and onto Wo Tik Street, producing active frontage on both sides; courtyard has aterraced structure, with retail space underneath each terrace, putting some of the open spaceat podium level enables the developer to give up less floor area for public open space; Theground floor is attractively landscaped, accessible, and popular.This page: The upper ground floor is essentially an outdoor corridor, and is practicallydeserted.Vision City, Tsuen WanThe open space is a courtyard in the centre of the Citywalk 1 shopping mall, and functions asboth a retail and a neighbourhood space accessible from Wo Tik Street (right). It is quite wellused.The URA also pioneered the installation of vertical greening panels in this project. 169(opposite bottom left)Location: Ground Level, Upper Ground Level and First Floor.Accessible from Wo Tik Street.Size: 3,700 m 2Hours: 6:30a.m. to 11p.m.Management: PrivateHowever, some design and accessibility problems were discovered. Part of the open space isnot at ground level, but at Upper Ground and First Floor levels as shown on the map onthe right.These areas are accessible by escalator, but do not function well as public open space. 77

78Clockwise from left: The ground floor is beautifully landscaped, but there is almost no seatinghere, it functions as an entrance way to the podium; a significant amount of the open space istaken up by a wheelchair ramp providing access to the upper level, here, teenagers use theramp for a photo opportunity; the sitting-out and children’s play area on top of the hoteldrop-off.

Langham PlaceLocation:Ground and podium level on Shanghai Street/Shantung Street.Accessible from Shanghai Street on ground level and from MongKok Community Centre at podium level.Size: 1,100 m 2Access hours:Management:6:00 a.m. to 11p.m.LCSDThis was one of the most awkwardly designed open spaces due to a large portion of it beinglocated at podium level on top of the hotel drop-off.79According to former URA planner Pong Yuen-yee, the open space was originally to belocated in front of the shopping mall on Argyle Street (see map on page 56). The then-LDChad even succeeded in convincing the developer to give up this piece of prime real estate.However, the Urban Services Department under the former Urban Council vetoed this ideabecause they wanted a quiet playground to serve the area’s residents, not a busy public squarein a noisy commercial location. 170The space was moved southwards to Shantung Street, but had to be split between podiumlevel and the ground floor because the requirement for a minibus terminus left insufficientroom for both the open space and a drop-off point for the hotel at ground level. Since thesite is also narrow and surrounded by roads, planners also felt it was safer to separate thechildren’s play area from traffic.Its accessibility problems are mitigated by the fact that part of the garden is visible at groundlevel, and the podium is accessible from the cooked food market on the first floor (part ofthe GIC facilities). These two factors enable the space to attract some users. Meanwhile, theheavy use of the small sculpture and seating area in front of the shopping mall at ArgyleStreets suggests that had a public square been provided there, it would have been highlysuccessful.

The MertonTotal size (sites A and B together): 2,300 m 2Access hours:24 hoursManagement:LCSDThe Merton’s open space was divided between two sites (see map on page 67). Site A offerspassive sitting-out space, while Site B offers a children’s play area and a foot massage pathfor the elderly.81Opposite from top left: The entire building is oriented away from the waterfront; Site A failsto take advantage of its seafront location, the concrete barrier/shade on the North side ofthe open space presumbably shields people from the traffic on Kennedy New Town Prayaand from the wind, but blocks the view of the sea; people gathering on the other side of theconcrete barrier, where they can enjoy the sunset.This page: The landscaping and design is fairly typical of small LCSD open spaces. FormerURA planner Pong Yuen-yee says that the landscape architect intended to create a marinethemedgarden, but the LCSD wanted a simple, easily-maintained space.

J-ResidenceLocation:Access hours:Management:3rd floor rooftop. Accessible from elevator on Tai Wong RoadEast.11a.m.- 11p.mPrivate82This rooftop garden area on top of the preserved Woo Cheong Pawn Shop House clusteris an unofficial public open space. It is not marked on the Master Layout Plans or on theland lease, and does not appear on the Lands Department’s list of privately-managed publicspaces. It was made accessible to the public through an agreement between the URA andthe government. 171The ambiguous status of this space has led to some conflicts since it has opened — restaurantstaff have complained about littering, while members of the public have sometimes foundthemselves barred from entrance when the restaurant uses it for private functions. In aneffort to mediate these conflicts, the URA has hired a security guard to ensure access to theroof, give brochures to visitors, and monitor public behavior.

General ObservationsLandscapingGenerally speaking, the landscaping of privately-managedsemi-commercialized public open spaces was of a higherquality than that used in spaces intended mainly forresidential users. This is because the amenity value providedby open spaces in a commercial setting brings financialbenefits to the shopping centre operator by attracting andkeeping shoppers. This makes them more willing to payfor good quality landscaping including high-maintenancefeatures such as wooden paving and water fountains. Spacesintended for residential users do not bring commensuratecommercial benefits. These were usually turned over to theLCSD or in a few cases to the URA itself to manage. Asa result, they were more likely to use standardized designsand materials geared more towards ease of maintenancethan to providing a pleasant environment.AccessibilityThe provision of public open space within privatedevelopments resulted in some accessibility problems. TheHong Kong Planning Standards and Guidelines on openspace encourage the provision of public (and private) openspaces by the private sector, which are often provided atpodium level or in places requiring one to pass throughprivate property in order to reach them. This necessarilyintroduces time access restrictions due to security issues.Open spaces in such locations at the sites visited didnot permit 24-hour access, whether they were managedprivately or by the government.Providing open spaces at podium level also results inpractical accessibility problems. Even if those areas arephysically accessible by stairs, escalators, or elevators, thepeople do not necessarily know about them, may not beable to find them, and have little occasion to use themin the course of their daily routines. The Langham Placepodium garden manages to capture some users from thecooked food market and community centre, but the Pawnand the upper levels of the Vision City open space werepractically empty.The Dilemmas ofSemi-Public SpacesThe Hong Kong Planning Standards and Guidelines onrecreation, open space and greening have encouraged theprivate provision of open spaces, both public and private,since the mid-1990s. At the time, this was thought to bea good way of providing more open spaces without greatgovernment expense due to Hong Kong’s severe spaceshortages and high land costs. This model was embraced bythe URA, but was also encouraged in many purely privatesector developments.However, semi-public spaces can be problematic becausethe public’s interest in having maximum freedom to usethe space conflicts with the private manager’s interest incontrolling the space and minimizing maintenance costs.Some spaces are able to mediate these conflicts better thanothers.For a semi-public space to function successfully, thesefactors need to be present:1. The semi-public space is visible and convenientlyaccessible from other public spaces (i.e. the street).The general public should not have to pass throughmuch private property in order to reach it. Otherwise,only those who have a reason to be in the privatespace will have occasion to use the public space. Onlyshoppers will use a shopping mall’s podium garden;other passers-by will not traverse a shopping mall justto reach it.2.3.Heavy use by the general public aligns with privateinterests. A shopping centre courtyard fits thedescription, because shopping centres profit fromattracting many people. The rooftop garden of arestaurant does not, nor does a pedestrian concourselocated in the middle of a residential development. Inparticular, a semi-public space should not be located ina place where the public will compromise the securityor privacy of the building’s private users.There must be a clear and equitable agreementdelineating rights and responsibilities of both themanagement and the public in the space. It mustdescribe the public’s rights of access, and the extentto which the management is allowed to benefitcommercially from the space (if at all). The agreementmust then be enforced.Public spaces that do not fulfil the first condition arelikely to be underutilized, while those that do not fulfilthe second are prone to mismanagement as the managershave an incentive to keep the public out. Spaces that failthe third condition are likely to have conflicts over who isallowed to do what in them. For example, the managementmay attempt to inappropriately rent the space out forcommercial purposes when the developer has already beengranted GFA concessions to provide the space for publicbenefit.Recent controversies over semi-public space have resultedfrom one or more of these problems. These events havepersuaded the TPB to rethink its position on privatelyprovisionedpublic open space, particularly in residentialdevelopments. In 2008, the TPB announced that theDevelopment Bureau should no longer ask it to acceptpublic open spaces in private developments as ‘planninggain’, 172 especially not in residential developments. It saidthat it would “from now on carefully consider the location,design and implementation prospects of public facilitiesproposed under any future planning applications beforedeciding whether such provision would be accepted as aplanning gain.” 17383

Environmental ImpactGreen Buildings84Improving urban environmental conditions was one ofthe aims of the URA. The Urban Renewal Strategy statesamong its goals:5b) designing more effective and environmentallyfriendlylocal transport and road networks5d) redeveloping dilapidated buildings into newbuildings of modern standard and environmentallyfriendlydesign5e) promoting sustainable development in the urbanarea;The URS also states that “Urban renewal is not a ‘slashand burn’ process. A comprehensive and holistic approachshould be adopted to rejuvenate older urban areas by way ofredevelopment, rehabilitation and heritage preservation”.Similar statements can also be found on its website and inits annual reports. However, the URA did not have a formalenvironmental policy until May 2009, when it announcedthe adoption of a six-point plan for green buildings.The URA has taken steps towards greener construction,which involves improving energy efficiency, conservingwater, utilizing environmentally-friendly building materials,planting more greenery, reducing construction waste, andencouraging domestic recycling.Two of its building projects, Mount Davis 33 in KennedyTown and Vision City in Tsuen Wan, have achievedplatinum-level certification under HK BEAM (HongKong Building Environment Assessment Method), anenvironmental certification programme managed by theBusiness Environment Council.The URA formalized its environmental construction policyin 2009, when it issued a list of six environmental measuresfor future projects to adopt, starting with the Lee TungStreet redevelopment. The six features are:1.2.3.4.Energy efficiency: sun-shading provisions, energyefficiency of electrical, lighting, lift and escalatorinstallations, water-cooled chiller system, heat recoverysystem etc.Water conservation: dual flushing/low volume cistern,condensate collection system and rain-water collectionsystem for irrigation or flushing etc.Environmentally-friendly building materials: materialsnon-damaging to ozone, recycled plastic bottles andrubber tyres for children’s playground flooring, recycledplastic and wood wastes for flooring of landscapedareas etc.Greening: landscaped open space, roof garden, verticalgreening, street planting etc.However, these environmental goals were too narrowlyconceived and conflict with the URA’s financial imperativeto maximize site densities. The following section is notintended as a technical evaluation of the environmentalimpact of each URA project, but rather a general discussionof the URA’s environmental policies and principles, anda photographic examination of the results that it hasproduced.5.6.Facilities for collection of recyclable waste: e.g.domestic waste.Reduction of construction waste and environmentalnuisance: waste management plan, introduction ofnoise mitigation measures etc.

The URA also announced that it had hired a consultantto look into green technologies such as high thermalperformance structural fabric, renewable energy lightingsystems, solar hot water systems, power-saving lighting,energy-saving air-conditioning devices, and grey waterrecycling for toilet flushing, cleansing and irrigation. URAofficials estimate such measures will only add 2% to 3% toconstruction costs. 174While these measures are a major step forward, theyconceive of green building in a narrow sense. They focuson individual buildings in isolation rather than as part ofwhole neighbourhoods. While they may reduce the carbonfootprints and water consumption of individual buildings,they place little emphasis on a building’s impact onmicroclimates, ventilation, daylight, and traffic networks,which are some of the most important environmental issuesfor the community today. 175 The next step for the URAshould be to consider sustainability on a neighbourhoodscale, especially in target areas undergoing widespreadredevelopment, such as Sham Shui Po and Wan Chai.Additionally, the URA’s environmental policy measuresappear relevant to new builds only; there is no mentionof incorporating environmental retrofitting into itsrehabilitation or preservation programmes, which remainfocused on basic repairs. Retrofitting carries potentialenvironmental benefits in terms of minimizing constructionwaste and conserving resources by extending the lifecycleof existing structures. However, the URA’s environmentpolicy is aimed at improving the green performance ofnew buildings after the decision has already been madeto demolish and rebuild; there appears to be no priorenvironmental cost-benefit analysis of redevelopmentversus retrofit. A project will therefore be consideredenvironmentally-friendly if it performs better than asimilarly sized new private sector development. Whether itis an improvement over what existed beforehand does notnecessarily enter into the equation.85

Left: Dilapidated buildings and piles of rubbish, most likely from nearby scrap dealing businesses, next to 8 Waterloo Road (right)Environmental Hygieneand SafetyOne of the LDC/URA’s goals was to tackle the problemof substandard environmental hygiene in old urban areas.Outdated plumbing, crumbling concrete, overcrowding,substandard fire exits and illegal rooftop structures posedhazards to residents’ health and safety.Redevelopment was supposed to physically eliminate theseproblems by replacing dilapidated buildings with clean,safe, modern structures. The question is whether such adisruptive solution is the most sustainable or cost-effectivecourse of action. The most obvious limitation is thatredeveloping one block does not directly affect the blocknext door. The URA hopes that the insertion of a moderndevelopment into an old neighbourhood will place upwardpressure on surrounding property prices, promotinggentrification and inducing property owners or investors toupgrade nearby buildings, and driving out undesirable landuses. For example, a handful of trendy cafés and bars havecropped up across the street from The Merton in KennedyTown, which was completed in 2007/08. However,this is not guaranteed to happen. For example, on-streetenvironmental hygiene problems, heavily dilapidatedbuildings, and undesirable land uses such as scrap dealersand coffin sellers can still be seen adjacent to the new 8Waterloo residential development in Yau Ma Tei, whichwas completed at around the same time.Environmental hygiene and safety problems are the physicalmanifestation of human mismanagement. Poverty, neglect,ignorance, lack of organization, inadequate enforcementof regulations, and perverse economic incentives lead tounsafe and unsanitary buildings. Redevelopment merelytackles the physical problem without addressing the humanor institutional problems underneath.87

Box 6The Counterproductive Pursuitof EfficiencyOne major example of seeking efficiency at the expense of vibrancy was at The Zenith, wherethe URA’s redevelopment brought more traffic to the surrounding narrow streets. In the 1990s,before construction began, the Transport Department and the LDC intended to relocate theentire outdoor market on Tai Yuen Street and Cross Street to the new indoor wet market tobe provided in the podium of The Zenith. This would open those streets up to traffic in orderto accommodate the increased number of vehicles brought by the redevelopment. Replacingtwo popular pedestrianized streets with vehicular corridors would have been the antithesis ofenvironmentally-friendly transportation.88Objections by district councillors and stall holders from 2005 onwards persuaded thegovernment to scale down, and then abandon the relocation plans altogether. Districtcouncillors and community activists wanted to maintain the character of the existing market,which is over 70 years old, while hawkers feared the loss of business and much higher rentsonce relocated indoors. The URA and Development Bureau are now planning to beautify theoutdoor market and provide electrical outlets for stalls as part of a district heritage scheme.Sources: LegCo Panel on Home Affairs — Subcommittee on Heritage Preservation; TownPlanning Board 178Tai Yuen StreetCross StreetJohnston RoadStone Nullah LaneN1990s. Completerelocation ofmarket proposed.2006. Partialrelocationproposed.2007. Wholemarket preserved.Restricted accessto Tai Yuen St.Zenith loadingbay to be used asturning circle.Tai Wo StreetCross StreetZenithSite AZenithSite BZenithSite BWanchai RoadIndoor MarketZenithSite CQueen’s Road East

TrafficOne of the goals of the URA laid out in the Urban RenewalStrategy is “designing more effective and environmentallyfriendlylocal transport and road networks”. In practice, thismeans that large sites are re-planned to increase efficiencyand reduce circulating traffic around the site boundaries.Traffic engineers have traditionally favoured comprehensivedevelopments because they can more efficientlyaccommodate traffic using the following measures, whileusing up less floor area:1.2.3.4.Reducing the number of entrances and exits on street.Fewer entrances leading to internal service lanes,drop-off points, taxi ranks, bus stops, and loading baysreduce the need to stop on-street.Eliminating cross streets. In addition to providing extradevelopable GFA, cross streets are removed becausefrequent intersections disrupt the flow of traffic.Providing off-street parking so that cars do not have topark at the kerb, narrowing roads and reducing trafficflow.Widening roads. Where possible, building setbacks areprovided in order to widen existing roads.Yet the benefits are not clear-cut. Reducing circulatingtraffic may encourage rat-running, i.e. speeding throughminor roads to avoid more congested arterial roads. Newlydecongested roads may also attract more traffic and fillup again. The provision of off-street parking can also becounter-productive, because it encourages car ownershipand driving. 176Additionally, because URA redevelopments substantiallyincrease density, they may bring more traffic to theneighbourhood. The relationship between density andtraffic congestion is not straightforward — it dependson many local factors like the shape of the site, whetherthe front entrance is near a key junction, the layout andcapacity of the surrounding streets, and whether the site iswell-served by public transportation. Nonetheless there is arisk that the additional pressure on arterial routes may wipeout efficiencies gained from reducing circulating trafficcongestion around the site boundaries.While major URA developments are required to submittraffic impact assessments to the TPB, these assessmentsare not necessarily reliable because it is in the interest ofthe applicant to use assumptions and figures that portraythe project in a favourable light. 177 While the TPB andTransport Department may reject the assessment if thefigures seem too unrealistic, this is not a substitute for anunbiased assessment.From an urban design point of view, these trafficimprovements often result in pedestrian-unfriendlyenvironments. Reducing entrances, eliminating crossstreets, and prioritizing vehicular movement reducespedestrian permeability, reduces active frontages, andremoves vibrancy. Multi-storey car parks and large busterminuses can also be eyesores.There are alternative ways of dealing with traffic in districtswith narrow streets and small blocks, which are friendlierto pedestrians and the environment. They include trafficcalming, traffic restraint, and pedestrianization. Instead oftrying to increase the flow of traffic, the goal is to prioritizepedestrians. Pavement widening, carriageway narrowing,reducing parking facilities, tree planting, kerbless crossingsand vehicle restrictions aim to physically and psychologicallyslow cars down and discourage vehicle use.This sort of traffic management is relatively new to HongKong, having been first trialled by the Transport Departmentin the early 2000s in selected districts. The URA has onlyvery recently started to incorporate some of these ideasinto its projects in a piecemeal way. It has reduced parkingfacilities at the Graham Street/Peel Street project, and hasincorporated limited pedestrian schemes into traditionalCDAs such as the Hanoi Road K11 project. Lee TungStreet will be pedestrianized after redevelopment, but onlyif the adjacent Amoy Street is opened up to through traffic.The URA announced its biggest traffic calming scheme sofar in late 2009: a revitalization project for Mong Kok’sspecialized shopping streets 179 as part of the PlanningDepartment’s “Area Improvement Plan for Shopping Areasin Mongkok”. 18089

Opposite, clockwise from top right: Wan Chai Road, between Sites A and B of The Zenith. Thereare long, unbroken podiums on either side of the road; looking up between the towers of TheZenith; The Dynasty is located along the Tsuen Wan waterfront, near the Nina Tower. Its twobroad, tightly spaced towers have been accused of creating a “wall effect”. 183VentilationThe effect of large buildings on air ventilation has become a major environmental issuein Hong Kong. Good ventilation is needed to alleviate roadside air pollution, and newdevelopments have been criticized for exacerbating the street canyon effect or blockingcoastal breezes.In 2006, the Planning Department announced guidelines for conducting air ventilationassessments for new developments. However, they are mandatory only for governmentbuilding projects, but not the private sector. The URA agreed to adopt ventilation assessmentsfor future projects, but projects planned prior to 2006 were not assessed. 182Box 7Basics of VentilationAll of the projects photographed in this report were completed or under construction beforeventilation assessments were implemented. Those that are on large or long sites have thebulkiest podiums, and some have tightly spaced towers.While the URA has made more efforts in recent years to address ventilation concerns, theextent of the improvements that can be made is restricted by financial concerns. For example,during the planning of the Kwun Tong Town Centre project in 2009, it was decided thatthe project must have a minimum GFA of 401,250m 2 in order to be financially viable. 184 Itwill feature an office tower of at least 220-280m, a very large podium and a pedestrian deckwhich will have adverse effects at street level. The URA had the flexibility to arrange thecomponents to marginally reduce the ventilation impact, but was not willing to significantlyreduce development intensity. 185 Source: Carmona et al. p.187 1811.2.3.Tall buildings do not necessarily create poor ventilation. Widthmatters more than height. Wide buildings oriented perpendicularlyto prevailing winds block ventilation the most.The street canyon effect occurs when there is an unbroken rowof bulky buildings of similar heights on either side of a street. Thisimpedes circulation and traps pollutants at street level.Varied building heights and gaps between buildings facilitate airflow and help disperse pollutants.91

92Graham Street market is due to be redeveloped. While the URA plans to recreate an “old shopping street” and has agreed to allow some stallholders to return, it is uncertain whether the marketwill be viable after redevelopment.

Social ImpactSocially sustainable development fulfils people’s social and cultural needs in addition to their economic and environmental ones. The concept of social sustainability is applied to urban designthrough the goal of creating urban environments that enhance a society’s social capital, which is defined as the value brought to society by social networks. Such environments meet people’scultural aspirations, foster a sense of community, and provide inclusive and accessible places which encourage, rather than repel social interaction.The following section will look at the social aspects of urban design produced by the URA. It is not an analysis of the URA’s public consultation processes, its compensation and rehousingpolicies, or its social impact mitigation policies. While these are important and worthy topics, the focus and methodology of this project is limited to the built environment.The Loss of Character StreetsIn Hong Kong, it is said that land uses and patterns of street activity define places morethan the architecture. 186 Character streets full of small businesses selling specialized goodsand services are a distinctive feature of Hong Kong’s urban ecology. Yet a surprising numberof them have been targeted by the LDC and URA for redevelopment. These include WingOn Street in Central (“Cloth Alley”); Hong Lok Street (“Bird Street”), part of ShanghaiStreet (“Bridal Gown Street”) and Fa Yuen Street (“Sneaker Street”) in Mong Kok; and LeeTung Street (“Wedding Card Street”) in Wan Chai. The Graham Street market in Centralwill be severely disrupted. This can be explained because the URA needs to select sites witha large redevelopment potential, meaning that it usually targets areas of thriving but lowrentcommerce rather than economically depressed areas with little commercial activity(i.e. obsolete industrial areas). It is exactly the former sort of site that is home to HongKong’s character streets because they offer a combination of relatively low rents and highaccessibility.While there have been efforts to relocate or recreate some of these shopping experiences,these attempts are usually less vibrant than what existed originally. Cloth merchants whowere relocated to Western Market (a refurbished historical wet market) reported a significantdecline in business. 187While shop owners and commercial tenants are compensated by the URA, 188 they often facedifficulties re-establishing their businesses elsewhere. Firstly, there are practical and financialdifficulties in finding suitable shop spaces at comparable rents because re-developmentdecreases the supply of affordable shop spaces. Secondly, redevelopment disrupts theirbusiness model. Character streets depend on the agglomeration of similar businesses in onelocation, which enables them to collectively attract a wider customer base. Dispersing themdestroys this effect.While there have been cases where the URA won praise for displacing socially undesirablelocal economies (i.e. the red light district on Portland Street), the disappearance of characterstreets is widely perceived as a net loss for the city. A purely economic viewpoint would holdthat failing to maximize the development potential of any given site is inefficient, but thisfails to take into account the social and cultural benefits that are produced by these streets.Despite their poor physical condition, Hong Kong’s older buildings perform functions thatcontribute towards the city’s sustainability. They provide a stock of housing for low-incomeearners in urban areas close to jobs and services. Relocating low-income tenants to publichousing estates in the New Territories reinforces the city’s spatial inequalities and imposeslong commutes on people who are less able to afford them.Older buildings also provide flexible and affordable incubation space for small businesses,which if successful, might invest in repairing the buildings themselves. Street markets offervery low barriers to entry for tiny businesses, enabling people who might otherwise rely onsocial assistance to make a living.Some urban theorists argue that a mixture of buildings of different ages is necessary to fostervibrant and diverse local economies. 189 Vibrancy reinforces a city’s cultural capital, whichmight turn into an economic asset by enhancing a city’s international image and attractingvisitors. In recent years, LegCo has passed motions calling for the preservation of local colourand character: in 2005, it asked for a review of the government’s policy towards dai pai donglicense holders, 190 and in 2007 it called on the government to promote street markets andbazaars to “to enhance the attractiveness of tourism in Hong Kong, as well as to furtherrevitalize on-street economy”. 19193

94The dismantling of ‘Sneaker Street’. The block on the East side of Fa Yuen Street (right) has been bought out by the URA as of December 2009. The block on the West side (left) continues to dobusiness as usual.

Left: Western Market has become primarily a tourist attraction with few customers onweekdays. This photograph was taken on a Monday afternoon in June 2009.Inclusion or Exclusivity?An important matter in the social sustainability of urban environments is whether theyare inclusive or exclusive. Socially sustainable environments can be used by everyone andencourage interaction between people of different social backgrounds. They do not keeppeople out with physical barriers, social controls, or pricing. It is argued that inclusiveenvironments are necessary for the social and political health of societies; spatial fragmentationexacerbates the effects of social inequality. While it is too simplistic to say that good urbandesign results in social integration, urban design should at least facilitate social interactionrather than separation.96While the URA has successfully created new public open spaces and community facilitiesthat are open to all, in other ways it has created environments that divide people. This is notnecessarily the fault of the URA; in most cases it is simply following established planningregulations and guidelines and doing the same things that the private sector does.

Right: Planted podium at 8 Waterloo Road. Podium gardens do not even provide the publicbenefit of offering visual relief at ground level.Private open spacesIt is an often overlooked fact that in addition to the public open space that the URA creates, italso provides a significant amount of private open space in podium gardens, swimming pools,and gyms for exclusive use by the residents. Hong Kong’s building codes make the provisionof private recreational facilities non-GFA accountable as part of a raft of environmentalincentives implemented in 2001, and are taken advantage of by private developers andthe URA alike. A problem arises because the government counts private podium gardenstowards its per capita requirement for open space under the Hong Kong Planning Standardsand Guidelines. 192 The rationale was that if the private sector could be encouraged to provideopen space, this would ease the government’s burden of doing so. Unfortunately, the policyignores the problem of social equity.While it is reasonable to assume that a large private development should provide open spacefor its own residents, the URA serves a broader public purpose, one of which is to providebadly-needed open space in intensely built-up and often lower-income districts. If the privateopen space it creates is also counted towards the government’s planning requirements, itmeans that the original residents of a district have not gained as much accessible open spaceas government figures say they have.97It is difficult to quantify exactly how much of the open space provided by the URA is privateas opposed to public as not all of the Master Layout Plans specify the precise amount ofprivate open space. However it is possible to provide some examples: The Merton created2,300m 2 of public open space and 1,500m 2 of private open space and recreational facilities.A few URA developments only provide private open space, such as The Zenith, whichincluded GIC facilities and at least 3,866m 2 of podium-level private open space, but nopublic open space.

98This spread from left: This anonymous doorway is the entrance to the nursery on the thirdfloor of The Zenith; the major exception is the Wan Chai Market, also at The Zenith, whichwas given a prominent entrance because the new market was intended to replace the oldstreamline modern Wan Chai Market as well as the Tai Yuen Street/Cross Street bazaar, bothfocal points of the neighbourhood; the entrance to the community facilities inside the LanghamHotel podium is an escalator under a footbridge on low foot traffic Shanghai Street.

Community FacilitiesSegregated by DesignSeveral of the URA projects photographed included GIC facilities such as offices for charities,community halls, and centres for the elderly, disabled, or young children. The governmentrequires the URA and the developer to build the community facilities and in exchange,they may be disregarded in GFA calculations. The facilities are usually located inside thepodiums of the developments, one interesting consequence being that community facilitiesare hidden from casual observers since they lack distinctive architectural markers indicatingtheir presence.Since GIC facilities provide no commercial benefit, they are often located in peripheralparts of the development with less foot traffic and separate entrances from the commercialfacilities. For example, the hostel for the disabled and the elderly day centre at Vision Citywas not accessible from inside the shopping centre but instead located on Yeung Uk Road, abusy road with mainly inactive frontages.99

Top: A naturally gentrified street in SoHo (Staunton Street), small everyday shops like the oneon the right are being gradually displaced by trendy new boutiques and restaurants.Bottom: hoarding of the URA/Nan Fung H17 project in Wan Chai, advertising the developmentas stylish and exclusiveGentrificationGentrification is a market-driven process whereby a neighbourhood becomes popular andattracts wealthier residents who upgrade the buildings, drive up property prices, and displacethe original inhabitants. The debate over gentrification is contentious; some argue thatgentrification should be avoided because it reduces social capital by displacing people, whileothers argue that gentrification is the natural process by which cities regenerate themselves.100The URA has sporadically entered the gentrification debate in an inconsistent, self-justifyingmanner. On the one hand, it praised the gentrification of Mong Kok West catalyzed byits Langham Place development. It described upward pressure on surrounding propertyprices as a positive process of economic revitalization. 193 On the other hand, it portrayed thesame naturally occurring process in Central as a threat to Graham Street Market, therebypositioning its comprehensive redevelopment of the area as a solution to protect the marketfrom displacement. 194On the whole, its policy has consistently been one of replacing lower-value land uses withhigher-value ones, which has drawn criticism from social workers, community activists, andheritage activists. Large-scale government backed gentrification is more disruptive than themarket-driven kind because it occurs all at once rather than gradually, and in large blocksrather than in small pieces. It raises questions of equity if the original residents of a districtcannot afford the new flats or shops.Gradual gentrification is actually quite rare in Hong Kong due to the high land price policydiscussed in Part II, and is limited to prime locations such as SoHo (South of HollywoodRoad) in Central, Causeway Bay, and parts of Mong Kok.

Bottom: The J-Residence development was a successful example of physical preservationand adaptive reuse of old shop-houses, but became controversial because it replaced thehistoric Woo Cheong Pawn Shop with trendy restaurants and an art gallery.Right: The pawn shop has moved across the street into another older building.101

102Comprehensive redevelopment displaces small businesses on a much bigger scale.This spread: Mid-range chain stores at Vision City (Tsuen Wan) on the right side of Wo Tik street contrast with local grocery stores on the left.

103

104Luxury shopping at the K11 mall in Tsim Sha Tsui.

The Other Three “Rs”The URA’s other three R’s — rehabilitation, preservation, and revitalization — aresubsidized out of redevelopment profits. They are therefore a much smaller part of the URA’soverall budget, and less of a priority. They were added on to the URA bill after the overallstructure of the URA had already been decided, and the bill actually makes no referenceto the mechanisms to be used to achieve them. Here we will take a brief look at the URA’sprogrammes in these areas.105

106A building rehabilitated by the URA. Source: Urban Renewal Authority. 195

RehabilitationRehabilitation is an important aspect of urban renewal. It can extend the lifetime ofexisting buildings, reduce the need for redevelopment, reduce the amount of constructionwaste going into landfills, raise property values, preserve the character of neighbourhoods,and enable residents to stay in their buildings if they wish.It has not been a high priority for the URA. Its rehabilitation programmes began in 2003,and by 2009, it reported that it had rehabilitated some 490 buildings at a cost of HK$240million in total. 196 This is a tiny fraction of the URA’s total expenditure. While the URA doesnot release financial information for individual projects, its annual reports give some basisfor comparison with the overall scale of its operations. In 2007-08, its revenues amountedto HK$5.3 billion, with direct costs of HK$2.3 billion dollars, which together with otheroperating expenses, left a surplus of about HK$2.1 billion. Its administrative expenses for2007-2008 alone were HK$238 million, a figure comparable to the total amount spent onrehabilitation since 2004. 197107Additionally, its rehabilitation programmes are limited in scope, focusing only on basicbuilding maintenance. The URA has yet to consider environmental retrofitting, such asenergy efficiency, water conservation, solar microgeneration, or green roofs.The URA’s rehabilitation programmes come in the form of small loans and grants. Theirvalue is generally capped at HK$100,000 to HK$150,000, and most loans are significantlysmaller. There are five programmes overall, including a building materials incentive scheme,an interest-free loan scheme for building repairs, small hardship grants of up to HK$10,000for households in financial difficulty, subsidies for third party liability insurance, and apreferential mortgage scheme run in cooperation with 17 banks. (The mortgage schemewas discussed in Part II.) The URA also offers technical and legal advice to participatinghouseholds.The reach of the URA’s programmes is limited by their eligibility requirements. Theschemes only operate inside its nine target areas and are open only to buildings with owners’corporations, which excludes the majority of private buildings in Hong Kong (see PartII). 198 The Buildings Department and the non-profit Housing Society also have their ownprogrammes, which are less constrained by eligibility requirements. 199 In February 2009,the Financial Secretary also announced a special one-off building rehabilitation programmecalled “Operation Building Bright” aimed at repairing 1,000 dilapidated buildings at the costof HK$1 billion (HK$150 million of which will come from the URA) over two years. Thisprogramme will be administered by the URA within its target areas and by the BuildingsDepartment elsewhere. 200

According to town planner Ian Brownlee, the vast majority of building rehabilitations are doneby the private sector without any assistance from the URA, such as this gentrified building inSoHo.PreservationThe challenge for the URA has been to find a way to carry out historical preservation withinthe constraints of a commercial business strategy. The URA Ordinance did not create anyspecific mechanisms for conducting preservation, and the URA is offered little support byHong Kong’s existing policies and legislation.108Hong Kong only gives legal protection to declared monuments (currently 84); its system oflisting other historical structures by the Antiquities and Monuments Office is non-statutoryand confers no legal protection. There are essentially no formalized systems of compensationor subsidies for the preservation of listed buildings (except for declared monuments), whichgives private owners no financial incentive to preserve them. 201 If the government wishes topreserve a building, it usually buys it. There are obvious disadvantages to this strategy becausethe government becomes responsible for maintaining and finding uses for it. Since February2008, the government has tried to recruit non-governmental organizations (NGOs) to takeon government-owned historical buildings. 202 Finally, Hong Kong’s preservation legislationfocuses only on individual buildings, and not on neighbourhoods or districts. Only veryrecently has the Development Bureau begun to consider district-wide preservation at anadministrative level for old parts of Wan Chai. 203It is within this context that the URA has been charged with preserving structures of historicaland cultural interest. This means that it has had to find ways to make historical preservationcommercially viable, or to subsidize it with profits from redevelopment. One strategy it haspursued is to bundle preservation with redevelopment projects, so that a few buildings areselected for preservation within a wider scheme of redevelopment. The URA has also takenon a few pure preservation projects, subsidized out of its surpluses.In both cases, the usual policy is for the URA to resume the properties from their existingowners. They are then restored and rented out to commercial tenants. A full list of the URA’scompleted and proposed heritage projects can be found in Appendix 2.

KENNEDY STREETA map of redevelopment and bundled heritage projects in Wan Chai. Far more area has been redeveloped than preserved.Heritage BundlingThe main preservation strategy used by the URA has been to bundle small scale preservationprojects with larger redevelopment projects. This has been used mainly in Wan Chai, butalso in Yau Ma Tei, Sheung Wan, and Nga Tsin Wai Village. Profits from the redevelopmentare used to subsidize the preservation, and new commercial or community uses are found forthe preserved buildings. While this approach succeeds in preserving individual buildings orsmall clusters of buildings, the scale of the adjacent redevelopment is such that the area nolonger retains its original character. Hong Kong has yet to devise preservation policies thatoperate on a neighbourhood-wide scale.18 Ship StreetSHIP STREETNJ-ResidenceTAI WONG STREETThe PawnSWATOW STREET186-190Queen’s Road EastSouthornPlaygroundJOHNSTON ROADAMOY STREETKeyRedevelopmentBundled preservationStand-alone preservationPartial preservationPublic open spaceLEE TUNG STREETSPRING GARDEN LANELee TungStreet ProjectMcGregorStreetProjectMCGREGOR STREETQUEEN’S ROAD EASTTAI YUEN STREETCROSS STREETLANETAI WO STREETThe ZenithSTONE NULLAHBlue House/King Sing HouseWan Chai Market

110

Opposite: J-Residence, Johnston Road, Wan Chai. This was the URA’s first major heritageproject. Shop-house clusters dating from the 1880s to 1930 were preserved at 60-66Johnston Road (left), and 18 Ship Street (right). 204 They are positioned directly adjacent toa new 46-storey residential tower. The podium’s detailed frontage helps integrate it with theold buildings at street level, but the overall effect is still somewhat jarring. The URA madeconsiderable effort to find culturally relevant tenants for the preserved buildings, including abar, a fusion cuisine restaurant, and a restaurant/gallery. 205This page: 8 Waterloo Road. The two-storey water pumping station at 8 Waterloo Road wasoriginally slated for demolition but saved after a last-minute appeal by preservationists. Thenew development was built around it. Although the TPB required visual mitigation in thepodium near the red brick building, the brick building is still overwhelmed and overshadowedby the new development. It also remained unused for five years after construction wascompleted in 2004.111

112Wan Chai Market. Built in 1937, the Wan Chai Market is one of the few remaining “Streamline Moderne” buildings in Hong Kong. 206 In 1990, it was rated as a Grade III historical building by theAntiquities and Monuments Office, but was deemed not worth preserving when The Zenith redevelopment project was first approved in 1995. By the time public opinion swung in favour of retainingit, the URA had already signed contractual agreements with the joint venture developer. In 2008, a compromise was negotiated whereby only the façade would be retained, and a 46-storeyresidential tower built on top. By June 2009, the rear of the market had been demolished to make way for the new podium.

113

114

Left: The Blue House on Stone Nullah Lane in Wan Chai. The current building cluster dates from the 1920s, but the site has variously been used as a Chinese hospital, a temple to the God ofMedicine “Wah To”, a martial arts school, and an osteopathy clinic (still existing).Stand-alone preservation projectsSo far, the URA has completed just one stand-alone preservation project — Western Market,an Edwardian market building in Sheung Wan. The LDC acquired it and converted it intoa tourist attraction in 1991, and it was further refurbished by the URA in 2003. The URAthen tendered out its management to a private company in return for a share of the profits, 207an arrangement which guarantees the URA a minimum financial return.The URA attempted to apply the same method to four new preservation projects, all of theminvolving tenement buildings and shop-houses. However, acquiring a disused governmentbuilding has very different political and social implications from acquiring privately-ownedbuildings with existing users. Civil society groups reacted negatively to the idea of preservingbuildings at the expense of people working and living in them.115The original plan for the Blue House involved relocating the residents and converting itinto museums and a café, but after community groups and district councillors objected,the URA revised its plans to allow residents to rent back their old flats under a partnershiparrangement with the Housing Association. 208 The announcement of preservation projectson Prince Edward Road West and Argyle Street attracted similar complaints because theplans would involve displacing some of the existing businesses, such as hardware and homeappliance shops, arts and crafts schools, dance studios, and film production houses. Of theHK$1.33 billion the URA has allocated for the two projects, just HK$100 million will bespent on the actual restoration. The rest will be used for acquisition and compensation. 209It is ironic that the URA’s attempts to meet community aspirations for more heritagepreservation were met with such controversy. The underlying problem is that Hong Konglacks the legislative and policy mechanisms to implement other approaches to preservationsuch as down-zoning, enforceable listing, subsidies, or development rights transfers. TheURA was set up as a land assembly machine, whose main policy tool was resumption. It isnot the right tool for delicate preservation projects where the goal is to preserve communitiesas well as buildings.

116

Left: Sheung Wan Fong, located a block south of Western Market, was created by realigning part of a road around a traffic island. It has become a gathering place for the neighbourhood’s elderly residents.RevitalizationRevitalization is the least clearly defined aspect of the URA’s 4Rs strategy. The URA’s websitestates that “revitalization is the deployment of appropriate means of renewal to revive andstrengthen the economic and environmental fabric of different districts”, which is a broadenough description that it could conceivably cover all four Rs. However, in practice, itsrevitalization projects have had far narrower goals.The URA’s list of revitalization projects (only five to date) include three street beautificationprojects and two heritage preservation projects (the Blue House, and the Mallory Streetproject) which are also on its list of preservation projects.Since heritage preservation has already been discussed above, this section will focus mainlyon the beautification projects. These projects take place within the URA’s nine target areasand are modest in scope, which mostly involves improving the physical appearance of placesby installing new street furniture, repaving, repainting, and planting.117The biggest revitalization project so far conducted was the beautification of the areasurrounding Western Market in conjunction with the market’s own refurbishment. Itinvolved the improvement of street furniture, tree planting, renovating a footbridge, andconverting a nearby traffic island into a small public piazza named “Sheung Wan Fong”.Other, smaller-scale beautification projects have been implemented in Tai Kok Tsui and inSheung Wan, including repaving, pavement widening, and the installation of street furnituresuch as better lighting, greenery and railings. While these small scale projects improvethe quality of the public realm in targeted areas, they do not have a major effect on localeconomies or environmental quality as they cannot make changes to land uses, permeabilityand accessibility.

118Conclusion

It is increasingly clear that the URA’s current model is unsustainable in the long run. Whatwill the URA do in the future, when all the commercially lucrative low-rise blocks havealready been redeveloped? What kinds of densities will be necessary to make commerciallyviable the redevelopment of enormous housing estates like Mei Foo Sun Chuen in thirtyyears’ time? The URA is currently in the middle of a two-year Urban Renewal StrategyReview, a public engagement exercise intended to scope out its future role and direction. Theconsultation drew out people who were dissatisfied with the URA for a bewildering array ofcontradictory reasons. 210 Low-income residents wanted redevelopment to be sped up; middleclassowners of refurbished buildings and environmentalists wanted more rehabilitation andpreservation. Residents in dilapidated properties wished to move away; small business ownerswished to stay. Community activists felt that existing public participation mechanisms wereinadequate, others feared that more consultation would cause further delays. Many ownersfelt that they were being insufficiently compensated and resented compulsory resumption;experts argued that the URA’s compensation policies were too generous.Simply trying to triangulate these differing opinions misses the bigger picture. The politicsof urban renewal are shaped by the underlying institutional context, which puts propertyowners in a situation where their best option is to wait for government redevelopment, whilesimultaneously producing insensitive developments that provoke opposition and slow downthe proceedings. It leaves no-one satisfied.So what is to be done?The first task is to ask ourselves, as a society, whether we should consider urban renewal apublic good like education, health care, and clean water. 211 If so, then we must be preparedto subsidize it. Under the current system the URA is asked to provide all manner of publicbenefits while being required to measure its success in purely economic terms. The socialand environmental effects must be included in the cost-benefit equation. To accomplishthis, the URA Ordinance must be amended so that it is no longer required to be broadlyself-financing. This would enable it to pursue more sensitive design considerations such asbreaking up projects into smaller plots, creating more open space, and developing to a lowerdensity. Since the government derives so much of its income from maintaining high landpremiums, subsidizing urban renewal would recycle the funds back into the community. 212Conversely, if we decide that urban renewal should mainly be the responsibility of theprivate sector, then we need to free up the market. In fact, freeing up the market would stillbe wise even if the public sector were to subsidize urban renewal. There are limits to theresources that the government can commit, and it is unrealistic to expect one governmentagency to redevelop all of Hong Kong’s old districts faster than they can age. Unlike in othercities, where urban dilapidation is usually a localized consequence of disruptive economicrestructuring, in Hong Kong it is a self-perpetuating phenomenon caused by entrenchedmarket distortions.Policy-makers must be aware that urban dilapidation is one of the side effects of HongKong’s heavy dependence on land revenues, and be prepared to tackle land premiumreform. By increasing the supply of land in play, land premium reform might produce theadditional benefit of reducing the impetus to maximize GFA to such an extreme degree.Land premiums could even be used to incentivize greener development by offering discountsfor lower-density buildings or adaptive reuse.Freeing up the market also means encouraging banks to provide more financing for olderproperties. While this will be difficult, there are various measures that could be taken tonudge lenders in the right direction. The URA could expand its preferential loan schemeto cover all refurbished buildings, not just those it has rehabilitated. The Hong KongMortgage Corporation, which already supports the mortgage market, could also be used tosupplement mortgages on privately rehabilitated properties. A certification scheme (floatedby some officials in the aftermath of February 2010’s building collapse in To Kwa Wan) canbe introduced to provide proof that buildings are structurally sound, allowing lenders toassess risk accurately. 213119

120

Another aspect of freeing up the market is to reduce the high transaction costs posed bymulti-ownership. While the introduction of an 80% threshold for compulsory sale hasrelieved developers of being held to ransom, a higher priority must be accorded to settingup governance structures to ensure buildings do not deteriorate merely due to lack oforganization. Owners’ corporations are important because they can legally facilitate decisionsranging from basic repairs to negotiating with developers.Urban renewal is a complex, multi-faceted problem. As the URA moves towards concludingits strategy review, we must be mindful that amending the Urban Renewal Strategy documentor the URA Ordinance in isolation will not solve all current problems. It must be dealt withholistically. While this report does not seek to provide specific policy prescriptions, it ishoped that it will guide the public, legislators, and policy-makers to ask the right questions.If the market were freed up, the URA could limit its direct interventions to the mostproblematic cases, and focus mainly on helping property owners redevelop on their own orin partnership with developers. 214 One example from the UK is community developmenttrusts, which are organizations set up by local property owners (often in collaborationwith local government) in order to regenerate neighbourhoods. Profits from commerciallyorientedparts of the redevelopment are used to subsidize low-cost housing and shop spacesfor the original residents on the same site. 215 The URA should be supporting alternativeredevelopment plans devised by local residents and business owners instead of trying tooutbid them.121Beyond the role of the URA, more must be done to extend the life and ensure the safetyof existing buildings, and to ensure that new buildings meet society’s environmental andsocial expectations. Buildings maintenance regulations must be stepped up, with significantpenalties for non-compliance, and subsidies for those who cannot afford repairs. As for newbuildings, many controversial features of URA redevelopment projects are merely the resultof it following standard regulations and practices. If the private sector is to undertake moreurban renewal in the future, and the community is serious about creating more peoplefriendly,historically sensitive and green urban environments, then policy-makers need tobegin the process of reviewing our town planning and building regulations as well as oururban design and heritage preservation policies.

Appendix 1Name of projectAddress/locationAreaOld GFAAffected buildingsAffected populationNew GFAResidential (no. offlats)Commercial (sq m)Public Open Space(sq m)GIC (sq m)Other uses (sq m)Project StatusNotesNew GFA / Old GFAMount Davis 33Ka Wai Man Road, Sai YingPun.728 n/a 0 0 7,280 89 0 0 0 0 Constructioncompleted 2006Greenfield linked site forNew Town Praya projectThe DynastyYeung Uk Road Project(Tsuen Wan Town CentreLinked Site?)7,230 n/a 0 0 43,854 256 17,373 0 0 0 Constructioncompleted 2009Greenfield linked sitefor Tsuen Wan TownCentre projectWaterloo Road/YunnanLane Project8 Waterloo Rd, Yaumatei 3,869 6,619 19 444 35,007 576 0 1,650 0 0 Constructioncompleted 20045.29Queen Street Queen’s St, Sheung Wan 7,694 25,792 50 648 66,217 1,148 400 1,200 5,254 0Constructioncomplete 2003, flatssold2.57122The MertonKennedy Town New PrayaProject6,075 24,808 15 1,683 62,904 11,82 0 2,300 0 0 Developmentcompleted 20052.54Langham PlaceArgyle/Shanghai St, MongKok11,976 40,810 58 2,603 167,419 160,870 1,100 6,548 0 Constructioncompleted 20044.10The Zenith Tai Yuen St, Wan Chai 6,782 12,555 31 975 62,310 904 3,411 6,330 0 Constructioncompleted 2006Vision City Tsuen Wan Town Centre 20,300 56,851 22 7,119 130,199 1,466 23,221 3,700 3,080 0 Constructioncompleted 2007Hanoi Road Project(K11)Tsim Sha Tsui. Hotel/Commercial8,299 27,309 20 220 102,626 345 31,209 1219 0 25,764J-Residence Johnston Road, Wan Chai 1,970 7,640 21 333 20,567 381 2,699 0 0 0Florient Rise Cherry Street, Tai Kok Tsui 4,510 14,416 33 1,020 4,323 522 4,916 0 1,849 0Vista Fuk Wing St, Sham Shui Po 1,384 5,129 8 246 12,453 173 2,075 255 0 0Occupation permitissued Jan 09Construction finished2007Construction finished2008Construction finishedNov 2008Profit-sharingarrangement withoriginal ownersPreserves 4 historicalshop-houses adjacent4.962.293.762.690.302.43Beacon LodgePo On Road/Shun Ning Rd,Sham Shui Po1,394 4,898 8 327 12,537 166 2,083 250 0 0Construction finished20082.56Mod595 Reclamation St, Mong Kok 535 2,411 4 122 4,921 85 802 0 0 0Construction finished20072.04First Street/Second Street ProjectSai Ying Pun 3,536 15,690 30 777 38,030 496 1,717 700 2,199 0Sales of flats inprogress2.42

Name of projectAddress/locationAreaOld GFAAffected buildingsAffected populationNew GFAResidential (no. offlats)Commercial (sq m)Public Open Space(sq m)GIC (sq m)Other uses (sq m)Project StatusNotesNew GFA / Old GFAQueen’s Road EastProjectWan Chai 378 1,806 5 25 3,985 96 445 0 0 0 Completed 2010 2.21Po On Rd/Wai Wai RdSham Shui Po 2,200 9,923 19300households24,124 330 3,654 0 2,200 0 InformationunavailableJoint URA/housingsociety project2.43I-HomeBedford Rd/Larch St. TaiKok Tsui1,229 6,313 7 290 10,370 187 1,154 0 0 0 Superstructureworks in progress1.64Baker Court Ma Tau Kok/Hung Hom 227 834 2 9 2,164 24 246 0 0 0Demolition inprogress2.59Lee Tung Street Wan Chai 8,220 36,534 52 1,611 79,697 1,313 9,637 3,000 2,112 0 Demolition complete3 Historical tenementhouses along Queen’sRoad East to bepreserved2.18Staunton Street/Wing Lee StSheung Wan 3,563 5,265 24 288 11,771 133 3,375 920 0 0 Under acquisitionDevelopment scaledback in early 2010 dueto impetus to preserveWing Lee St., Featuredin the film “Echoes ofthe Rainbow”,2.24123Shau Kei Wan Rd Shau Kei Wan 1,890 9,834 17 400 19,500 300 1,700 0 0 0 Under constructionJoint URA/housingsociety project.1.98Castle Peak Rd/Hing Wah StSham Shui Po 1,380 8,286 11 344 12,420 180 2,070 0 0 0Demolition inprogressJoint URA/housingsociety project1.50Castle Peak Rd/CheungWah StSham Shui Po 1,000 5,935 10 158 9,000 149 1,500 0 0 0Demolition inprogressJoint URA/housingsociety project.1.52Un Chau St/Hing WahSt/Castle Peak RdSham Shui Po 2,600 14,193 22 496 23,482 356 3,900 0 0 0Demolition inprogressJoint URA/housingsociety1.65Hing Wah Street/UnChau St/Fuk Wing StSham Shui Po 2,200 10,114 22 362 19,800 333 1,100 0 2,200 0Demolition inprogressJoint URA/housingsociety project1.96Larch St/Fir StreetTai Kok Tsui 2,195 10,332 12 594 19,753 368 3,292 0 Completed 2009 1.91Pine/Anchor St Tai Kok Tsui 2,328 11,802 12 520 20,952 304 3,492 450 0 Under construction 1.78Lai Chi Kok Rd/KweilinStSham Shui Po 3,345 13,197 17 540 30,106 384 4,023 580 0Demolition inprogress2.28Sai Wan Ho St Sai Wan Ho 710 3,796 2 21 5,970 88 630 0 0 0 Under acquisition 1.57

Name of projectAddress/locationAreaOld GFAAffected buildingsAffected populationNew GFAResidential (no. offlats)Commercial (sq m)Public Open Space(sq m)GIC (sq m)Other uses (sq m)Project StatusNotesNew GFA / Old GFAYu Lok Lane/Centre StreetFuk Tsuen/Pine StCentral/Western 2,516 4,140 14 270 17,320 270 245 1,100 0 0Tai Kok Tsui 536 4,071 3 272 4,824 71 804 0 0 0Clearance inprogressClearance inprogress4.181.18Hai Tan St/Kweilin StTai Kok Tsui 7,440 25,344 37 1,223 66,960 784 9,930 1,500 2,200 0 Under acquisition 2.64Macpherson Stadium Tai Kok Tsui 2,399 2,788 1 0 24,768 254 2,443 5,620 0 Demolition complete 8.88Kwun Tong Town Centre Kwun Tong 53,500 105,123 24 4,763 401,250 2,000 209,640 8,700 16,300 15,700 Under acquisition Megaproject 3.82Nga Tsin Wai Village Tsuen Wan Town Centre 4,637 2,051 46 154 37,097 580 2,319 1400 0 0Demolition inprogressHistorical village. 18.09Peel/Graham St Central/Western 5,320 20,219 38 823 68,620 293 46,260 1,000 0 0 Under acquisition Graham St Market 3.39124Chi Kiang St Ma Tau Kok/Hung Hom 928 3,772 5 270 8,352 116 1,392 0 0 0 Under acquisition 2.21Sai Yee Street Mong Kok 2,462 14,434 14 498 22,185 196 8,241 0 0 0 Under acquisition “Sneaker Street” 1.54Pak Tai Street Ma Tau Kok/Hung Hom 776 3,348 5 253 6,984 92 1,164 0 0 0 Under acquisition 2.09Anchor Street/Fuk Tsun StSan Shan Rd/Pau Chung St726 5,226 6 257 6,534 0 6,534 0 0 0 Commenced 1.25Ma Tau Kok/Hung Hom 1,170 5,464 7 349 10,530 144 1,755 0 0 0 Commenced 1.93Shun Ning Rd Sham Shui Po 826 3,556 5 182 6,977 110 775 0 0 0 Commenced 1.96Ma Tau Wai Rd/Chun Tin StMa Tau Kok/Hung Hom 3,377infounavailable33 bldglotsest. 540households22,640 420 1,900 500 1,000 CommencedEmergency project dueto building collapse inFeb 2010-Totals (ExcludingLinked Sites And MaTau Wai Rd Project)195,025 592,628 758 31,489 1,695,008 16,899 565,123 31,024 55,892 41,464 2.86Average (excludinglinked sites and Ma Tau14,454 41,342 2.94Wai Rd project)Sources: www.ura.org.hk; URA, “URA project highlights”, June 2009,

Appendix 2URA heritage projectsBundled projectsStandalone projects1.2.3.4.5.8 Waterloo Road, Yau Ma Tei. A century-old two-storey red brickbuilding which served as Kowloon’s first water pumping station has beenpreserved alongside a modern residential tower. (Completed)Wan Chai Market, Wan Chai. Phase 3 of The Zenith redevelopmentproject on Queen’s Road East will preserve the facade of the 72 year-oldStreamline Moderne style building while a 39-storey residential tower isbuilt on top. (Work in progress)Lee Tung Street/Queen’s Road, Wan Chai. Three pre-war shop houseswill be preserved as part of the redevelopment project. (Demolition inprogress)Peel Street/Graham Street, Central. Three pre-war shop houses andthe Wing Woo Grocery will be preserved as part of the redevelopmentproject. (Under acquisition)Staunton Street, Central. Three tenement buildings and the BridgesStreet Market will be preserved as part of a scaled-down redevelopmentproject. (Under acquisition)th6. Nga Tsin Wai Village, Wong Tai Sin. The central axis of the 14Century village, including 8 stone houses, the Tin Hau Temple, thevillage gatehouse, and an embedded stone tablet will be preserved fora heritage park, located between two new residential towers. 1 (Underacquisition)ProjectMalloryStreet/BurrowsStreet,Wan ChaiBlue Housecluster,Wan ChaiProjectstatusSiteclearancecompleted in2008, TPBapprovalobtained,Feb 2009Resumptionin progressBuildings10 mid-1920s tenementsGrade II historical buildings9 tenement blocks, mid-1920sto 1950s.Blue House at 72-74 StoneNullah Lane is a Grade Ihistorical building;Tenements at 2-8 Hing WanStreet are Grade II historicalbuildings.Building at 8 King Sing St wasprobably built in the 1950s.Plan6 tenement houses on Mallory Streetwill be renovated and converted intopartitioned units for creative industries.The remaining four houses on BurrowsStreet, which are in poor condition,will be demolished except for theirfacades, and converted into openspace.Joint project with HK Housing Society.Upon completion, site will be turnedover to government for non-profit,educational, recreational, and socialenterprise uses. Residents who wishto stay will be allowed to move back inafter renovation, while those who wantto leave will be compensated.1257.Yu Lok Lane, Central and Western. As part of an overall redevelopmentproject, two pre-war buildings at 11-12 Yu Lok Lane will be preserved,and building relics at 1-2, and 9-10 Yu Lok Lane will be retained andincorporated into public open space.PrinceEdwardRoad, MongKokGazetted.TPB publicconsultationin progressCluster of 10 shop-houses,1930s. Not graded.Commercial, educational, cultural,and recreational uses suggested.Final uses to be decided by publicconsultation.ShanghaiStreet/Argyle Street,Mong KokGazetted.TPB publicconsultationin progressCluster of 14 shophouses, 10built in the 1920s (Grade 1historical buildings),4 built in the 1960s.Commercial, traditional foods anddaily necessities uses suggested.Final uses to be decided by publicconsultation.1 http://www.legco.gov.hk/yr07-08/english/panels/plw/papers/dev0624cb1-1951-4-e.pdf

126Endnotes1 HKSAR Planning Department (1999), Urban Renewal Strategy Study: Executive Summary, http://www.pland.gov.hk/p_study/comp_s/urss/urss_e.htm, downloaded 14 May 2009.2 Brundtland, G. (ed.)(1987), Our Common Future: The World Commission on Environment and Development, Oxford:Oxford University Press.3 United Nations General Assembly (2005), 2005 World Summit Outcome, http://www.who.int/hiv/universalaccess2010/worldsummit.pdf, downloaded 12 July 2010.4 HKSAR Census and Statistics Department, Table: Population by Sex, http://www.censtatd.gov.hk/hong_kong_statistics/statistical_tables/index.jsp?htmlTableID=139&excelID=&chartID=&tableID=001, downloaded 3 June 2009.5 “Memorandum by the Director of Public Works”, 12 March 1953, quoted in Bristow, R. (1984), Land Use Planning inHong Kong: History, Policies and Procedures, Oxford: Oxford University Press, p.74..6 DeGolyer, M. E. (2008), Hong Kong’s Silent Epidemic: Public Opinion Survey on Air Pollution, Environment and PublicHealth 2008, Hong Kong: Civic Exchange, p. 20.7 Ibid., pp. 26-27.8 Leo Ou-fan Lee (2008), City Between Worlds: My Hong Kong, Harvard University Press, p. 250.9 Yeung, R., “The Emergence of New Media in Hong Kong Politics”, Hong Kong Journal, Issue 8, October 2007, http://www.hkjournal.org/PDF/2007_winter/2.pdf, downloaded 22 July 2009.10 Tong lau were a common type of terraced shop-house in the pre-war period, built in a distinctive hybrid Chinese-European style. They were three to five storeys tall, narrow and deep, and usually had balconies supported on pillarsprojecting over the pavement. Most were redeveloped into taller buildings during the post-war period, and now remainonly in isolated pockets.11 Lee (2008), op. cit., p. 214.12 Hong Kong Legislative Council, Official Repord of Proceedings, 28 November 1985, p. 256.13 Tsang, S. W., “A cure for our eyesores”, South China Morning Post, 28 October 1987.14 Pong, Y. Y., personal interview, 21 July 2009.15 Pong, Y.Y., personal interview, 21 July 2009.16 Mu, F. Y. et al., “Dynamic monitoring of the built-up area expansion of Hong Kong based on remote sensing and thedriving mechanism analysis”, International Society for Optical Engineering Conference Proceedings, Vol. 6418, 54181E,2006, http://dx.doi.org/10.1117/12.712956, downloaded 27 May 2009.17 HKSAR Government (2008), “Hong Kong: The Facts – Population”, Hong Kong Fact Sheets, http://www.gov.hk/en/about/abouthk/factsheets/docs/population.pdf, downloaded 12 July 2010.18 Anon, “The choke’s on us,” South China Morning Post, 25 May 2006.19 Hong Kong Tourism Board, “Nature Tours”, Touring, http://discoverhongkong.com/eng/local-tours/outdoor.html,downloaded 1 June 2009.20 Hong Kong Alternatives, Why an Urban Green Park?, http://www.hkalternatives.com/Eng/proposal2.html, downloaded1 June 2009.21 Singapore Urban Redevelopment Authority (2000), Deliberating the Dilemmas, http://www.ura.gov.sg/skyline/2000/05_Sep_Oct/deliberating_the_dilemmas_pdf.pdf, downloaded 1 June 2009.22 University of Hong Kong Public Opinion Programme, (21 January 2006), Planning for West Kowloon and the HarbourFront, p.2, http://www.hkalternatives.com/Eng/downloads/Presentations/HKU-POP-Survey-Results-2006-0124-English.pdf, downloaded 12 July 2010.23 Smith, Peter Cookson (2006), The Urban Design of Impermanence: Streets, Places and Spaces in Hong Kong, Hong Kong:MCM Creations, p. 10.24 Character streets have a concentration of shops specializing in one type of good or service, such as “Sneaker Street” andFlower Market Road in Mong Kok.25 Gorer, P. et al. (2008), “‘Green’ House or Greenhouse? - Climate Change and the Building Stock of Hong Kong andMacau”, Hong Kong: Civic Exchange, p.11.26 Ibid., p. 14.27 Ibid., pp. 15-16.28 HKSAR Planning Department (2002), Urban Design Guidelines for Hong Kong: Executive Summary, http://www.pland.gov.hk/p_study/comp_s/udg/udg_es/dig_eng/urban_cover.htm, downloaded 8 June 2009.29 HKSAR Planning Department (2009), “Urban Design Guidelines”, Hong Kong Planning Standards and Guidelines,http://www.pland.gov.hk/pland_en/tech_doc/hkpsg/full/ch11/ch11_text.htm, downloaded 29 May 2010.30 HKSAR Planning Department (2009), “Introduction”, Hong Kong Planning Standards and Guidelines, http://www.pland.gov.hk/pland_en/tech_doc/hkpsg/full/ch1/ch1_text.htm, downloaded 29 May 2010.31 HKSAR Planning Department (2009), “Implementation”, Hong Kong Planning Standards and Guidelines, http://www.pland.gov.hk/pland_en/tech_doc/hkpsg/full/ch11/ch11_text.htm - 8.Implementation, downloaded 3 July 2009.32 Bristow, R. (1984), Land Use Planning in Hong Kong, Oxford: Oxford University Press, pp. 218-230.33 HKSAR Land Development Corporation (2000), The LDC Experience: 12 years’ Efforts of Urban Renewal, 1988-2000,Hong Kong: The Corporation, p. 2.34 Ng, M. K., “Property-led urban renewal in Hong Kong: Any place for community?”, Sustainable Development, v. 10,2002, pp. 140-146.35 HKSAR Legislative Council Panel on Development (2009), Progress of Work of the Urban Renewal AuthorityCB(1)1947/08-09(03), http://www.legco.gov.hk/yr08-09/english/panels/dev/papers/dev0623cb1-1947-3-e.pdf,downloaded 29 May 2010.36 HKSAR Land Development Corporation (2000), op. cit., p. 9.37 HKSAR Legislative Council Subcommittee to Study the Urban Renewal Authority White Bill (1999), TheAdministration’s response to major concerns raised by various organizations at the Subcommittee meetings held on 19 and 24November 1999, 2 December 1999, http://www.legco.gov.hk/yr99-00/english/hc/sub_com/hs01/papers/a527e01.pdf,downloaded 5 June 2010.38 HKSAR Planning Department (1999), op. cit., Chapter 2.39 Leung Yiu Chung to opposed the URA bill for several reasons, including the threat the URA’s extraordinary powers ofresumption would pose to individual property rights, the inadequacy of the compensation rates offered, and the opacityof the URA’s redevelopment schedule. HKSAR Legislative Council (2000), Official Record of Proceedings 26 June 2000,pp. 8653-8657, http://legco.gov.hk/yr99-00/english/counmtg/hansard/000626fe.pdf, downloaded 5 June 2010.40 Ibid. , pp. 8645-8646.41 Ibid., pp. 8647-8649.42 HKSAR Urban Renewal Authority Ordinance, para. 20.43 HKSAR Planning and Lands Bureau, Letter to Ms. Odelia Yeung, clerk to the LegCo Subcommitee to study the UrbanRenewal Authority White Bill, 1 February 2000, pp. 3-4, http://www.legco.gov.hk/yr99-00/english/bc/bc09/papers/954e.pdf, downloaded 28 August 2009.44 HKSAR Planning Department (1999), op. cit., para. 7.45 HKSAR Planning Department (1999), op. cit., para. 2.46 HKSAR Planning and Lands Bureau (2002), Legislative Council Panel on Planning, Lands, and Works - Capital Injectioninto the Urban Renewal Authority, http://www.legco.gov.hk/yr01-02/english/panels/plw/papers/plw0531cb1-1828-1e.pdf, downloaded 29 May 2010.47 The former LDC, which had less power to resume land, generally offered market rate compensation (although itwas sometimes willing to pay more to persuade recalcitrant owners to leave). When the URA was first formed, thegovernment proposed using a ten year-old flat as the benchmark for compensation, but under political pressure fromlegislators it increased compensation to a seven year-old flat.48 The LDC used to have to re-house tenants using its own resources, but the URA now receives assistance from theHousing Authority and Housing Society.49 HKSAR Planning and Lands Bureau (2002), op. cit.50 HKSAR Urban Renewal Authority (2008), Urban Renewal: A Sensible Balance – Annual Report 2007-2008.51 Lam, C., “Urban Renewal Strategy Review – A Timely Initiative”, Presentation to the Royal Institute of CharteredSurveyors Asia, 25 July 2009, http://www.ricsasia.org/newsDetail.php?id=66, downloaded 2 February 2010.52 HKSAR Planning and Lands Bureau (2002), op. cit.53 A number of 999-year leases were issued between 1849 and 1898 on Hong Kong Island and on the Kowloon peninsula.999 year leases were initially introduced as an economic concession towards merchants in the very early days of thecolony, and later offered as a political concession to proven Chinese land owners on the Kowloon peninsula when theBritish took control of it in 1860. The practice was ended in 1898. Being effectively freehold land, 999-year leases arenow extremely valuable because the owners will not need to pay lease renewal premiums for the conceivable future.Bristow, R. (1984), op. cit., pp. 27-38.

54 Yeh, A. (1993), “Urban planning under a leasehold system”, Working Paper No. 57, Hong Kong: Centre of UrbanPlanning and Environmental Management, University of Hong Kong, pp. 4-6.55 HKSAR Government (2010), “Tax rates of property tax”, http://www.gov.hk/en/residents/taxes/taxfiling/taxrates/propertyrates.htm, downloaded 29 May 2010.56 Cullen, R. and Wong, A. (2008), The Foundations of the Hong Kong Revenue Regime, Hong Kong: Civic Exchange, pp.17, 25, http://www.civic-exchange.org/eng/upload/files/200812_hkTaxRegime.pdf, downloaded 12 July 2010.57 Yeh, A. (1993), op. cit.58 HKSAR Treasury (2002, 2004, 2006, 2008), “Accounts of the Government for the Year Ended 31 March 2008 (2006,2004, 2002)”, http://www.try.gov.hk/internet/eharch_annu_statend08.html - p, and http://www.try.gov.hk/internet/eharch_annual.html, downloaded 8 September 2009.59 For much of Hong Kong’s history, the Hong Kong dollar has been pegged either to the pound sterling or the US dollar:it was pegged to the pound between 1935 and 1972; and then pegged to the US dollar between 1972 and 1974, andagain from 1983 to the present day. This means that Hong Kong’s government cannot raise or lower interest rates inorder to slow down or stimulate the economy, and resorts to land supply manipulation instead.60 Cullen and Wong (2008), op. cit., p. 22.61 Ibid.62 Hui, E., Lam, M. and Ho, V., “Market disequilibrium and urban land shortages: Analysis of policy and patterns inHong Kong”, Journal of Urban Planning and Development, ASCE 132 (2), 2006, pp. 80-88.63 Bristow, R. (1984), op. cit., pp. 33-34.64 HKSAR Census and Statistics Department, “Population by type of housing, 1996, 2001, and 2006”, Hong KongStatistics, http://www.censtatd.gov.hk/hong_kong_statistics/statistical_tables/index.jsp?charsetID=1&subjectID=1&tableID=160, downloaded 12 July 2010.65 Bristow, R. (1984), op. cit., p. 29, 72.66 Ibid., p. 91.67 The URA Ordinance states that one of its purposes is to replace dilapidated areas with new development which is“properly planned” and “provided with adequate transport and other infrastructure and community facilities”.68 Brownlee, I., personal interview, 25 June 2009.69 Yeh, A. (1993), op. cit., pp. 18-20.70 Ibid., pp. 16-17.71 Nissim, R. (1998), Land Administration and Practice in Hong Kong, Hong Kong: Hong Kong University Press, pp.49-50.72 Ibid., pp. 91-93.73 Yiu, E. (2009), Hong Kong Building Control and Land Administration E-Museum, http://rec.hku.hk/ecyyiu/HKBCLAEM/HKBALEM%20r4.pdf, downloaded 12 July 2010.74 It should be noted that Hong Kong and Britain’s planning systems have diverged considerably since 1939. Hong Kong’sgrew into a plan-based system of zoning and development control. Britain’s system has since evolved into a discretionarysystem where local councils grant or reject planning permissions, required for all new developments, according to themerits of individual cases.75 Yeh, A. (1993), op. cit., pp. 13-15; Bristow, R. (1984), op. cit., pp. 56-57, 73.76 Tang, B. S. and Leung, H. F., “Planning Enforcement in Hong Kong: Implementing the New Planning Law before theChange of Sovereignty”, Town Planning Review, v.69 no.2, 1998, pp.153-169.77 Chan, K., “Government demands $300m premium for Mongkok site”, The Standard, 16 December 1999.78 Poon, A. (2006), Land and the Ruling Class in Hong Kong, Richmond, Canada: Alice Poon, pp. 89-90.79 Ibid., pp. 52-57.80 Nissim, R. (1998), op. cit., p. 68.81 Yeh, A. (1993), op. cit., p. 9. Also see Bristow, R. (1984), op. cit., p. 79.82 Hong Kong Legislative Council, Official Repord of Proceedings, 6 November 1986, pp. 362-363.83 Working Party on the Possible Conversion of Selected Industrial Buildings for Loft Apartments (2002), “Working PaperNo. 40: Final Report on the Case Studies of the Possible Conversion of Selected Industrial Buildings for Loft Apartmentsin Ma Tau Kok and Yau Tong”, Annex 1: Working Papers and Technical Reports of the HK2030 Study, Hong Kong 2030Planning and Vision Study, 2007, http://www.pland.gov.hk/pland_en/p_study/comp_s/hk2030/eng/wpapers/pdf/wpaper40.pdf , p. 10, downloaded 12 July 2010.84 Ratings and Valuation Department, “Hong Kong Property Review 2010”, Publications, http://www.rvd.gov.hk/en/publications/hkpr10.htm, p.29, downloaded 12 July 2010.85 Working Party on the Possible Conversion of Selected Industrial Buildings for Loft Apartments (2002), op. cit., p. 19.86 Nissim, R., personal communication, 24 October 2009. Brownlee, I., personal interview, 25 June 2009.87 Nissim, R., personal communication, 24 October 2009.88 Betterment levies are a type of tax on land value improvements based on the idea that the community should be able tocapture some of the wealth that has been enabled (at least in part) by the community’s investment in better infrastructureand amenities. The Special Committee viewed lease conversion premiums as a rough proxy for a betterment tax, buta very uneven and imperfect one because it affects different leaseholders differently depending on the content of theirleases.89 Hong Kong Institute of Surveyors (2003), “The HKIS Calls for Change in Land Premium Policy to ExpediteUrban Redevelopment and Revive Private Capital Inflows”, Press Releases, http://www.hkis.org.hk/hkis/html/upload/NewsPressRelease/nwpr88_0.pdf, downloaded 12 July 2010.90 In 1946, when a large number of 75-year leases came due, the government temporarily slashed renewal premiums by50% in order to encourage cash-strapped tenants to repair their war-damaged buildings. Then in 1973, when manyrenewable leases came due, the government sharply reduced the new crown rent assessments because of a public outcry,as by then a booming property market would have multiplied crown rents by 750 to 2000 times. See Bristow, R. (1984),op. cit., pp. 67, 136.91 Li, L. H. (2006), Development Appraisal of Land in Hong Kong, Hong Kong: Chinese University Press, p. 59.92 Change of land use waivers do not modify the lease, but allow the owner a temporary exemption from the leaseconditions for the lifetime of the building or the duration of the lease. Full premiums are still charged uponredevelopment.93 Tsang, D. (2009), Breaking New Ground Together: 2009-2010 Policy Address, paras. 24-25, http://www.policyaddress.gov.hk/09-10/eng/p24.html, downloaded 16 October 2009.94 Information Services Department, “LCQ 3: Revitalisation of industrial buildings”, Press Release, 20 January 2010,http://www.info.gov.hk/gia/general/201001/20/P201001200192.htm, downloaded 12 July 2010.95 Hong Kong Institute of Surveyors (2003), op. cit.96 Rates are a tax assessed based on land values. If many buildings were redeveloped to more valuable uses, revenue fromrates would go up.97 HKSAR Government (2006), Broadening the Tax Base, Ensuring our Future Prosperity: What’s the Best Option for HongKong?, para. 15, http://www.taxreform.gov.hk/eng/pdf/Chapter_01.pdf, downloaded 26 October 2009.98 Brown, S., personal interview, 19 June 2009.99 Poon, A. (2006), op. cit., pp. 89-90.100 HKSAR Planning Department (1999), op. cit.101 HKSAR Urban Renewal Authority (2005), Acquisition Policy, http://www.ura.org.hk/html/c906000e13e.html,downloaded 12 July 2010.102 HKSAR Industry Department (2000), Legislative Council Trade and Industry Panel - Renewal of Old and Planning of NewIndustrial Areas, p.2, http://www.legco.gov.hk/yr99-00/english/panels/ti/papers/a1420e.pdf, downloaded 12 July 2010.103 Yiu, E. (2009), op. cit.104 Nissim, R., personal interview, 18 May 2009.105 Yiu, E., “King of the hill looks to Hollywood’s heights”, South China Morning Post, 27 March 2009.106 Nissim, R., personal interview, 18 May 2009.107 The Lands Tribunal in fact approved 20 applications, but one was vacated by court order. HKSAR Development Bureau(2009), “Proposals to facilitate redevelopment by the private sector: applications threshold under the Land (CompulsorySale for Redevelopment) Ordinance”, Legislative Council Panel on Development Paper CB(1)2260/08-09(01), http://www.legco.gov.hk/yr08-09/english/panels/dev/papers/dev0716cb1-2260-1-e.pdf, downloaded 12 July 2010.108 See public submissions available on Legislative Council website. HKSAR Legislative Council Panel on Development(2009), “Special meeting on Thursday 16 July 2009 at 2:00 pm in the Chamber of the Legislative Council Building,revised agenda (as at 15 July 2009)”, http://www.legco.gov.hk/yr08-09/english/panels/dev/agenda/dev20090716.htm,downloaded 12 July 2010.109 Data from Home Affairs Department’s Database of Private Buildings, https://bmis.buildingmgt.gov.hk/eng/buildingsearch.php, downloaded 12 July 2010.127

128110 Chan, B. W. (2002), “The history of building management in Hong Kong: Enactment of the Building ManagementOrdinance [Cap. 344] and its effectiveness”, presented at First Regional Conference on Private Building Management,http://www.buildingmgt.gov.hk/file_manager/en/documents/8.pdf, downloaded 15 October 2009.111 Mutual Aid Committees began to be established in 1973 under the supervision of District Offices under the HomeAffairs Department. Their original purpose was not building management exclusively, but to improve communicationbetween the government and the public, to facilitate neighbourliness, and to carry out social campaigns (i.e. againstcrime or to promote hygiene). Scott, J. L., “Structure and function in an urban organization: the mutual aidcommittees,” Journal of the Hong Kong Branch of the Royal Asiatic Society, 22, 1982, pp. 1-30.112 Brownlee, I., personal interview, 25 June 2009.113 See HKSAR Home Affairs Department (2008), “Assistance provided by the Home Affairs Department to owners”,Formation of Owners Corporation, http://www.buildingmgt.gov.hk/en/formation_of_owners_corporation/4_4.htm,downloaded 14 October 2009. Also see Wong, L. C., “A helping hand for Hong Kong’s old buildings,” presented atChartered Institute of Housing Asia Pacific Branch 40 th International Housing Conference, 24 November 2006, http://www.cih.org.hk/publication_dnload/events2006112401/LC Wong (2).pdf, downloaded 14 October 2009.114 Brownlee, I., unrecorded presentation at Civil Society Summit on Urban Renewal held by the Hong Kong Council ofSocial Services, 6 June 2009. Also Brownlee, I., personal interview, 25 June 2009.115 HKSAR Office of the Ombudsman, “Case summary: complaint against the Buildings Department for delay in takingfollow-up action after serving a demolition order”, case ref: OMB 1998/1604, March 1999, http://www.ombudsman.gov.hk/reports/1999_03_04.DOC, downloaded 12 July 2010.116 Au, C. K., “HKSAR Legislative Council Finance Committee’s Examination of Estimates of Expenditures 2009-2010”,Reply Serial Number DEVB(PL)087, 16 March 2009, http://www.bd.gov.hk/english/documents/SFCQ2009/DEVB(PL)087.pdf, downloaded 15 October 2009.117 In 2000, 10,481 statutory repair orders were issued. This rose to 56,028 in 2002, then fell back to a relatively stableaverage of 32,000 cases per year between 2003 and 2008. Instances of compliance meanwhile climbed from around10,000 in 2000 to around 28,000 in 2008. Buildings Department, Monthly Digest, January 2005 and June 2009, http://www.bd.gov.hk/english/documents/index_statistics.html, downloaded 12 July 2010.118 HKSAR Buildings Department (2009), “Buildings safety inspection scheme (voluntary)”, Public Services, http://www.bd.gov.hk/english/services/index_exist2_pmb.html, downloaded 15 October 2009.119 HKSAR Legislative Council, Official Record of Proceedings, 17 December 2008, http://www.legco.gov.hk/yr08-09/english/counmtg/hansard/cm1217-translate-e.pdf, downloaded 15 October 2009.120 Wong, O. (2010), “Why the city needs legislation on building safety”, South China Morning Post, 30 January 2010.121 HKSAR Legislative Council Panel on Development (2008), Mandatory building inspection scheme and mandatorywindow inspection scheme: target buildings, inspection items, and operational procedures, http://www.legco.gov.hk/yr07-08/english/panels/plw/papers/dev0624cb1-1602-5-e.pdf, downloaded 15 October 2009.122 Ho, L. S., “Rent control: its rationale and effects”, Urban Studies, v. 29 no. 7, 1992, pp. 1183-1189, http://www.ln.edu.hk/econ/staff/rentcontrol.pdf, downloaded 12 July 2010.123 Lam, W. M. (2004), Understanding the Political Culture of Hong Kong, New York: ME Sharpe, pp. 65-72.124 HKSAR Government (1997), “Rent Control”, Hong Kong Yearbook 1997, http://www.yearbook.gov.hk/1997/ch13/e13f.htm, downloaded 12 July 2010.125 Ibid.126 HKSAR Legislative Council Panel on Housing (2003), Landlord and Tenant Consolidation Ordinance – Relaxation ofSecurity of Tenure [CB(1) 785/02-03(03)].127 Ho, L. S. (1992), op. cit.128 Ibid.129 Brownlee, I. personal interview, 25 June 2009.130 Nissim, R. personal interview, 18 May 2009.131 Census and Statistics Department (2009), “Loans and Advances for Use in Hong Kong by Economic Sector”, HongKong Annual Digest of Statistics 2009 Edition, p.247.132 Brown, S. personal interview, 19 June 2009.133 Brown, S. personal communication, 3 June 2009.134 Studwell, J. (2007), Asian Godfathers, Essex: Profile Books, pp. 100-101.135 HSBC Holdings plc (2008), Annual Report and Accounts 2008, p.88. http://www.investis.com/reports/hsbc_ar_2009_en/report.php?type=1&zoom=1&page=2, downloaded 19 November 2009. In 2008, Hong Kong’s contribution toHSBC’s global profits leapt to 59% due heavy losses in North America.136 Yam, J. (2009), “Evolution of a 70% loan-to-value policy”, http://www.hktdc.com/info/mi/a/ef/en/1X05WT9C/1/Economic-Forum/Evolution-Of-70-Loan-To-Value-Policy.htm, downloaded 12 July 2010.137 HKSAR Legislative Council, Official Record of Proceedings, 16 September 1998, http://www.legco.gov.hk/yr98-99/english/counmtg/hansard/980916fe.htm, downloaded 12 July 2010.138 Ibid.139 HKSAR Legislative Council, Official Record of Proceedings, 21 February 2001, p.152, http://www.legco.gov.hk/yr00-01/chinese/counmtg/floor/010221cd.pdf, downloaded 12 July 2010.140 Land Registry (2010), “Statistics of Agreements for Sale and Purchase of Residential Building Units: Primary andSecondary Sales (2002-2009)”, Statistics, http://www.landreg.gov.hk/en/monthly/agt-primary.htm, downloaded 12 July2010.141 For aggregated historical data, see City University of Hong Kong and Hong Kong Housing Authority (2007), ”OtherHousing Statistics – Private Domestic Property – Completions (1979 to 2007)”, Hong Kong Housing Home Page, www.cityu.edu.hk/hkhousing/hs/others/HKsupW6_79-07.htm. For recent data, see Rating and Valuations Department(2010), Hong Kong Property Review 2010, www.rvd.gov.hk/en/publications/hkpr10.htm, downloaded 12 July 2010.142 Rating and Valuations Department (2010), Hong Kong Property Review 2010, p. 15, www.rvd.gov.hk/en/publications/hkpr10.htm, downloaded 12 July 2010.143 Bank of East Asia, News Release: BEA’s Relaxed Mortgage Terms Help Homebuyers of Aged Property – Enjoy Long RepaymentPeriods up to 30 years, 25 April 2007, www.bea.com/FileManager/EN/Content_2396/pld20070425e.pdf, downloaded12 July 2010.144 HK Government Special Committee on Compensation and Betterment (1992), Report of the Special Committee onCompensation and Betterment, Hong Kong: Government Printer, p. 35.145 Brownlee, I., personal interview, 25 June 2009.146 Land Development Corporation (2000), The LDC Experience: 12 Years of Urban Renewal 1988-2000, Hong Kong:Government Printer, p. 72.147 Lai, L. (1997), Town Planning in Hong Kong: A Critical Review, Hong Kong: City University Press, pp. 52-54. Also seeHKSAR Planning Department (2002), HKSAR Legislative Council Panel on Planning, Land and Works – ComprehensiveDevelopment Area Zoning on Statutory Plans [LC Paper No. CB(1)1508/01-02(02)], p. 3, http://www.legco.gov.hk/yr01-02/english/panels/plw/papers/plw0426cb1-1508-2e.pdf, downloaded 16 October 2009.148 Brownlee, I., personal interview, 25 June 2009.149 Land Development Corporation (2000), op. cit., p. 34.150 HKSAR Planning Department (2002), op. cit., p. 2.151 HKSAR Legislative Council Panel on Development (2009), op. cit.152 Views to this effect were expressed by the Hong Kong Institution of Engineers, the Hong Kong Institute of Architects,the Hong Kong Institute of Real Estate Administration, and legislator Christine Loh, among others.153 So, U., “URA slammed for seeking to profit in Sham Shui Po plan”, The Standard, 10 November 2007.154 Wong, L. C. (2006), op. cit.155 HKSAR Legislative Council, Official Record of Proceedings, 3 July 2003, pp. 8328-8329.156 HKSAR Urban Renewal Authority (2009), All Projects By Districts, http://www.ura.org.hk/html/c800000e1e.html,downloaded 18 June 2009. These figures exclude joint URA/Housing Society projects, for which pre-redevelopmentGFA figures are not readily available. They also exclude “linked sites”, in which the government grants the URA agreenfield site with which to subsidize a nearby redevelopment project.157 HKSAR Legislative Council (1999), Subcommittee to study the Urban Renewal Authority White Bill: The Administration’sresponse to major concerns raised by various organizations at the Subcommittee meetings held on 19 and 24 November 1999,p.13, http://www.legco.gov.hk/yr99-00/english/hc/sub_com/hs01/papers/a527e01.pdf, downloaded 12 July 2010.158 Town Planning Board, “Master Layout Plan for Proposed URA Hanoi Road Development Scheme K11”, DevelopmentSchedule (K11/MLP/7/Amendment 2),Planning Application No. A/K1/208, 2 June 2005.159 Town Planning Board (1991), Decision rendered 27 September 1991 (Not Accepted/Rejected), on PlanningApplication Case No. A/K3/206 for 8 Argyle Street. Available at Statutory Planning Portal, http://www.ozp.tpb.gov.hk/,downloaded 12 July 2010.160 Jacobs, J. (1961), The Death and Life of Great American Cities, New York: Random House 1993 edition, pp. 233-244.161 Krier, L. (1984), “Urban Components”. in eds. Larice, M. and Macdonald, E. (2006), The Urban Design Reader,Routledge, pp. 241-250162 Pong, Y. Y., personal interview, 21 July 2009.

163 Ng, K. S. (1997), “Land Acquisition for Urban Renewal and Urban Design by Land Development Corporation”,Masters Thesis, Department of Architecture, University of Hong Kong, p. 52.164 HKSAR Buildings (Planning) Regulations, Chapter 123F, Schedule 1.165 Pong, Y. Y., personal interview, 21 July 2009.166 Cookson Smith, P., (2006), op. cit., pp. 129-130.167 Ibid., p.130.168 HKSAR Land Development Corporation (2000), op. cit.169 Cheung, B. (2009), “Building an Environmentally Sustainable Future for Hong Kong”, speech given on 22 May 2009,http://www.ura.org.hk/usrAtt/100000/CURA_speech_-_22May09_(2).pdf, downloaded 10 July 2009.170 Before 1999, the elected Urban and Regional Councils were responsible for managing municipal services in HongKong, including parks and recreational facilities. The Urban Services Department was their executive arm. Its duties weretaken over by the Leisure and Cultural Services Department when Tung Chee-Hwa abolished the Urban and RegionalCouncils in response to their mishandling of the bird flu (H5N1) outbreak of 1997.171 Yan, C. Y. and Li, V., “Upmarket bar’s rooftop garden is public space”, South China Morning Post, 5 April 2009.172 The term “planning gain” refers to the practice of requiring private developers to build public facilities in return forplanning permission.173 HKSAR Development Bureau, “Provision of public facilities in private developments”, paper presented for discussionat Legislative Council Panel on Development meeting, 8 December 2008, pp. 10, 16, 17, http://www.legco.gov.hk/yr08-09/english/panels/dev/papers/dev1208cb1-319-3-e.pdf, downloaded 26 July 2009.174 Wong, O. and Ng, J.,“Renewals must follow green code, URA says”, South China Morning Post, 12 May 2009.175 It is not clear whether the URA’s green measures include following the HK BEAM standard in all future developments.However, even if it does, HK BEAM is less stringent than international green building certification standards such LEEDand BREEAM. The LEED for Neighbourhood Development scheme actually operates at the neighbourhood levelrather than that of individual buildings, and includes factors such as walkability, transport linkages, economic and socialdiversity, pedestrian environment, and open spaces. US Green Building Council (2007), “LEED for NeighbourhoodDevelopment Rating System – Pilot Version”, http://www.usgbc.org/ShowFile.aspx?DocumentID=2845, downloaded 28July 2009.176 A study done in New York City comparing two residential neighbourhoods in Queens with comparable car ownershiprates and access to public transport found that residents of the neighbourhood with abundant off-street parking were28% more likely to drive to work than residents of the neighbourhood where off-street parking was less available.Weinberger, R. et al. (2008), New York: Transportation alternatives, http://www.transalt.org/files/newsroom/reports/guaranteed_parking.pdf, downloaded 12 July 2010.177 Pong, Y. Y., personal interview, 21 July 2009.178 HKSAR Legislative Council Panel on Home Affairs Subcommittee on Heritage Conservation (2007), Preservation ofthe Open Air Bazaar at Tai Yuen Street and Cross Street [LC Paper No. CB(2)290/07-08(01)], http://www.legco.gov.hk/yr07-08/english/panels/ha/ha_hec/papers/ha_hec1113cb2-290-1-e.pdf, downloaded 12 July 2010; HKSAR LegislativeCouncil Panel on Home Affairs (2007), Relocation of Licensed Hawkers at Tai Yuen Street (South) and Cross Street (East),Wan Chai [LC Paper No. CB(2)2417/06-07(02)], http://www.legco.gov.hk/yr06-07/english/panels/ha/ha_hec/papers/ha_hec0711cb2-2417-2-e.pdf, downloaded 12 July 2010; Town Planning Board, “Master Layout Plan for URA Schemeat Wanchai Road/Tai Yuen Street (I.L. 8953) Wan Chai, Hong Kong” Plan No. H9/MLP4A, 11 September 2004.179 HKSAR Urban Renewal Authority (2009), Mong Kok Revitalization Project, http://www.ura.org.hk/html/c804000e7e.html, downloaded 12 July 2010.180 HKSAR Planning Department (2007), Public Consultation Digest – Area Improvement Plan for the Shopping Areas ofMong Kok, http://www.gov.hk/en/residents/government/publication/consultation/docs/2007/digest.pdf, downloaded 12July 2010.181 Carmona, M. et al. (2003), Public Places Urban Spaces: The Dimensions of Urban Design, Oxford: Elselvier, p. 187.182 HKSAR Urban Renewal Authority, Press statement on ‘wall effect’ allegations, 25 February 2007.183 Chui, T., “Tsuen Wan pleads for air”, The Standard, 26 February 2007.184 Town Planning Board (2008), Minutes of the 386 th meeting of the Metro Planning Committee held at 9 a.m. on 5.12.2008,p. 30, http://www.info.gov.hk/tpb/en/meetings/MPC/Minutes/m386mpc_e.pdf, downloaded 12 July 2010.185 Ng, J, “Kwun Tong tower needs 20 metre cut”, South China Morning Post, 24 January 2009.186 Smith, PC (2006), The Urban Design of Impermanence, Hong Kong: MCCM Creations, p. 29.187 HKSAR Legislative Council, Official Record of Proceedings, 17 January 2007, p. 3909, http://www.legco.gov.hk/yr06-07/english/counmtg/hansard/cm0117-translate-e.pdf, downloaded 12 July 2010. Also see Yu, FJ (2009), “Western Market,presence of absence”, Hong Kong Stories, Hong Kong: Journalism Media Studies Centre, University of Hong Kong, 9April 2009, http://jmsc.hku.hk/hkstories/content/view/771/9015/, downloaded 12 July 2010.188 HKSAR Urban Renewal Authority, Acquisition Policy July 2009, http://www.ura.org.hk/html/c906000e1e.html,downloaded 12 July 2010; HKSAR Urban Renewal Authority (2008), “Rehousing and Ex-gratia CompensationPolicies”, Compensation & Re-housing, http://www.ura.org.hk/html/c910000e1e.html, downloaded 9 August 2009.189 Jacobs, J. (1961), The Death and Life of Great American Cities, New York: Random House 1993 edition, pp. 244-261.190 HKSAR Legislative Council, The LegCo Reporter 2005-2006, Issue 5, 24 November 2005, http://www.legco.gov.hk/yr05-06/english/legco_rpt/l_rpt_1124.htm, downloaded 12 July 2010.191 HKSAR Legislative Council, Motion on ‘developing diversified hawking and bazaar economic activities’ moved by HonWONG Kwok-hing at the Legislative Council meeting of Wednesday, 14 November 2007, http://www.legco.gov.hk/yr07-08/english/legco_rpt/legco_motion11152-e.pdf, downloaded 12 July 2010.192 HKSAR Planning Department (2009), Hong Kong Planning Standards and Guidelines, Chapter 4 para. 1.10, http://www.pland.gov.hk/pland_en/tech_doc/hkpsg/full/ch4/ch4_text.htm - 1.8 Standards for Provision of Open Space,downloaded 29 January 2010.193 HKSAR Urban Renewal Authority (2005), Annual Report 2004-05, p. 29, http://www.ura.org.hk/usrAtt/222000/2005_05_mds.pdf, downloaded 12 July 2010.194 Smith, P. L., “At risk in Hong Kong: a slice of hawkers’ magic”, New York Times, 14 June 2007, http://www.nytimes.com/2007/06/14/world/asia/14iht-hong.1.6136617.html, downloaded 12 July 2010.195 HKSAR Urban Renewal Authority (2008), Urban Renewal: A Sensible Balance – Annual Report 2007-2008, p. 42.196 HKSAR Legislative Council Panel on Development (2009), op. cit., Annex I, http://www.ursreview.gov.hk/eng/doc/20090623_panel_paper_1_annex.pdf, downloaded 12 July 2010.197 HKSAR Urban Renewal Authority (2008), op. cit., pp. 55, 88.198 Information Services Department, “LCQ 6: Unauthorized building works”, Press Release, 12 December 2007, http://www.info.gov.hk/gia/general/200712/12/P200712120181.htm, downloaded August 17 2009.199 Hong Kong Housing Society, “Building management and maintenance scheme”, Our Business, http://www.hkhs.com/eng/business/pm_bmm.asp, downloaded 12 July 2010; HKSAR Buildings Department (2010), Building Safety LoanScheme, http://www.bd.gov.hk/english/services/index_bsils.html, downloaded 12 July 2010.200 Information Services Department, “Operation Building Bright to create many job opportunities (with video)”, PressRelease, 26 February 2009, http://www.info.gov.hk/gia/general/200902/26/P200902260200.htm, downloaded 12 July2010.201 HKSAR Legislative Council Secretariat (2008), Built Heritage Conservation Policy In Selected Places, p. 50.202 Ibid., p. 48.203 Ibid.204 HKSAR Urban Renewal Authority (2009), “Welcome to Roof Garden of Woo Cheong Pawnshop Building Cluster”,pamphlet distributed by URA staff at J-Residence rooftop garden.205 Wan, W., “The preservation of Wo Cheong Pawn Shop building cluster – make or break?”, presentation at CityUniversity of Hong Kong, 18 April 2009, http://bst.cityu.edu.hk/photo/seminar_materials/2009Talk2.pdf, downloaded12 July 2010.206 Hong Kong Institute of Architects (2004), A Study on Historical and Architectural Context of Wan Chai Market, http://www.few.hk/isproject/cd/doc/WanChai_Marke_study_final.pdf, downloaded 13 July 2009.207 The Lifestyle Group, “About Western Market”, http://www.westernmarket.com.hk/eng/about.htm, downloaded 21August 2009.208 Chau, W., “Our Town,” Hong Kong Magazine, 10 October 2008.209 HKSAR Urban Renewal Authority, “URA commenced two preservation cum revitalisation projects”, News and Notices,19 September 2008, http://www.ura.org.hk/html/c1002083e290b.html, downloaded 12 July 2010.210 The author attended one of the URA’s public forums at the Boys’ and Girls’ Clubs Association at 3 Lockhart Road inWan Chai on 18 July 2009. The tone there was overwhelmingly negative, although different stakeholders expresseddissatisfaction for entirely different reasons. The URA’s summaries of its public engagement exercises are available athttp://www.ursreview.gov.hk/eng/publication.html, downloaded 12 July 2010.211 Nissim, R., personal interview, 18 May 2009.212 Brown, S., personal interview, 19 June 2009.213 Wong, O., and Leung, P., “Inspected buildings could be certified,” South China Morning Post, 4 February 2010.214 Brown, S., personal interview, 19 June 2009.215 Wyler, S. (2008), “A history of community asset ownership”, Development Trusts Association website, http://www.dta.org.uk/aboutus/history, downloaded 6 February 2010.129

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