Hong Kong aims to speed up urban renewal in old districts with new guidelines allowing landowners to transfer development potential of sites

Hong Kong authorities will introduce a new town planning mechanism allowing landowners to transfer a site’s development potential to nearby plots as an incentive to speed up urban regeneration in old districts.

The new tool, in the form of guidelines for transferring so-called plot ratios, would also encourage landowners to preserve valuable architecture and create open spaces and community facilities, authorities said in a paper submitted to the Town Planning Board on Thursday.

The board will discuss the guidelines, issued by the Planning Department, on Friday for use in assessing future land applications.

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“The administration supports the introduction of [the mechanism] in Yau Mong as a pilot to incentivise the private sector to participate in urban renewal with a suitable development scheme through [the town planning process],” the department said in the paper, referring to Yau Ma Tei and Mong Kok.

“[Redevelopment] momentum in Yau Mong has also been slow.”

Yau Ma Tei and Mong Kok are among the city’s oldest areas, with more than 2,000 buildings already over half a century old in the two crowded areas.

The department said the two districts had numerous old buildings with development potential but the city lacked a mechanism to encourage developers to assemble them for “gainful use”, making it difficult to carry out urban renewal effectively.

The government issued just 50 occupation permits certifying the completion of a new building in the two districts over the past 20 years.

Housing supplied by Urban Renewal Authority redevelopment projects accounted for only a small percentage of homes provided in the private sector. In the last financial year, only 910 homes were contributed, roughly 6 per cent of the total private housing supply.

Under the “transfer of plot ratio” mechanism, landowners can shift permitted floor areas from one site to two others at most but they must be located in the same outline zoning plan, a statutory blueprint showing different land uses and major road systems of an individual area. It means the sites should not be too far from each other.

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Sites of low redevelopment potential, such as isolated dilapidated blocks, buildings with preservation value and those suitable for open space or community facilities, will become “sending sites” of their development potential.

“Receiving sites”, usually larger ones in more strategic and accessible locations suitable for high-density development, will obtain the potential. The department said sites larger than 1,000 square metres (10,760 sq ft) would be favourably considered.

Receiving sites can gain up to 30 per cent on top of their permitted plot ratio, calculated by dividing the floor area of the project by the total size of the plot.

One single application can include unlimited sending sites and at most two receiving sites but all plots must be located under the same outline zoning plan.

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The government will also allow non-residential sites to send their plot ratios to residential ones for building homes in the future.

Applications can also cover government land and private sites where applicants do not have full ownership.

To trigger a compulsory sale of a site for redevelopment, developers have to acquire at least 80 per cent of an old building which can be a problem because of scattered ownership.

To ensure proper management and maintenance of sending sites, specific conditions would be added to their land leases to ensure landowners took up their responsibilities, the department said.