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Urban planning
Opinion
SCMP Editorial
Editorial
SCMP Editorial

Hong Kong is right to harness market forces for urban renewal

Plot ratio concessions will encourage developers to rebuild older properties, realigning commercial interests with the city’s development needs

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An old residential building in San Po Kong, Hong Kong. Buildings aged at least 50 doubled to 10,200 between 2014 and 2023, and are projected to surge by 138 per cent to 24,300 by 2043. Photo: Edmond So
SCMP Editorial
Editorials represent the views of the South China Morning Post on the issues of the day.
Urban renewal is essential, not optional, for a small and densely populated city like Hong Kong. While new buildings continue to mushroom across the districts each year, it is outpaced by the relentless ageing of blocks, many of which have become dilapidated and pose a danger to public safety. In this context, the government’s new five-year bonus plot ratio pilot scheme to expedite redevelopment is not merely a technical tweak to planning rules. It is a much-needed and pragmatic attempt to realign developers’ incentives with the city’s redevelopment needs. This will hopefully enhance building safety, housing supply and the quality of living in Hong Kong.

Starting from September, developers can get an extra 20 per cent of gross floor area as a reward for taking on private redevelopment projects in seven designated old districts. Only residential plots of at least 700 square metres (7,535 sq ft) with buildings aged 50 years and above will be eligible. Relevant lease conditions and penalties will be set out to ensure the projects are completed on time.

Alternatively, the bonus gross floor area can also be converted into land premium value to offset the land premium payable for the redevelopment project or any land transactions by the developer, including land bidding, lease modification or land exchange projects, in the Northern Metropolis project and other areas in the city within a decade.

First announced in the chief executive’s policy address last year, this initiative follows the legislative amendment two years ago to lower the compulsory sale threshold for redevelopment. The measures underline the government’s awareness of the difficulties involved and its determination to accelerate the slow pace of urban renewal.
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