The appraisal of "residential (group E)" zoning and its implications for residential development in Hong Kong

Abstract

The purpose of “Residential (Group E)” (“R(E)”) zoning is to encourage residential developments in phasing out industrial sites. Applications for planning permissions are required for proposed housing developments in this zone due to the residential-industrial interface issues.

The study aims to appraise the effectiveness of this zoning policy in facilitating the regeneration of industrial area, explore the barriers that hinder redevelopment decisions and investigate the residential development outcomes in “R(E)”. The analyses of Planning Authority’s impetus for rezoning, the activeness of redevelopment activities and the likelihood of obtaining planning approvals in “R(E)”, give evidences for the evaluation of its performance. The development hurdles in this zone are discussed from landlord’s perspective by examining the site characteristics and development costs. With respect to the proximity to industrial buildings, the characteristics of residential developments in “R(E)” are also studied in terms of their design constraints and property value.

The research finds that the performance of “R(E)” zoning is less than satisfactory because onerous procedures are involved in modifying the leases and fulfilling the planning conditions. The high use values of existing industrial buildings coupled with the exorbitant development costs dampen the developers’ net profits from redevelopment. The study also substantiates that the design constraints and lower residential prices in “R(E)” tend to reduce the estimated benefits that can derive from new housing developments.

Recommendations are given to improve the performance of “R(E)” zoning and promote the transformation of industrial sites for residential use. They include suggestions to refine the zoning policy, reinforce Urban Renewal Authority’s role and offer incentives in the premium assessment for redevelopment activities in designated areas.