Analysing the practicality and impact of the transfer of plot ratio mechanism in the Yau Mai Tei & Mong Kok area for urban regeneration and potentially expanding its use

Abstract

Urban decay is a perennial problem across Hong Kong, especially in the Yau Ma Tei and Mong Kok areas (YM). The YM area is currently experiencing challenges including slow redevelopment pace, diminishing redevelopment potential, and lack of restructuring opportunities (URA, 2023). The Town Planning Board published the Guidelines for Transfer of Plot Ratio (TPR) Scheme (in YM area only) to address the dilapidation of buildings in the YM area, especially buildings with lower redevelopment potential. The scheme permits developers to transfer plot ratios from Sending Site to Receiving Site within the same Outline Zoning Plan for up to 30% of the maximum Gross Floor Area of the Receiving Site. Similar to TPR in New York, Taiwan, Singapore and Floor Area Ratio (FAR) bank in Japan, this scheme acts as a form of the Transfer of Development Rights (TDR) in Hong Kong. This urban redevelopment tool serves as a vital driver to expedite the redevelopment process of the district, provide more GIC, and reduce traffic congestion. This objective of the study is to assess the viability of the TPR scheme in Hong Kong to assist private developers and other stakeholders in utilising this tool to maximise redevelopment potential, expedite the redevelopment process of the YM area, and potentially extend the scheme to other districts in Hong Kong. The measures also be explored to fully utilize the TDR scheme in the future Hong Kong. The methodology employed in this study comprises of conducting literature reviews on TDR and TPR schemes implemented abroad and relevant studies. Additionally, a series of hypothetical feasibility studies are conducted to assess the viability of the scheme under various situations to discuss alternative redevelopment destinies, particularly in the current context of YM area. Furthermore, it examines the potential impacts and effectiveness of the scheme in order to provide measures to improve the application for major stakeholders. Measures will be proposed in order to improve the current practice of the TPR scheme after the empirical result. The preliminary findings show that the implementation of TPR in Hong Kong is at an exploratory stage. Overseas examples like as Taiwan's TDR focus on decentralisation and collaboration between residents and developers. In this model, the Taipei city government primarily acts as a facilitator and regulator. Hong Kong TPR for private development prioritises market-driven initiatives, with the Hong Kong URA is responsible for planning and financing redevelopment. The development period is prolonged from the usual 3 years of development period to 7 years due to the complexity of the application procedures of the Town Planning Board, lease modification application, and approval of the General Building Plan. The TPR scheme will only be lucrative in extremely uncommon circumstances. As private developers are expected to be absent in the urban renewal process due lack of financial incentives, URA will bear the essential burden of the urban renewal process in the district. The primary drawbacks of the TPR scheme are the impact of time, elevated interest rates, uncertainties regarding the Land Premium at the Full Market Value on lease modification and the uncertainty and additional risks for adopting TPR. In order to effectively reduce the long initial development period and the uncertainties of lease modification, this study has proposed a number of measures to improve the adaptiveness for private developers and policymakers. This study also studies the extension to external districts, which includes receiving the transfer GFA in Kai Tak and New Development Aeras. Despite the highly beneficial social gain and planning aspects, transferring to other districts as a receiving district yields similar results to the current YM TPR scheme of intra transfer GFA. Nevertheless, TPR can potentially provide alternative options for developers in the innovative usage of land with the view to accelerating the urban redevelopment process.