Speaking on an RTHK radio programme, Permanent Secretary for Development (Planning and Lands) Doris Ho said that the private sector has historically generated about four-fifths of new residential units from redevelopment projects, while the URA accounted for only the remaining one-fifth.
“If we really want to speed up urban renewal, we should think of ways to encourage the market to do more in this area,” she said.
Her remarks come on the heels of the government’s earlier announcement of the Bonus Plot Ratio Pilot Scheme, which is set to take effect in September.
Under that initiative, developers seeking to demolish and rebuild ageing residential buildings in seven designated old districts can tap into an additional 20 percent premium-free gross floor area bonus – a sweetener designed to tip marginal projects into profitability.
Ho expressed strong optimism that the 20-percent bonus would act as a powerful catalyst.
Citing the URA’s own internal analysis, she noted that in densely built areas such as Mong Kok and Yau Ma Tei, a staggering 90 percent of potential redevelopment projects are financially unattractive to developers without such a boost.
“We hope that by adding this 20 percent premium-free gross floor area bonus, we can turn some previously unviable private redevelopment projects into viable ones, thereby making the market more dynamic in redevelopment,” she said.
“We don’t think it will make every project viable, but we hope to help as many as possible. And from our discussions with market stakeholders, they feel that the 20 percent level is appropriate and at least creates enough interest for the market to push forward redevelopment projects in old districts.”
One of the scheme’s standout features, Ho highlighted, is its built-in flexibility.
Developers will have the option to either apply the bonus directly on-site or convert the additional plot ratio into cash-equivalent value.
This could mean using it to offset land premiums for land exchanges within the Northern Metropolis, or to reduce premiums when bidding for government sites.
The authorities have pledged to review the scheme’s performance within one to two years.