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Professor Bo-sin Tang, and Dr Winky K.O. Ho, Department of Urban Planning and Design, The University of Hong Kong
Land-use Planning and Market Adjustment Under De-industrialization: Restructuring of Industrial Space in Hong Kong
About the research
The trend of deindustrialization in many countries over the past three to four decades has left many modern cities with a considerable amount of obsolete industrial premises. How to make a better use of such space to facilitate the economic shift from manufacturing to a service-based economy has been a major question for both planners and the development industry.
Hong Kong, where there is obviously a great pressure on the use of space, has managed to transform itself from an export-oriented manufacturing city into an international business and financial metropolis. However, most previous research has focused on office property rather than industrial property. This research uses sophisticated modelling techniques as well as data to examine how market forces in Hong Kong have reacted to the economic opportunity arising from the land-use conversion of existing industrial premises, and how planning regulations may have helped or hindered this.
The industrial sector in Hong Kong has been extremely proactive in converting industrial premises into non-industrial and higher-value business uses. But the research reveals that, under the city's liberal and flexible planning policy, the development market has actually produced more rather than less industrial accommodation compared to the development of new office accommodation. Part of the reason for this seems to be that relaxations in the permissible land-use rights of property owners in using these types of premises had the effect of increasing the size of the market, and also that developers have shifted the 'burden' of securing land-use change of these premises to the final users or owners of the spaces. This also illustrates that the relationship between industrial and office sectors in a deindustrializing urban environment is more complicated than is often assumed.
"While the planning regulations must have clear demarcations of the land-use rights and precise definitions of what are allowable or not in a specific accommodation, it is the market that ultimately determines what uses are feasible or not on particular space."
This research is available here from the journal Land Use Policy, published by Elsevier. Our thanks to the journal and publishers for making this article free-to-access.
Implications for policy and practice
This research suggests that incremental land-use changes instigated by market forces and supported by flexible planning regulatory mechanism appear to be far more effective than a blanket rezoning policy in transforming industrial space into other uses. This is because developers can react much faster to market forces than can planning policy.
"An in-depth and illuminating study of fast-moving property markets in the one of the world's most dynamic cities."