The Hong Kong government launched the factory Revitalisation policy in 2010 and announced to suspended it in 2016. Four years passed, only 7% of more than 1400 Hong Kong industrial buildings was converted or redeveloped, yet small enterprises and artist workers resided inside factory units are chased away.

Walking along the bustling streets in Kwun Tong factory zone, you may be amazed by the scene here. While business buildings with shinny wall and modern statues are placed in between some gloomy deserted factories or old buildings, workers and trucks are traveling in between businessmen and office staffs in the narrow streets.

Kwun Tong was planned as industrial area in 1954. The district contributed 18% to Hong Kong’s industrial output in 1980s. Since economic restructuring, many factories were deserted since then.

Ten years ago, Kwun Tong, where 40% of Hong Kong factories located, felt like a silence uninhabited district.

Since economic restructuring in the 80s, the industrial sectors relocated all the production lines to China and industrial building became vacant. Ex Chief Executive Mr Donald Tsang first introduced the concept of converting or redeveloping industrial buildings in 2009 Policy Address, aiming to optimise land use and facilitate the development of the six industries, which includes: education services, medical services, testing and certification services, environmental industries, innovation and technology, and cultural and creative industries.

The policy was then implemented in April 2010, providing incentives like free settlement of land premium for whole sale conversion factories and allowing payment of additional premium exceeding $20 million by instalments over five years at a fixed interest rate for redevelopment factories.

Until the end of October 2014, 101 industrial building’s applications for revitalisation among the 142 applications was approved, only 69 of them were successfully executed.

Kwun Tong District Councilor Nelson Chan Wah-yu said 7% was not a small number. “The outcome is not bad. The facilities and design of the factory zone were not tailored made for business use. Streets there are narrow, freight lifts were installed. Some industrial companies are still operating regardless of the changes in the surroundings. The transformation of factory zone will take quite a long time, but lots of tertiary businesses has stationed inside and the district has become much more busier.”

He said the policy has activated the development in Kwun Tong, but it was also unfair to some people because the rental cost soared high since 2010.

According to the latest property market statistics provided by the Rating and Valuation Department, the rental cost of flatted factories goes up 35% and the selling price has increased 1.21 times, comparing to the data in 2010 .

“The revitalization policy has only favored those developers instead of small and medium businesses or artists.” Said Yuen Yan, spoke person of Living in Kwun Tong, an association that keeps track of the development in Kwun Tong.

“In 2009, the government said they would support the cultural and creativity industry located inside the factories by the implementation of the revitalization policy, since their existence was breaking the zoning plan and the fire services ordinance. Five years passed, the problems have yet to be solved and these small parties were chased away by the high rent. The government should fulfill their promises before they suspend the policy.”

Yuen Yan suggested the government to set rent control over the rental cost in order to save the small businesses and organizations that have been living inside factories.

But legislative councilor Tony Tse Wai-chuen was strongly against the rental control. “ We should not try to suppress the rental or the price of the industrial unit since Hong Kong’s economy is based on the free market that determined by the factor of supply and demand. What the government have to do is to assist those small and medium enterprises and artists who need space at a relatively affordable rental.” Tony Tsa said it’s time for the government to review the current policy since the introduction of the new policy has already raised the occupancy of industrial buildings.

The policy has been implemented for four years, but it didn’t achieve the government’s expectations to create huge momentum to change the industrial area as a result to provide more office building or hotel accommodation, but altered the price of the rent.

Legislator Wu Chi Wai said the policy failed. “When we try to push up the measures, there can be a lot of unintended consequences. And in fact the revitalization policy is falling in that kind of category.” He hoped the policy should be suspended as soon as possible. “I don’t like that kind of policy, because it don’t help at all.”

Wu explained that if the building itself is owned by single landlord, they can do the change of land status at all time in their own wishes. But if the flats are occupied by divided owners, then the policy itself will trigger the market merger, owners will rise the rental and driven away tenants. They may not be able to gain a lot at the end since there are so many divided owners, but their expectations towards the policy has changed everything.

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Cases

[ tf vs js]

A restaurant and band room inside factory

“One day in November, 2013, we suddenly received a lawyer’s letter which requested us to move in a month.” Said Thomas Lam, trumpeter of independent band tf vs js which located in a Kwun Tong 1000 sq ft factory unit that cost around 10 thousand dollars a month. “Even if we were willing to increase the rent and request to stay behind, the owner of the unit said ‘you can never afford the price that I want.’”Besides playing musics, his band also sold drums to make money.

After receiving the letter, they moved to a 4000sq ft units in Ngau Tau Kok districts, where the rent was still relatively low. They are now running a restaurant and a band room at the same time in order to afford the rental cost. “I hope the rent will not goes too high in the future because more affordable rental cost allows more people to startup business.”