Convert more industrial buildings into housing estates

Ko Tin-yau July 19, 2016 18:07

The Hong Kong government has launched a crackdown on illegal premises in industrial buildings.

Some units in these buildings are being used as cafes, clubhouses, restaurants, mini-warehouses, and even as homes.

It is estimated that around 10,000 families are living in subdivided flats in these buildings. They may be forced to move out.

The government has done the right thing as the use of industrial buildings for illegal purposes could raise safety issues.

However, the government crackdown has come too late.

Observers note that the government never took any action until two fires hit industrial buildings over the past month.

In the Kowloon Bay blaze, two firefighters were killed and several others were injured.

In the first phase of its action, the government has focused on unauthorized activities in six industrial blocks.

The six targeted buildings include Shield Industrial Centre in Tsuen Wan, where TVB actor Moses Chan Ho’s coffee shop is located.

The illegal use of factory buildings is but a manifestation of the longstanding issues festering the city's property market.

Small businesses and low-income families are forced to move into these buildings because of the exorbitantly high rents for shops, offices and apartments.

As a result, the crackdown may force them to move out, and push up rents even higher.

Some even say that the authorities have turned a blind eye to these unauthorized premises over the years because they fear that a crackdown could only fuel the red-hot property market.

Most of those living in subdivided apartments in these industrial buildings are low-income families who can't afford the rents of private flats.

They have been waiting for years to secure public housing units. With the crackdown on unauthorized premises, they will be forced to move out of industrial buildings but the government cannot provide them with decent housing.

In fact, industrial buildings can be transformed into residential units.

For example, the Chai Wan Factory Estate building in Chai Wan, which was built in 1959, was recently converted into a public rental housing called Wah Ha Estate.

Completed last year, the redevelopment project is expected to house about 200 families.

It’s a good example of how old factory buildings can be transformed into residential housing units that meet fire safety and sanitation standards.

If the government could replicate what it has done at Wah Ha Estate in more industrial buildings in the city, that would help increase the housing supply in the short term.

Such a bold move may affect the interests of various stakeholders, and will require coordination among different government departments.

This article appeared in the Hong Kong Economic Journal on July 19.

Translation by Julie Zhu

[Chinese version 中文版]

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Ko Tin-yau

Hong Kong Economic Journal columnist