Economic impact of urban renewal projects on local communities in Hong Kong

Abstract

Urban renewal has been a major component of Hong Kong's development strategy, aiming to modernize ageing urban districts and stimulate economic growth. While large-scale projects have been widely studied, single-block urban renewal's localized economic and social effects remain underexplored. This dissertation critically examines the economic impacts of two single-block redevelopment projects—Lee Tung Street in Wan Chai and Skypark in Mongkok—focusing on changes to property values, small business viability, and community cohesion. A mixed-methods approach is adopted, the study integrates quantitative data such as including property price trends and demographic shifts with qualitative interviews with residents and business owners. Single-block renewal projects increase property values and commercial attractiveness, accelerate gentrification, displace long-standing residents and businesses, and erode traditional community networks. Although physical infrastructure and investment appeal improved, these benefits were not equitably distributed, disproportionately favouring developers and higher-income newcomers. The case studies show that while urban renewal can revitalize urban environments, it often leads to the loss of affordable housing, the disappearance of grassroots businesses, and the weakening of social ties. Original residents and business owners could not return post-renewal due to soaring costs, transforming formerly working-class neighbourhoods into spaces oriented toward affluent demographics. It highlight how state-led gentrification, inadequate community engagement, and focus on real estate profitability overshadow social sustainability concerns. The dissertation concludes that future single-block renewal projects should balance economic development with social equity. Only by addressing economic and community outcomes can Hong Kong's urban renewal efforts promote truly inclusive and sustainable urban transformation.