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August 10, 2025 Hostels in the City Scheme opens for applications The Hong Kong SAR Government’s Development Bureau and Education Bureau have launched the Hostels in the City Scheme, aimed at boosting student accommodation by facilitating the conversion of commercial buildings into privately funded student hostels. Key Regulatory Streamlining
Planning Regime: The Town Planning Board has broadened the definition of “Hotel” to include eligible student hostels. Since “Hotel” is a permitted use on most commercial sites, no planning application is required for conversions under the scheme.
Building Regulations: Converted hostels will remain classified as non-domestic buildings, allowing retention of existing gross floor area (GFA). Facilities previously exempt from GFA—such as parking and loading areas—can be repurposed (e.g., gyms, study rooms) while maintaining exemption status.
Land Administration: Most commercial leases already permit student hostel use without modification or premium. Where lease modification is necessary, the Lands Department will assess premiums on a case-by-case basis.
Conversion Scope
Wholesale conversions of entire commercial buildings are encouraged.
Partial conversions are permitted under specific conditions.
Industrial buildings and sites zoned for industrial use are excluded, though commercial buildings previously converted from industrial use on non-industrial zonings may qualify if land procedures are complete.
This scheme presents a strategic opportunity for developers and building owners to repurpose underutilized commercial assets, aligning with Hong Kong’s vision to enhance its global standing in post-secondary education. Would you like help drafting a proposal or presentation based on this?
Key Benefits for Developers
1. Streamlined Planning Approval
No Town Planning Board application required for most commercial sites.
Student hostels now fall under the broadened “Hotel” use category, which is typically always permitted.
This significantly reduces approval time and administrative burden, accelerating project timelines.
2. Retention of Gross Floor Area (GFA)
Converted hostels remain classified as non-domestic buildings, so:
Existing GFA can be retained without recalculation.
Developers avoid potential GFA losses that typically occur in change-of-use scenarios.
3. Flexible Use of Ancillary Spaces
Facilities like car parks and loading bays, previously exempt from GFA, can be:
Repurposed into hostel-supporting amenities (e.g., study rooms, gyms).
Still excluded from GFA calculations, preserving development efficiency.
4. Minimal Land Lease Barriers
Most commercial leases already permit student hostel use:
No lease modification or premium payment required in most cases.
For exceptions, the Lands Department offers a clear premium assessment process.
5. Market-Driven, Self-Financed Model
No government funding required—developers retain full financial control and autonomy.
Opportunity to tap into a growing demand for student housing, especially from international students.
6. Partial Conversion Option
Developers can convert part of a building into hostel use while retaining other commercial functions, subject to conditions.
This allows for phased investment and diversified revenue streams.
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