There is not much to indicate that the rundown shophouse on Shanghai Street, Mong Kok, houses anything but a pawn shop. On the third floor, however, is Tong Saam, an unmarked space that has positioned itself on Hong Kong's creative vanguard. Since it was opened earlier this year by three friends interested in music and art, it has hosted film screenings and performances by underground folk singers such a Beijing's Zhao Yiran. 'Normally, you'd only be able to find this kind of space in an industrial area,' says one of Tong Saam's founders, Charlie Wong Liang-yih, a freelance designer. 'It's the perfect size and even has a balcony. Being in Mong Kok makes it even more special because it's so central and we're part of a real neighbourhood. Places like the Cattle Depot [Artists' Village in To Kwa Wan] are like warehouses for artists. This is more like a community space.' For all its ambitions, though, Tong Saam might soon be redeveloped. Shortly after they moved in, Wong and his partners heard rumours that the Urban Renewal Authority was planning a new project on the street. Even if that did not turn out to be the case, it was likely that other URA projects in the area would drive up prices and encourage owners to sell their properties to developers, he said. 'We're surrounded by redevelopment projects,' Wong said. Tong Saam is not the only new venture to open in a neighbourhood targeted for redevelopment. In Central, small businesses, art galleries and creative spaces are opening on the fringes of URA redevelopments in Graham Street and Staunton Street, leading some to question the way the government and the URA approach the revitalisation of old neighbourhoods. In Graham Street, next to a controversial redevelopment that will see most of a century-old street market replaced by office towers and a hotel, an art gallery and several new cafes have opened in the past year. 'The whole street has changed since we opened last summer,' said Tracie Ang, the owner of Berrygood, a frozen yogurt shop that sits just outside the URA's redevelopment zone. 'There are lots of new cafes and shops. Foot traffic has increased.' Next door, UFO Gallery specialises in 'low-brow' pop art. It opened last April. 'We want to show something different from the other galleries on Hollywood Road, so this is a good place to be,' said manager Kate Tai. 'Being in the street market makes us very accessible. People can just wander in when passing by.' Nearby, on a quiet lane near the URA's planned redevelopment of Staunton Street and the Bridges Street Market, the finishing touches are being put on Fungus Workshop, a design space that will open later this month. 'This place is quiet and it has an open area that we can use in front, and the rent is much cheaper than further down on Staunton Street or Hollywood Road,' said Philip Lau, one of the space's owners. 'We hope they can keep these old buildings around here. They're short and they don't block the sun, and we'd like to see some space for design exhibitions or galleries. If they could be reused for creative media, it would be great.' While the URA's mandate is to improve living conditions in dilapidated areas, it is mostly a vehicle for property development, said Dr Li Ling-hin, an associate professor of real estate and construction at the University of Hong Kong. As it took up properties to redevelop, it needed to maximise their potential profit, which often meant replacing inexpensive low-rise properties with high-rise, high-end buildings. 'It's a question of money,' Li said. 'If there is no extra value from the site, who is going to pay the bill to rehabilitate it? People who are living there might be unable or unwilling to do it. Unless the government can point to some value, like architectural value or historical value, there's no incentive to restore it and it will be demolished. If we as a society decide it's worth paying for preservation and reuse, it's something we can do. Otherwise, under the current system, redevelopment is inevitable.' In cases where private owners can independently improve their properties, however, Li said the URA ought to reconsider its approach. 'If its reason for moving into an area is to beautify it and improve its living situation, and that has already been done by private owners, it should withdraw.' Many of the older projects initiated by the URA and its predecessor, the Land Development Corporation, involved the demolition of low-rise, mixed-use blocks for malls, hotels and office buildings. More recent projects, by contrast, pay more attention to historic preservation and the adaptive reuse of existing buildings. The Graham Street project is slated to include the restoration of a century-old grocery store and a so-called Old Shop Street of low-rise buildings. In Mong Kok, the URA will preserve and restore rows of pre-war shophouses on Shanghai Street and Prince Edward Road, with space leased to businesses that provide 'daily necessities', according to URA spokesman Jimmy Sha. 'We strive to preserve and restore buildings, sites and structures of historical, cultural or architectural values, and to keep the local colour of the community and the historical characteristics of different districts,' he said. 'As far as practicable, the preserved heritage buildings would be put to proper community, public or other beneficial adaptive reuse.' Sha said that no project had been announced for the block around Tong Saam, and declined to speculate on future projects in the area. The URA's efforts at preserving and reusing existing buildings have received mixed reviews. 'I don't have high hopes for its latest projects,' said Peter Li Siu-man, campaign manager at the Conservancy Association. 'Conservation comes in two parts. One is to preserve buildings, and the URA has done a pretty good job of doing that, but the other part is to make them useful to the community. Look at the old pawnshops in Wan Chai that were turned into The Pawn - it turned something that was very down-to-earth, to which the man in the street had an emotional attachment, into something very high class that only appeals to rich people. That's not what we call revitalisation.' The problem, according to Li and other critics, is that the URA's projects replace a diverse mix of affordable buildings with higher-rent, centrally managed space. Areas surrounding URA redevelopments see a rise in property values that puts pressure on the small buildings that act as incubators for small businesses and creative spaces like Tong Saam. 'The URA argues that it's demolishing slums and providing community services, but all it's doing is maximising underutilised air space,' said John Batten, a founding member of the Central and Western Concern Group, which serves as a watchdog for urban development. 'It's putting in 30-storey buildings where there are buildings no more than 10 storeys. The debate hasn't moved very far in terms of holistic urban planning.' Both Peter Li and Li Ling-hin suggest alternatives to urban renewal. One is more stringent conservation laws that would make it harder to demolish or redevelop buildings. Another is to transfer development pressure away from sensitive areas by allowing building owners to sell the development potential of their property to developers who can then add the extra density or height to projects in other parts of town. 'If we have a transfer-of-development-rights programme in place, then maybe we could just sell a site with the condition that it remains as it is, and the URA wouldn't have to get involved,' Li Ling-hin said. At Tong Saam, meanwhile, Wong and his partners, illustrator Kou Chin-ngai and clerk Lam Chin-to, plan to continue hosting regular events, even with the knowledge that their space may one day disappear. 'Creativity can't be boxed in, it must be allowed to flow, and you need this kind of space for creativity to blossom,' Kou said. 'Not everything can be planned. If this place goes, all of this energy will be lost. You can't replace something like this.'