Street food at Mong Kok night market. Photo: Flixkr / Chika Watanabe. CC: 2.0.

It is supposed to be good news when the Michelin Guide's 2016 edition says a new category of good, affordable street food has come to Hong Kong and Macau. But the Michelin Star has turned out to be the kiss of death for several small restaurants in Hong Kong, as landlords move to raise rents, wanting to profit off their tenants’ anticipated earnings boom.

A sudden and sharp hike in the rent is what forced Kai Kai Dessert, one of the street food eateries recommended by Michelin, to relocate. The dessert restaurant's landlord abruptly raised the rent 120 percent, asking for HK $220,000 (US $28,385) a month and a two-year lease agreement. Kai Kai Dessert had been operating in the same district for 40 years.

Kai Kai Dessert. Image from Apple Daily.

Kai Kai Dessert's owner, Mr. Chiu, inherited the family business from his father. He says they have to sell 11,578 desserts every month just to pay the rent.

Chiu says reasonable prices are what have allowed his business to serve people from all walks of life. He doesn't want to raise his prices, as most of his customers are locals from the neighborhood.

Fortunately, after Kai Kai Dessert posted a notice that it was being forced from its location, an old customer offered Mr. Chiu a smaller space at another ground-floor shop at the “friendly” rate of HK $90,000 (US $11,600) a month.

When it comes to the rental market, Kai Kai Dessert is no exception. A number of other Michelin-recommended restaurants in Hong Kong have been forced from their original neighborhoods because of the “profit-squeezing” practice of property investment in Hong Kong, where there are no laws on rent control. This means that many landlords (particularly those who rent to ground-floor shops) seek to squeeze businesses for extra profits.

In a letter to Stand News, an independent media outlet, “Summer Water” called the Michelin Star a curse:

米芝蓮獎與本地高租金產生了最壞的化學反應，租金如像割草機，食肆幼苗好不容易才熬起點名氣與成績，長成嫰綠小草，可機器卻無情輾過把草的頭去掉。算算看，從做點心的「添好運」、賣滷味的「阿鴻小吃」到賣竹升麵的「好旺角」，《米芝蓮》這外國勢力真「好事多磨」。

The Michelin recommendation has generated a worst chemical effect because of the local rental market. The rent here is like a harvest machine. The restaurants work so hard to build its reputation. They are like the sprouts, but the harvest machine cuts the sprouts right away. Thus far, the dim sum shop “Tim Ho Wan”, “Hung's Delicacies” and “Good Hope Noodle” [all were forced out of their original locations], the foreign force of Michelin brought them misfortune.

Not everyone is blaming Michelin, of course. According to Stand News columnist “Yat Ming King Yan”, it's the landlords and their pursuit of easy money that's the root of the problem:

一個人出了名，很容易招來麻煩；一隻豬肥了，就會優先被宰。
同樣地，一間餐廳嬴得了「米芝蓮推介」這個美譽，其業主得悉後定必雙眼發光，繼而理直氣壯地加租，認為這個富麗堂皇的頭銜能夠讓餐廳的老闆豬籠入水，是業主眼中不折不扣的「肥豬」。結果，這間餐廳的下場跟上述肥豬的下場一樣，被宰了。

Reputation brings trouble: a fat pig will be more likely to be slaughtered. When a restaurant makes its way to Michelin, the landlord will be alerted and raise the rent without any hesitation because he anticipates that the star will generate huge profits for the restaurant and hence a “fat pig” in the eyes of the landlord. Hence, like a “fat pig”, the restaurant will be slaughtered.

Others online have noted that profit-squeezing practices are transforming Hong Kong's landscape, as more and more small shops with local clientele are forced out of business or out of their neighborhoods, due to impossibly high rents. Facebook user Wong Sai Kei comments:

這就是令香港愈來愈少特色商店的原因
這種惡性循環
慢慢就只有大商家
香港只能下名牌集中地
卻可惜的是要名牌的
好多地方都可以代替香港
結果香港就外表光鮮卻一文不值

This is the reason why small shops with local character are vanishing. It results in a vicious circle and only big [global] chain stores that sell luxurious items will be left behind. But one can find these luxurious items in all other places. In the end, the city has a good outlook but it is losing its substance.