The URA was established in May 2001 under the Urban Renewal Authority Ordinance as the statutory body to undertake, encourage, promote and facilitate urban renewal of Hong Kong, with a view to addressing the problem of urban decay and improving the living conditions of residents in old areas.

The URA follows the guidelines set out in the Government's Urban Renewal Strategy (URS) in the implementation of its urban renewal initiatives. The URS comprises redevelopment, rehabilitation, retroffiting, heritage preservation and revitalisation. Redevelopment and rehabilitation are the core businesses of the URA.