HONG KONG—Mass transit has long spurred real-estate development. In this mountainous city, escalators are boosting some sleepy neighborhoods.

Hong Kong already is home to the world's longest outdoor covered escalator system: the 20-year-old Central-Mid-levels escalator. The moving walkway, which rises some 120 vertical meters in a bit less than a kilometer, turned a steep slope into a vibrant shopping and entertainment district.

Now,...