“We are not just talking about upper-class, high-class art,” Tanya Chan, a legislator from Hong Kong’s pro-democracy Civic Party, said of the music at Hidden Agenda and other quasi-underground venues in the city’s industrial neighborhoods.

“I don’t see why ordinary citizens or music lovers can’t have their own place to play music,” she added. “If no such choices exist in our city, that’s a pity.”

Hong Kong has fewer than 13 small-scale live houses, mainly in industrial buildings, and seven others, including Hidden Agenda, that would be considered midsize or large, said Adrian Chow, a composer and producer who supervises the music group at the Hong Kong Arts Development Council, a government-funded advisory body.

Many of those venues would struggle to survive even without onerous regulations because the property market is among the world’s most expensive. What’s more, a recent industrial “revitalization” program gave landlords financial incentives to convert industrial buildings into offices, but it also drove up the value of such space in districts like East Kowloon, a popular area for live houses.

Industrial rents in East Kowloon climbed to $1.77 a square foot in 2015, from $1.05 a square foot five years earlier, a 68 percent increase, according to data provided by Savills, a property consulting firm. The rents there — Mr. Hui said he pays about $7,700 a month for his venue in East Kowloon — are still a small fraction of what club owners would pay in commercial districts. But that does not make them more affordable.