Will Hong Kong’s new subdivided flat rules help or hurt?

Key Concepts

• Subdivided Flats (劏房 – Tong Fong): Single flats divided into multiple, smaller units, a common housing type in Hong Kong due to unaffordability.
• Basic Housing Units Ordinance: New legislation passed in September 2025 setting minimum standards for subdivided flats.
• Transitional Housing: Temporary housing provided by NGOs, often used as a stopgap for those displaced by redevelopment or facing housing insecurity.
• Registration Requirement: Landlords must register subdivided flats as “basic housing units” with the government to legally lease them.
• Renovation Costs & Tenant Burden: Concerns that landlords will pass the costs of upgrading flats to meet new standards onto tenants.

Hong Kong’s Subdivided Flats: New Regulations and Their Implications

Hong Kong’s longstanding issue of subdivided flats – created by dividing single apartments into multiple smaller units – is undergoing regulatory change with the passage of a new housing bill in September 2025. These flats emerged in the 1950s and have proliferated as housing affordability declined, currently housing approximately 220,000 people within Hong Kong’s 7.5 million population. Historically, these units have been plagued by substandard living conditions, including safety hazards, pest infestations, and inadequate ventilation. A significant number lack private toilet facilities, with some even incorporating kitchens within bathrooms.

The Basic Housing Units Ordinance: Minimum Standards & Registration

The newly enacted Basic Housing Units Ordinance establishes minimum standards for subdivided flats. These standards mandate a minimum floor area of 86 square feet, a ceiling height of 2.3 meters, the presence of a proper window, and at least one toilet per unit. Landlords are required to register their subdivided flats as “basic housing units” with the government starting in March 2026, before legally leasing them. Enforcement of the ordinance is scheduled to begin in 2027. Non-compliance carries penalties of up to HK$300,000 in fines and a potential three-year jail sentence for landlords. The intent is to drive improvements in living conditions by compelling landlords to renovate properties to meet the new requirements.

Displacement & Transitional Housing: The Case of Shamo Neighborhood

The implementation of the new regulations is already causing displacement. A building in the Shamo neighborhood, constructed in 1966 and subsequently subdivided, was purchased in November 2025 by Long Cham 31 and Golden City International. Over 100 residents were subsequently evicted. While the Hong Kong Housing Bureau offered transitional housing options, residents like Mr. Chan found these units geographically inconvenient. Following media attention to the evictions, several NGOs stepped in to provide temporary housing for elderly tenants. This highlights the challenge of relocation and the potential disruption to established communities.

Landlord Perspectives & Market Response

The new regulations are not universally viewed negatively. Matthew Lao, a landlord operating approximately 600 subdivided flats, views the ordinance as a business opportunity. He showcased a 100 square foot unit in the Kun neighborhood of Chim Sacho, exceeding the minimum size requirement by 14 square feet. This unit, equipped with an induction stove, kettle, and toilet ventilation system, is rented for HK$8,500 per month – nearly 50% higher than the average price for subdivided flats in the district. He demonstrated another unit in Happy Valley, commanding a rental price 67% higher than the local average.

Concerns Regarding Affordability & Non-Registration

Despite the potential for improved conditions, concerns remain. Angela Lo of SoCO (Society for Community Organization) warns that increased rental prices could further marginalize Hong Kong’s poorest residents, pushing them further from the city center. A significant worry is that some landlords will simply choose not to register their subdivided flats as basic housing units, effectively operating illegally and avoiding the required renovations. This would perpetuate the existing substandard conditions.

The Human Cost of Change

The impact of the new regulations extends beyond economics and logistics. For residents like Mr. Chan, the changes represent a disruption to their established lives and communities. The transcript includes snippets of his speech, emphasizing the personal hardship associated with forced relocation and the loss of familiar surroundings.

Synthesis/Conclusion

The new Basic Housing Units Ordinance represents a significant attempt to address the long-standing issues surrounding Hong Kong’s subdivided flats. While the legislation aims to improve living conditions and ensure basic standards, its implementation presents challenges. The potential for increased rental costs, landlord non-compliance, and displacement of vulnerable residents raise concerns about affordability and social equity. The success of the ordinance will depend on effective enforcement, adequate support for displaced tenants, and a commitment to ensuring that the costs of renovation are not unfairly borne by those who can least afford them.