Around 11,000 subdivided units have been registered under a grace period system that will give landlords three years to ensure their properties meet new government requirements for the city’s infamous substandard housing.

Victor Tai, the under secretary for housing, said on Tuesday in a briefing session with selected media outlets that as of Tuesday, around 3,000 flats – totaling 11,000 subdivided units – had been registered, NowTV reported.

Under the Basic Housing Units Ordinance, which came into effect in March, subdivided units are required to meet government-set living standards. These include a floor space of at least 86 square feet, a ceiling height of 2.3 metres, as well as a window and an individual toilet.

Units that pass those requirements will be known as “basic housing units.”

From now until February 2027, the government is allowing landlords to apply for a three-year grace period to give them time to get their subdivided units up to standard.

Operators whose subdivided units already meet requirements have been able to apply for recognition as basic housing units since March 1. Tai said that so far, four applications have been made.

Renovations

The Housing Bureau said it had converted two subdivided units in Kowloon City into examples of basic housing units to guide subdivided unit operators on how to upgrade their flats.

Tai said the fee for renovating a substandard shoebox unit to meet requirements ranges from HK$25,000 to HK$50,000, while the cost for renovating an entire flat comprising several subdivided units is between HK$140,000 and HK$160,000, according to the Housing Bureau.

He said that for a three-unit model flat, the work involved removing the toilet of one of the units so that the space for another unit could be expanded, and then re-installing a new toilet.

In addition, installed toilet exhaust fans and routing drainage pipes to the outdoors were also fitted.

When asked by local media whether operators of subdivided units might transfer such costs to tenants, therefore increasing their rent, Tai said that would be up to the landlords.

The official said that just like with running any business, there are costs involved in operating subdivided units, but that he believed landlords could earn back those costs within a few months of converting the homes into basic housing units.

Subdivided unit operators are required to hire a registered surveyor or architect to certify that the flats meet the government’s requirements.

Earlier in March, the Hong Kong Institute of Surveyors estimated that operators will have to spend at least HK$15,000 to have a flat with up to four subdivided units certified.

The Hong Kong government has proposed allocating up to 180 “reserve units” of transitional housing to tenants evicted due to the “shoebox” flat reform.

Victor Tai, undersecretary for housing, said on Monday that the reserve units would only be provided under “very exceptional circumstances,” such as tenants evicted by landlords of subdivided flats and those in urgent need of housing.

The reserve units will only come from transitional housing projects in urban or “extended urban” areas, such as Tung Chung, Sha Tin and Tseung Kwan O, according to a policy briefing submitted by the Housing Bureau to the Legislative Council’s (LegCo) panel on housing.

Speaking at the panel, Tai said the units would only be reserved for three months. If the units were not allocated to anyone, they would become available again for other transitional housing applicants.

“Our aim is to have some reserve units in urban and extended urban areas ready for providing immediate support,” Tai said in Cantonese.

Elaine Chik, a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), raised concern that the 180 reserve units may fail to meet demand.

In response, Tai said many current tenants of subdivided units were themselves applicants for public or transitional housing, and that the amount of reserve units should be enough for those in urgent need of temporary shelter.

According to the briefing paper, those who wish to move into the reserve units must undergo a review by one of the six government-appointed District Service Teams “to verify their imminent housing needs.”

Another Housing Bureau team will review the applications before allocating the units for a three-month tenancy.

The policy is expected to come into force next month.

Hong Kong passed the Basic Housing Units Ordinance in September, mandating landlords of subdivided units to meet government-set living standards. These include a floor space of at least 86 square feet, a ceiling height of 2.3 metres, as well as windows and an individual toilet.

The law, which came into effect in March, also requires landlords to register their units if they want to continue leasing them legally.

Authorities estimate that more than 220,000 people in the city live in “shoebox” flats, around one-third of which need major renovation.

According to the Housing Bureau, as of April 2026, there were 19,100 transitional housing units operated by NGOs and subsidised by the government.