Chinese President Xi Jinping has ordered the wealthy finance hub to resolve housing woes that are the result of decades of pervasive inequality, an acute housing shortage and eye-watering rents.

More than 220,000 households in the city of 7.5 million live in subdivided flats, cubicles that can be as tiny as 50 square feet or even less, with shared bathrooms and showers inside ageing walk-up buildings.

The city formally published a law on Friday that will set up a registration system for subdivided units starting on March 1, 2026, and will ban flats smaller than eight square metres (86 square feet).

Each "basic housing unit" must meet safety and hygiene standards, such as having at least one openable window, a sink and its own toilet in an enclosed space.

Authorities estimate that around one-third of Hong Kong's current subdivided flats are substandard and need renovation.

Landlords who register under the system will have until 2030 to ensure that their flats comply with the new rules.

Enforcement is set to begin in 2027 and landlords who break the law could be fined up to HK$300,000 ($38,600) and jailed for three years.

Grassroots welfare groups have voiced fears that landlords will pass renovation costs on to tenants, potentially evicting low-income households that cannot meet higher rents.

Hong Kong's housing chief said last week that there will be no "significant increase" in rents in subdivided housing units, adding that the public housing supply will rise in the coming years.