Over 200,000 Hong Kong residents—roughly the population of a small city—live in subdivided flats, single rooms carved into two, three, sometimes four or more separate units by landlords seeking to maximize rental income. Entire families cook, sleep, study, and live in spaces that often measure less than 100 square feet, smaller than many walk-in closets or prison cells. This is the paradox of one of the world's most expensive real estate markets: gleaming skyscrapers and luxury penthouses tower above some of the most cramped, precarious living conditions in the developed world.
Now, after years of neglect, these units are finally getting a tech upgrade that could reshape the daily economics of survival for tens of thousands of vulnerable tenants.
Smart Meters Enter the Chat
CLP Power, Hong Kong's primary electricity provider serving Kowloon and the New Territories, has just opened smart meter applications specifically for subdivided flats that meet the city's newly implemented living standards. The catch: only landlords whose properties comply with these regulations can apply. In other words, upgrade your property to meet basic habitability requirements, and your tenants gain access to the same metering technology the rest of Hong Kong has enjoyed for years.
Smart meters already cover 90 percent of Hong Kong's 2.7 million households, providing real-time usage data, automated billing, and integration with mobile apps that help residents track and manage their consumption. Subdivided flats? They've been systematically left out of this digital transformation—until now.
Wait, What's a Subdivided Flat?
Subdivided units, known locally as SDUs or 㓥房, emerge when landlords partition larger apartments—sometimes old industrial buildings or deteriorating tenement blocks—into smaller, separately rentable spaces. A 600-square-foot flat might become four separate "homes," each with its own lock, sometimes sharing a single toilet or kitchen. It's Hong Kong's unofficial, largely unregulated answer to housing costs that rank among the highest on Earth, where the average apartment price sits at roughly 20 times the median annual household income.
These flats are often cramped beyond imagination, poorly ventilated to the point of being stifling in summer, riddled with electrical hazards from amateur wiring, and sometimes genuinely dangerous. Fire safety concerns loom large in buildings where multiple families crowd into spaces designed for one, with narrow corridors and locked gates that could trap residents in an emergency. A 2023 survey found that the median living space per person in SDUs was just 57 square feet—roughly the size of a king-sized bed.
New government standards introduced this year now mandate minimum space requirements of at least 86 square feet per unit, proper ventilation systems, adequate fire safety measures including clear escape routes, and basic sanitation facilities. The regulations aren't perfect—critics argue the minimum space remains inhumanely small and enforcement will prove difficult—but they represent the first meaningful attempt to bring these shadow dwellings into a formal regulatory framework.
Why Smart Meters Matter Here
Smart meters sound boring, admittedly. They're small digital devices that track electricity consumption in real time and transmit data automatically to the utility company. So what?
For SDU tenants, this mundane technology represents something huge: liberation from systematic exploitation. The current system works like this: a landlord maintains a single electricity account for the entire original flat, receives one bill from CLP, then divides that bill among tenants according to whatever formula—or fiction—they choose. Many tenants share bills with landlords who charge rates that are wildly inflated, sometimes double or triple the actual per-unit cost. Some landlords simply invent numbers. Tenants pay whatever landlords demand because the alternative is homelessness. No transparency. No itemization. No recourse through official channels.
Research by the Society for Community Organization found that SDU residents often pay electricity rates 30-50% higher than standard residential customers, despite having lower overall consumption. This represents a hidden tax on poverty—a surcharge for being desperate.
Smart meters change everything. Direct CLP billing means tenants pay exactly what they use, at standard residential rates, with detailed breakdowns available through an app. No middleman taking a cut. No shady math or estimated readings that always seem to favor the landlord. Just actual consumption, measured to the kilowatt-hour, billed directly to the tenant. For families already stretching every dollar, the savings could amount to hundreds of Hong Kong dollars monthly—money that might otherwise go toward food, school supplies, or medicine.
The Catch
Only compliant flats qualify for the smart meter program, and this is where the policy's optimistic theory meets Hong Kong's stubborn reality. Landlords must renovate first—expanding units to meet minimum space requirements, installing proper ventilation, ensuring fire safety compliance, obtaining legitimate permits and inspections. The costs can run into tens of thousands of Hong Kong dollars per unit. Many landlords simply won't bother when they can continue operating in the shadows with minimal enforcement consequences. Why invest in expensive upgrades when desperate tenants with few alternatives will continue paying premium rates for substandard housing?
The government's bet is that smart meter access—and the associated cost savings for tenants—will create market pressure for compliance. Tenants will prefer compliant units; landlords will upgrade to attract them. But Hong Kong's landlords have a long history of creative workarounds when regulations threaten their income streams, from shell companies that obscure ownership to informal agreements that circumvent tenant protections. Enforcement agencies are understaffed, and the sheer number of subdivided units—estimated at over 110,000 across the city—makes comprehensive monitoring practically impossible.
This isn't just a Hong Kong problem.
Across Asia and increasingly around the world, the same brutal arithmetic plays out: rapid urbanization plus concentrated economic opportunity plus stratospheric property costs equals ordinary people squeezed into impossible, often invisible spaces.
Tokyo's geki-sema micro-apartments pack residents into rooms barely larger than a coffin, with shared bathrooms down the hall and rent that still consumes half a salary. Manila's informal settlements sprawl across flood-prone land, housing millions in structures that don't officially exist. Seoul's banjiha basements—made globally infamous by Bong Joon-ho's Oscar-winning film Parasite—trap residents underground, literally and economically, vulnerable to the flooding that killed multiple basement dwellers during record rainfall in 2022. London has its "beds in sheds"; San Francisco its converted garages; Mumbai its cage homes. Same pattern everywhere, different architectural expressions of the same failure.
Smart infrastructure typically gets framed as a luxury amenity—a feature for gleaming new developments, wealthy neighborhoods, forward-thinking cities showcasing their innovation credentials. But what about the people living in the margins, in spaces that don't appear on official maps, paying rent to landlords who prefer to remain invisible? Tech equity means nothing if it only reaches those who already have enough. The question isn't whether we can build smart cities; it's whether those cities will include everyone or simply create new forms of digital exclusion layered atop existing inequalities.
