Irked legislators have criticised housing undersecretary Yau Shing-mu as "heartless" for his remarks that "subdivided flats" - widely regarded as substandard housing - should continue to exist and that some of these flats are "decently subdivided".

Yau found himself at the centre of a storm and then fuelled the controversy by telling legislators his bureau did not know the size of the "subdivided flat" problem because the government did not keep any statistics on it.

Yau's disclosure at yesterday's housing panel meeting seemed to depart from Chief Executive Leung Chun-ying's promise in his election campaign that the government would "conduct a survey of subdivided living units, caged homes and cubicle apartments ... and formulate … policies to solve the problem".

There is not a legal definition of a "subdivided flat". Commonly it is used to describe cases where one flat is partitioned into two or more self-contained cubicles.

"Despite the usually undesirably living conditions in subdivided flats, there are views in the community that there is demand for these flats," Yau told the housing panel.

"It is because these flats can provide affordable accommodation to those who are not eligible for public rental housing, or those who wish to live in the urban area closer to their workplaces or their children's schools," he said.

"It is the government's policy to secure the safety of these flats, but not to eradicate all subdivided flats," said Yau, adding that there were some "decently subdivided flats".

Unionist legislator Leung Yiu-chung expressed shock and said: "What a heartless thing to say! People do not choose to live in substandard housing. It is because they cannot afford more decent housing."

Government-friendly lawmaker Alice Mak Mei-kuen shared similar views and added: "It is ridiculous that you do not want to get rid of these flats because people need housing. The solution is simple - build more public housing."

Yau said the government was aware that the living conditions in some subdivided flats were unsatisfactory and the issue would be dealt with by the Long Term Housing Strategy Steering Committee.

This panel will be producing a report by the middle of the year on Hong Kong's long-term housing demand.