"Luckily there is air conditioning. If not, sleeping would be impossible," said Ng Chi-hung, 55, who is unemployed and occupies one of the bottom bunks. "If you live in such environment, you have to adapt to everything."

Cheng Tin-sang, 59, occupies the bunk above, which is reached via a short metal ladder. Unable to work because of a heart condition, Cheng wanders the streets all day. "I sit in places like McDonald's," he said. "Anywhere with air conditioners will do."

Hong Kong's per-capita gross domestic product is higher than that of Italy, and not far short of those of Britain and France, according to World Bank figures. But for unskilled or semi-skilled people like Ng, the city is a tough place to be, said Wong Hung, an associate professor at the Chinese University of Hong Kong who specialises in urban poverty and employment.

Hong Kong's economy underwent a major change in the 1980s, when much of the manufacturing activity for which the city became famous in the 1950s and 60s moved across the border to the mainland. In its place came banking, insurance, trading, logistics and real estate - service sectors that now employ nearly 90 per cent of the workforce but that have been unable to absorb many less educated workers, Wong said.

At the same time, Hong Kong has some of the highest living costs in the world, a huge and growing burden on those at the bottom of the income ladder.

Ng, for example, has worked on construction sites and made deliveries. His last job, as a waiter, paid HK$7,000 to HK$8,000 a month. The monthly rent on his 15 sq ft bunk in Mong Kok is HK$1,440.

At least 170,000 people live in such dwellings in Hong Kong, according to Policy 21, a research unit tasked by the government to take stock of the situation. Such housing can be found all over the city, in units divided with plasterboard or cage-like wire mesh, carved out of apartments that once housed a family each but that have since been subdivided multiple times. This subdividing of privately owned apartments is legal as long as safety and sanitation requirements are met.

"It is quite hard to know how many there are," said Sze Lai-shan, who works for the Society for Community Organisation, a nongovernmental organisation that campaigns for social equality. "We hear about them from the people we work with - they tell us of new flats that have been subdivided or old ones that have closed down."

While tiny housing of this kind has existed in Hong Kong for many years, it has worsened as soaring property prices have pushed more and more low-income earners out of the market for regular housing in recent years.

Rent on these spaces, meanwhile, has risen nearly 20 per cent in the past four years. Such spaces now gobble up about a third of their residents' incomes, a report released by Sze's organisation showed. On a per-square-foot basis, the spaces cost at least one-third more to rent than regular apartments that are not subdivided, which average about HK$23 a square foot per month.

"It is very expensive to live [in Hong Kong] so I have to be more frugal, and I cut my food expenses," said Yuen Luen-yuk, 49, who has a low-paid job looking after the residents of a home for the elderly.

Her living space, with a ceiling too low for an adult to stand, is part of a subdivided apartment in which nine people live.