The Shekkipmei fire of December 25, 1953, was the moment when Hong Kong realised there was a housing crisis.

From 1945 to 1953 - with postwar optimism followed by post-communist pessimism - the population had soared. Vast settlements of wood, cardboard and canvas appeared on hillsides. At night the streets were filled with shanties that were pulled up during the day. Landlords selling tiny bunk spaces flourished. Something had to be done.

On a small scale things were already being done.

As early as 1948, the Housing Society had been set in motion by the controversial and charismatic Anglican Bishop Ronald Owen Hall who had been influenced by the work of female social reformers in British slums.

He was joined by Sir Douglas Clague - a war hero who had escaped to China from Stanley internment camp just after the surrender in late 1941 - and Dorothy Hawker who began a long tradition of women in management positions in the society.

They built their first estate at Sheung Li Uk in 1952, with the help of private donations and massive enthusiasm. But until the Government started giving them serious money their vision had to be a limited one.

That fire at Shekkipmei was not the only impetus for the Governor's accountants to delve into the public coffers. In 1954 there were five more huge squatter fires and several small ones, making 42,000 more people homeless. By the end of the year, one person in 20 had lost their home in a squatter fire over the previous 12 months.

The squatter problem had been transformed from what the 1954 Annual Report called 'a stubborn and apparently endemic evil' into an emergency of the first order.

Civil servants quickly became involved in 'the novel and interesting experiment of constructing vast housing estates in which some of the poorest inhabitants, many of whom had in the past barely felt the impact of the administration, became tenants of the Government'.

Emergency accommodation for 54,000 people was built within months, with new occupants charged $10 per room per month, plus $1 for water.

Planners proposed big new industrial centres at Tsuen Wan and Kwun Tong, noting that 'if the population continues to increase it may be necessary to build a new settlement in the beautiful and fertile valley of Sha Tin'.

Compassion was not the sole motivation.

As the commissioner for resettlement put it, 'squatters are not resettled simply because they need . . . or deserve, hygienic and fireproof houses; they are resettled because the community can no longer afford to carry the fire risk, health risk and threat to public order and prestige which the squatter areas represent and because the community needs the land of which they are in illegal occupation. And the land is needed quickly'.

The emergency estates were grim. Denis Bray, who became the Home Affairs Secretary, described one public flat as 'a concrete box allowing 24 sq ft a head, in a seven-storey structure with no lifts, no windows but wooden shutters, no water but access to communal kitchens and bathrooms. If this sounds dreadful, it was'.

In 1954 the Housing Authority was formed, with a $50 million loan and the aim of providing better houses for people in the low- to middle-income bracket.

The largest public housing policy in the capitalist world had begun.

In those early high-rise days the twinkling lights of Hong Kong's multi-storey blocks might have made the territory seem an impressive example of modern living.

But behind the concrete facades, life was still almost as tough and malodorous as ever.

Toilets were shared by up to 36 people and these often had no doors. Not until 1972 did government architects give families their own cooking and washing areas. By then all new estates had recreation facilities.

One tenant complained to the Housing Society that the new basketball courts were a mistake - they prevented his children from studying and the exercise made them eat more rice.

Today, just over 50 per cent of Hong Kong's 6.6 million people live in permanent public housing. The rubbish collectors and postmen might despair, but the police generally have an easy time. The crime rates are much lower than in any other public estates in the world.

But there is still a housing problem.

In 1998, about 140,000 people were living in temporary housing, including the infamous 'cagehomes' in which occupants have just a grubby bunk to call their own.

According to Community Organiser at the Society for Community Organisations Iman Fok Tin-man, last year's Bedspace Apartment Ordinance has made situations worse rather than better. Cage lodgers now face eviction because landlords do not want to pay for improvements.

In her long list of housing issues, Ms Fok cited the waiting lists for public rental housing. Families face up to a seven-year wait, while it can take up to nine years for single people to get a permanent address.

She drew attention to severe overcrowding by telling the story of a family of seven whom she visited. They all lived in a 120 sq ft flat and each child had a tiny bunk space, where they would eat and do their homework.

Ms Fok blamed outdated tenancy rules for not taking into account the complexity of some family situations.

Spouses and children under 18 can be added to a tenancy. But if the children grow up, get married and stay in the family home, the name of their young wife or husband cannot be added. Mainland wives and girlfriends are another complication.

'There are thousands of hidden tenants all over Hong Kong,' Ms Fok said.

Until the rules are changed and people are able to register their whole family without fear of bureaucratic reprisals, the problem of illegal overcrowding will remain.

And the fire risk will grow.