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Under the terms of the lease which Britain signed to gain control of the New Territories in 1898, it was agreed that Chinese traditions and customs must be observed. As a result, indigenous male villagers aged over 18 years and descended through the male line from a resident in 1898 were entitled to build a three-storey house with a total floor space of 2,100 square feet on a plot of land in the New Territories. The houses did not require building approval from the Building Department, and could be built within the environs of a recognised village or within a village expansion area. The small-house policy was formalised in 1972 when the government hoped to use it to address housing needs in the area.
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