The new batches will be the third and fourth projects rolled out since 2016 under the Green Form Subsidised Home Ownership Scheme (GSH), one of three programmes that provide homes for sale at knockdown prices. The scheme sells government-built flats exclusively to public housing tenants and applicants.

Subsidised homes often divert land away from public rental housing. An authority spokesman on Wednesday said the GSH would be implemented at a more modest pace to lower the impact on waiting times, as it takes time to renovate the vacated flats and allocate them to those in the queue.

Families have been on hold for a flat for an average of more than five and a half years.

The spokesman also said the authority wanted to test the market response.

“In line with this incremental approach and in light of the positive response, our strategic planning committee decided to convert these two [public rental housing] developments for use by the GSH,” the spokesman said.

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The Chai Wan project will provide flats ranging from 152 to 256 sq ft in one 36-storey tower. It will include an elderly care centre, children’s play areas and shops.

The Tsing Yi development will offer flats between 153 and 389 sq ft in two 40-storey buildings. This project will include a two-storey retail complex, an elderly care centre, childcare facility, kindergarten and support service centre for people with severe physical disabilities.

Flat sizes of 152 sq ft are the authority's smallest sized homes, designed for one to two people. According to the authority's guidelines, each tenant is required to have at least 75 sq ft of internal floor space in public rental housing.

Micro flats are generally those with layouts of less than 200 sq ft, according to property agency JLL. They have been on the rise in private developments in recent years as they were meant to appeal to the average buyer desperate to get a foot on the property ladder but priced out of anything with more living space.

In response to media inquiries, a Housing Authority spokesman said in a statement on Thursday that the size and design of the new flats were the same as established designs for other public rental housing projects.

“There are no grounds to suggest that other types of residential flats smaller than the standard PRH flats are introduced specifically for GSH projects,” the spokesman said.

Citing some media reports that raised concerns such small flats would not be popular among buyers, the spokesman said the Authority believed they would make “prudent decisions based on their own situation”.

He added that any flats not sold in the first round could be offered on the market again at other times.

Democratic Party lawmaker Andrew Wan Siu-kin, who is also a Kwai Tsing District Council member, had concerns about potential environmental problems, as the Tsing Yi site was close to the city’s busiest container terminals.

“More work needs to be done to address the problems of light and noise pollution … otherwise future residents will be affected,” Wan said.

He suggested that building designs needed to be fine-tuned, such as by improving window soundproofing and making sure living rooms did not face the port, which operates around the clock.

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Prices for the flats would be announced later, the authority said, but would be based on family budgets and affordability. Last year 2,545 subsidised homes under the scheme were put up for sale at an average price of HK$6,243 (US$795) per sq ft, which was 58 per cent of the market price.

Residents are expected to be able to move into the Chai Wan estate by 2022 and Tsing Yi by 2023.

Hong Kong leader Carrie Lam Cheng Yuet-ngor in 2017 proposed turning the pilot scheme into a regular one as part of efforts to help more families get on the property ladder.

Previous subsidised homes projects have been heavily oversubscribed, with more than 40,000 applicants vying for a 2,545-flat estate in Sham Shui Po.