The Small House Policy (SHP) (Chinese: 小型屋宇政策) was introduced in 1972 in Hong Kong. The objective was to improve the then prevailing low standard of housing in the rural areas of the New Territories. The Policy allows an indigenous male villager who is 18 years old and is descended through the male line from a resident in 1898 of a recognized village in the New Territories, an entitlement to one concessionary grant during his lifetime to build one small house.
The policy has generated debates and calls for amendments to be made.
The Small House Policy (Chinese: 小型屋宇政策) has been in effect ever since 1972 to provide an once-in-a-lifetime small house grant for an indigenous villager who is "a male person at least 18 years old and is descended through the male line from a resident of 1898 of a recognized village (Ding)(Chinese: 丁)which is approved by the Director of Lands". An indigenous villager therefore enjoys small house concessionary rights (ding rights)(Chinese: 丁權) in building a house of not more than three storeys nor more than 700 square feet, through either Private Treaty Grant, Building Licence or Exchange issued under this policy. These rights were further incorporated into the constitutional framework. It was stipulated in Article 40 of the Basic Law – "The lawful traditional rights and interests of the indigenous inhabitants of the 'New Territories' shall be protected by the Hong Kong Special Administrative Region", creating difficulties to make significant amendments to this policy. By 2016, there are approximately 240,000 small house concessionary rights holders in Hong Kong.
The Small House Policy is a legacy of the British colonial government. In order to cater for the needs of an increasing demand for housing and to prevent another 1967 Riots, the outbreak of which was partly due to people's discontent towards the indifferent attitude of the colonial government toward public welfare, threatening the colonial rule, the colonial government was keen on improving the living conditions of Hong Kong dwellers in the 1970s. One of their plans was to develop new towns(Chinese: 新市鎮) in the New Territories, which were later known as Tsuen Wan New Town, Sha Tin New Town, Tuen Mun New Town and so forth. As this would require a large-scale confiscation of land and demolition of housing, David Akers-Jones, the ex-Secretary for the New Territories, implemented the Small House Policy in exchange for the New Territories indigenous groups' support for the new town development. Meanwhile, the government also added some constraints in this policy by launching Restriction on Alienation which required indigenous villagers to pay a premium if they wish to transfer their rights of ownership to non-indigenous villagers within a five-year period.