Tens of thousands of low-income families and immigrants are forced to live in the tiny subdivided units, unable to afford sky-high rents in the crowded city of seven million.
Hong Kong's Beijing-backed leader Leung Chun-ying has promised to make tackling the housing problem a "top priority" by boosting the number of new homes for Hong Kong people.
But the study showed the problem is even greater than previously thought, with an estimated 171,300 people living in 66,900 subdivided flats.
The study was carried out from January to April by Policy21, a survey organisation comprising academics from the University of Hong Kong.
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The Census and Statistics Department last October estimated 64,900 people live in subdivided flats, cubicles, caged bed spaces and cocklofts, which are usually around 3.72 square metres.
The tiny apartments cost less than USD 26 a month, but poor workmanship and lax standards often create structural dangers, hygiene problems and fire hazards.
Many of the victims died of suspected smoke inhalation in a stairwell that appeared to have been blocked.
The Asian financial centre has some of the highest property prices in the world, driven by limited supply and speculation from wealthy mainland Chinese investors.
The government has raised real-estate purchasing and resale costs for non-local buyers in an attempt to cool the overheating market.