ABSTRACT High-density housing development is considered a pragmatic response to the conflicts between land scarcity and population growth. Under the rhetoric of (neo)liberalism, the flourishing private housing market narrative was anchored throughout the last century, along with significant contributions from government regulations. The 1955 Buildings Ordinance, which eased height limits, laid the groundwork for Hong Kong’s high-density foundations. The existing historiographical literature examines this from a technical perspective. However, it overlooks the decision-making processes behind these regulations and their alignment with or deviation from free market principles. This study examines colonial archives to scrutinize the colonial government’s approach to building regulations, revealing that easing height restrictions was not merely a technical adjustment but a calculated response to broader economic and demographic challenges. It was a strategy to stimulate private housing development and manage population growth without significantly increasing government spending. This raises concerns regarding prevailing assumptions that the colonial government supported a free-market approach to housing rather than exploring the debates and deliberations that shaped these policies. By comparing colonial experiences in Hong Kong and London, historical analysis challenges the conventional understanding of Hong Kong’s urban development, thereby highlighting the contentious relationship between liberal economic policies and the colonial administrative framework.