It’s not unusual to find 16 pupils sleeping in eight double-decker beds in a 1,000 square foot home in Hong Kong when they’re not attending their schools through the day. These places are known as hosting family residences.

These residences exist for children aged from six to 10 because their mainland parents want to give them a better education. The children were born in Hong Kong but their parents are non-permanent residents.

The parents have gone back to China to work, but choose to leave their children in Hong Kong because they believe they have a better chance in life by being raised in the city.

It is not a cheap plan, according to local media. For each child, they have to pay about HK$13,000 (US$1,656) a month for a five-day stay, or HK$16,000 a month if it is a seven-day residence with meals included.

The parents also need to pay a one-off fee of between HK$16,000 and HK$21,000 for school fees, depending on whether the child attends a public or private school.

These arrangements were made possible because of loopholes in the law up until 2013, when Hong Kong decided to stop non-resident mothers giving birth in Hong Kong’s public hospitals. The law was bought in due to strong protests from locals, who had difficulty securing hospital bookings.

The number of children from non-residents surged more than 50 times to 32,600 in 2010 from a mere 620 in 2001. The actual number might be even higher after 2010.

That is also why host family businesses blossomed.

The Oriental Daily, a Hong Kong newspaper, estimated that a host family could run a 1,000 square-foot home with three bedrooms for a monthly sum of HK$250,000, while hiring three mandarin-speaking caretakers and a Filipino domestic worker to take care of 16 children, aged 6 to 10.

A company could generate revenue of HK$800,000 per month by running three mini-hostels that served up to 50 children.

However, local media said operators of these kinds of hostels may have violated Hong Kong’s Bedspace Apartments Ordinance, Child Care Services Ordinance and Education Ordinance. No operators have so far been prosecuted.