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In Elizabethan and Tudor times, property taxes were paid on the amount of ground space a house took up. So in order to keep "property taxes" to a minimum, whilst increasing inside living space, the "ground (or first) floor" would be built with a minimal footprint, but the "upper (or 2nd and 3rd) stories were built overhanging the street to give more living area inside.

The upper stories of houses were often built out so far that they nearly touched their neighbours house across the street, resulting in very dark streets, which often received very little sunlight. And since the upper stories had windows, which were accessible to indoor pets, occasionally an unfortunate animal would fall out of the upper level windows, which gave rise to the saying "Its raining cats and dogs" :-)

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