The Banished Bottom of the Housing Market
95 comments
·November 20, 2025andrewla
potato3732842
Yes, it's absolutely a "death by a half dozen gunmen" situation (the phrase "a thousand cuts" doesn't really imply the appropriate level of culpability for this situation IMO).
The reason we see these simplistic narrative is because nobody wants to blame their pet favorite regulation for having any hand in it.
A great example is HOAs. Everyone wants to complain that they stand in the way of diversification of housing stock or use of land. Nobody wants to address the fact that they're infinitely more prevalent than they would otherwise be as a side effect of environmental regulation and often their absurd rules were a condition of approval of the development in question in the first place.
RajT88
I sat on the board of an HOA for a small condo building where I had purchased a unit. The board was comprised of owners.
The HOA was our only way of ensuring bad owners didn't abuse their ownership rights. It was an old building, so all the water was shared on the water bill and the HOA let us split this up based on square footage. Units which had excessive numbers of people living there also liked not to pay HOA dues of any sort (doubling the water bill problem for other units).
At one point a unit was running a brothel! This was wild to find out about, because it wasn't in a bad neighborhood or anything - it was the historic district.
HOA's have their uses, but also like any positions with power, they attract people who want to give meaning to their own insignificant existence by lording it over the less powerful (insignificant in the sense that most of our lives are insignificant).
potato3732842
There's a categorical difference between a single building with owned units that needs a legal entity for the common stuff (i.e. the structure) and a 1+ acre development of N-family homes that needs an entity on record as responsible for maintaining their legally required stormwater plan in perpetuity.
Tiktaalik
> My understanding was that it was the tenant rights movement that killed SROs and boarding houses by making it practically impossible to keep them orderly, because it made eviction almost impossible and compliance with anti-discrimination laws presented too large a burden for low-cost housing.
Possible that tenant rights could have had some negative impacts as you say, what's the timeline on when that would have been happening? We do know that very early on that wealthy neighbourhoods were working hard to prevent SROs (prevent multi-unit buildings at all really) for class and racial exclusionary reasons. We have a great deal of direct evidence of this in contemporary reporting on these issues.
> By the early 1900s, cities and states were classifying lodging houses as public nuisances. Other laws increased building standards and mandated plumbing fixtures, raising costs and slowing new construction. Urban reformers next embraced exclusionary zoning to separate undesirable people and noxious uses from residential areas. SROs were deemed inappropriate in residential zones, and many codes banned the mixed-use districts that sustained them.
In Vancouver for example they brought in zoning to put an end to apartment development in a great deal of residential areas in the 1930s.
brightball
This tracks. There was a problem, the market solved the problem, regulations killed the solution and now we have a bigger and worse problem.
jordanb
Here in Chicago there are still some SROs. Chicago has middling tenants rights: not as strong as New York or SF but stronger than most of the country. If tenants rights ended SROs you'd expect them to not exist in a place like Chicago.
I moved to logan square before gentrification. There were two SRO buildings that I knew of. Both were redeveloped by the time I moved out.
SROs often serve as half-way houses for people getting out of prison so there's a lot of community opposition. All the SROs that are left in Chicago have been around a long time, there aren't new ones being built and the old ones slowly go away when the area gentrifies.
Matticus_Rex
Tenant rights didn't end SROs, but they made them much more expensive to operate in cities that make evictions difficult. Most cities were already discouraging them with zoning and building codes, and tenant rights expansions in some of the most expensive cities just doubled down.
Where they still exist in significant quantity, it's usually because of subsidies, carve-outs that exempt them from some code or regulatory requirements, or both. NYC still has the most in the country, and might stop losing the ones they have so quickly thanks to some 2023 carve-outs and subsidies. But as a percentage of the housing stock (which is already too low!) they've declined from ~10% in the 1950s to >1% now. But it's very, very rare anywhere for new SROs to be built, and especially in the cities that could benefit most from them.
Chicago passed an ordinance in 2014 to preserve the SROs they had, with subsidized loans and tax credits to operators, but between 2015 and 2020 they still lost 37% of their remaining SRO buildings (no more recent data seems easily available).
andrewla
SROs still exist even in NYC; I used to live not far from one in Brooklyn that got bought and redeveloped. At one point in NYC there was a push for what they called "student living" or something, which was basically an SRO -- shared kitchens and bathrooms, etc., but all the ones I was aware of were made into city-run homeless shelters in the 2010s.
HDThoreaun
There are still a decent number of sros in uptown. We’ll see how long that lasts with the new towers and zoning probably making them prime redevelopment targets.
smelendez
The high-end SRO market arguably still exists. There are plenty of young Americans rooming with strangers they found on the internet, not infrequently converting the living room into an additional bedroom, and nobody in power really seems to complain unless they throw too many parties, even if the zoning laws prohibit it. I also think it's unlikely they'd rent to a down-on-his-luck, 45-year-old (even if they could afford it).
You can also find medium-term, single-room rentals on sites like FurnishedFinder, often explicitly catering to traveling nurses and other medical professionals. Again, my strong suspicion is that many of these violate local zoning laws, and nobody really cares.
astroflection
> The people we now call “chronically homeless” were once simply low-income tenants, housed by the private market in cheap rooms rather than by public programs. Once that market was dismantled, the result was predictable: the homelessness wave of the late 1970s and 1980s followed directly from the destruction of SROs. Today’s crisis—nearly 800,000 unhoused people in 2024—is the long tail of that loss, compounded by decades of underbuilding in expensive cities and soaring rents. As one advocate put it, “The people you see sleeping under bridges used to be valued members of the housing market. They aren’t anymore.”
Aurornis
The article paints a very friendly picture of SROs but dismisses problems as unwarranted moral panic.
However, I don’t get the impression that this is a balanced look at the problems facing SROs in modern times. The article barely touches on important details like the relocation of low-wage jobs away from the SRO locations or the rising amount of mental illness collected within such arrangements:
> In the 1970s, states emptied mental hospitals without funding alternatives, pushing thousands of people with serious needs into cheap downtown hotels unequipped to support them. What was left of the SRO system became America’s accidental asylum network—the last rung of shelter for those the state had abandoned.
I think low cost communal living arrangements with shared kitchens and more are much easier in theory than in practice. Especially today as norms have changed. When I talk to college students the topic of roommate conflict or debates about keeping common areas clean are frequent topics, and this is among friends who chose to live with each other. I can’t imagine what it would look like today with a communal kitchen shared by strangers paying $231 inflation-adjusted dollars per month to be there.
Then there’s the problem of widespread drug use. The availability and also the strength of street drugs is an extreme problem right now. Combine this with seemingly absent enforcement in some cities and I have no idea how you’d expect communal living low-cost SROs to not become the primary destination for people with drug problems.
bryanlarsen
In the 1920's SRO occupants were much more likely to be immigrants, with different cultural values and living expectations. So norms may have declined over time, but norms are much more uniform today than they were 100 years ago.
And while drug use is a problem today, alcohol abuse was a problem 100 years ago.
I think what made it more feasible in the 1920's was two things:
- much higher staffing levels. Hiring a janitor or cleaning or supervisors etc was so much cheaper than it is now due to Baumol's. They had staff cleaning kithcens and bathrooms, and staff warning and kicking out tenants that consistently left a mess. I can't imagine that being feasible today on a $231/month room rent.
- a willingness to kick out problematic tenants. The Y has a zero-alcohol policy, and will kick you out with no notice for violation. Tenant's rights laws and social norms make this much harder today.
Aurornis
> a willingness to kick out problematic tenants. The Y has a zero-alcohol policy, and will kick you out with no notice for violation. Tenant's rights laws and social norms make this much harder today.
You probably brought up the biggest problem with making this model work today.
In the 1920s the threat of being evicted rapidly for violations was real and present. Either you follow the rules or you’re getting kicked to the street.
Modern tenant laws are unbelievably protective of tenants and require extremely long periods to evict people. I know someone who spent months and tens of thousands of dollars trying to evict squatters who broke into their house while they were doing some construction work on it. If it takes months to kick non-paying tenants who were never invited out of a place you own, it would be a nightmare to try to evict people from an SRO fast enough to keep any peace.
steveBK123
The overprotective tenant laws also exacerbate the problem they are trying to solve.
Personally knowing what I know, I'd let my home sit empty a good amount of time & eat more rapid price cuts while trying to sell it than try to be a single unit landlord in NYC.
Likewise small time landlords are going to be much pickier about who they let rent from them, in possibly discriminatory ways. It's a much lower risk than having a bad tenant occupy your unit, fail to pay rent, cost you legal fees and possibly damage unit on way out after 6 months.
A landlord is not going to take a chance on a drug addict in recovery or other higher risk tenant in this context.
bryanlarsen
In my jurisdiction I once had a roommate who stole from me. I was the homeowner, and he was renting from me. I was able to kick him out without notice. If he had his own separate bathroom & kitchen I wouldn't have been able to due to those tenant protection laws you mention. But because we were in a shared space those laws didn't apply.
The laws for SRO should be the same as shared living, but I imagine it varies greatly.
rurp
Tenant laws vary dramatically by location. Some cities are like you describe but in others an eviction can happen within a few weeks with minimal trouble. California cities are some of the most stringent, so plenty of people in tech will have seen that extreme end of things.
It's honestly a tricky problem. Many of these tenant laws do cause a lot of harm and ultimately hurt renters more than they help. But at the same time there is an endless well of landlords abusing people who have very few avenues to defend themselves.
PaulDavisThe1st
> Hiring a janitor or cleaning or supervisors etc was so much cheaper than it is now due to Baumol's.
IIUC, this is an inappropriate of use of Baumol's cost disease. That is intended to apply in cases where the fundamental issue is that technology and/or process changes cannot improve the productivity of those performing a task, such as a symphony orchestra. Janitorial work has been subject to productivity increases, and ultimately, it's a bit of a stretch to use Baumol's to talk about a case where you can't for some reason reduce the number of people doing the work from one to zero.
Supervisory roles might, possibly, be an appropriate Baumol's example.
hamdingers
What is your proposed alternative? If the options are "people have conflict over who cleans the kitchen" and "rampant street misery" the decision is obvious, at least to me.
Drug use and mental health are also problems that need to be addressed, but you cannot cure someone of their issues while they're sleeping on the street. Unlike shared apartments, homeless shelters, or the street, SROs provide each resident with a private room and a locking door. If those were the four options I could afford, I would choose the SRO every time.
Aurornis
> If the options are "people have conflict over who cleans the kitchen" and "rampant street misery" the decision is obvious, at least to me.
Arguing over who cleans the kitchens is the version of the problem for friends who know each other. If you try the same arrangement and add people with severe mental health problems or drug problems randomly into the communal kitchens you would get something far, far worse.
I only brought that up as an example of what happens in the best case of friends choosing to live together, not as a suggestion of what it would be like with public strangers mixing together.
Negitivefrags
The person who runs the hotel isn’t doing it to house the homeless out of the goodness of their heart.
If a person abuses the shared kitchen, they get kicked out. This is a business. Maybe don’t do it next time.
And that is a good thing. It forces people to actually abide by the social contract.
And there will be people who can’t deal with that, and can’t live anywhere, but here’s the thing.
You need a first step on the ladder for people who are ready to actually enter society. Otherwise they never will.
ang_cire
> you would get something far, far worse.
Those 'far far worse' things are already happening to the unhoused, they're not unique to SROs and low-cost hotels, so all that keeping people unhoused does is make their lives even worse.
hamdingers
I don't follow, why would you let people with severe mental health or drug problems "randomly" into your communal kitchen?
In my 20s I lived in a series of 2-3 bedroom apartments with anywhere from 3 to 8 strangers I found on Craigslist. Decidedly not friends.
When a spot became available we would meet potential new roommates and decide if we felt safe sharing our space with them. The landlord would also meet them and do their own background check. We didn't let the first person off the street live with us, that doesn't make sense. AFAIK only homeless shelters work that way, and we're not talking about those.
This is the kind of disingenuous/unserious reframing of the problem that causes housing advocates to dismiss your opposition as "unwarranted moral panic"
euroderf
> In the 1970s, states emptied mental hospitals without funding alternatives, pushing thousands of people with serious needs into cheap downtown hotels unequipped to support them.
In the runup to this, there were stories appearing regularly of people being committed to institutions against their will, and without valid cause. In other words, putting someone away for other people's convenience (or financial benefit).
I interpreted the outflow of mental patients as an unexpected side effect of efforts to halt the above-mentioned abuses. Of course it's also possible that reform of abuses was used as a cover for simple, unintelligent budget cutting.
andrewla
Yes -- the closing of mental hospitals was very much in response to a moral panic (possibly justified) against the unreasonable use of involuntary indefinite confinement. That combined with the inhumane conditions in the facilities themselves, which was itself worsened by the difficulty in obtaining funding and overcrowding.
In the US this is very much an unsolved problem -- chronic homelessness is probably a problem better served by indefinite involuntary confinement, but the moral cost of this is very high and there's a lot of reluctance to go back to that. In Europe this is less the case -- if you look closely into any country that has made big strides fighting chronic homelessness (I'm looking at you, Finland [1]) underneath it you'll see a huge rise in the involuntary confinement numbers that are the quiet solution.
HDThoreaun
Not just the moral cost. The monetary cost is quite high too. Easy decision to save money by cutting something that most see as immoral, consequences be damned.
bee_rider
I kinda wonder… I mean, we mostly didn’t use the kitchen in my dorm (I only became aware of it because dummies set off the fire alarms using it).
A person might be fine, like in a typical dorm, with a microwave, microfridge, and electric kettle.
Especially if there was a low-cost cafeteria in the lobby.
People live in the city because they want to eat out, right? We should start at the realistic assumption for typical city-dweller behavioral patterns, not, like, take a suburban house and try to randomly time-multiplex part of it…
lotsofpulp
>People live in the city because they want to eat out, right?
No? Having a usable kitchen does not mean you cannot eat at restaurants, and surely a good portion of people who like to eat at restaurants also want to be able to cook at home sometimes, if only to save money. This is not even going into the fact that eating at restaurants is almost always unhealthy.
HDThoreaun
Maybe in Asia, but in the us eating out is crazy expensive. People living in cheap housing are not eating out all the time post covid.
roguecoder
Not necessarily. I have a stew place by me that is $12 for a plate of veggies + meat that is easily two meals for me. There are plenty of food trucks around with good options in the $5-10 range. And that's before we're looking at stuff from a bodega.
oluwie
WeLive/WeWork used to do this before the CEO fiasco. They operated a shared living space for working professionals. It wasn’t $231/mo but it was a great way for younger professionals to get their foot in the door living and working in the city.
dzonga
but it wasn't cheap.
kelseyfrog
Wouldn't you agree that the difficulties of homelessness pale in comparison to disputes over shared spaces?
aorloff
> Then there’s the problem of widespread drug use. The availability and also the strength of street drugs is an extreme problem right now.
In 1875 San Francisco adopted an ordinance banning opium dens. A little history might provide some perspective.
Aurornis
The SROs discussed in the article were prominent long after that.
Modern synthetic fentanyl is a different situation than opium for many reasons, including the relative strength and difficult controlling dosages. The current opioid epidemic is really bad for drug users, even with historical perspective.
michael1999
Let churches run them. That's the C in YMCA. It was founded as a mission to guide the development of young men in health directions.
hrimfaxi
When my father came to this country he lived in an SRO while working in restaurants in New York City. That gave him the start he needed to eventually grow a family of 6 that had the opportunity to experience the American dream. The decline of SROs (and IMO mixed use residential like where the owner of a deli lives on top of it) has really pulled the out the bottom rungs of the ladder making it harder to get a footing.
tidbits
Immigrants still do this. Except now they fill apartments and houses with bunkbeds. I know because my dad did this in the early 2000's and is still in contact with the local immigrant community.
epicureanideal
I think many Americans have the impression that this violates the terms of their lease, and without other-country kinship connections and networks, they’re not aware of how to find people who would lease under high occupancy conditions. It may even be illegal. So we may need to explicitly make these legal again so Americans will rent in this way.
tastyfreeze
There is a ridiculous perception that privately run high occupancy housing is abusive. I don't understand that at all. They are running a business that is compassionate enough to offer, at the bare minimum, shelter from the elements. If there is competition in that market, as there used to be, then the bad actors go out of business.
Like many things I think the answer is less regulation to prevent possible bad things from happening. Accept that bad things might happen and punish the people that do bad things.
I agree, this kind of renting needs to be allowed. If I rent a bed to somebody for 10 bucks a night in my home nobody is harmed and somebody had a warm place to sleep.
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helle253
I want them to come back, but isn't at least some of the problem with SRO's tenant's rights laws?
It's hard (or at least, unattractive) to run a flophouse if you cannot easily + risklessly kick highly disruptive individuals out.
draw_down
[dead]
roguecoder
Tech workers are prime targets for SROs, and it is wild that zoning has kept them out. I have had plenty of coworkers who ate the vast majority of their meals at work anyway and only used their kitchen to store clothes.
This portrays them just as an option for poor people, but if they were legal we would have high-end SROs also, for people who want high-end amenities but don't need giant amounts of space. Removing them hurts the people without other options the most, but zoning has hurt everyone's options.
acyou
But if we own real estate, we see the limitation and destruction of housing stock as value creation benefiting own personal assets. From that perspective, reducing this sort of low cost housing makes perfect sense.
Generations of young people have embraced this by joining em, not beating them, but this is becoming more and more difficult. It's unclear what prevents any one municipality from going vertical with young people buying, rezoning and building, I think it's related to the lack of income opportunities in some areas, as well as the built in and entrenched voter base. But as soon as any group gets in, they are pulling up the ladder, that's always going to be the case.
treis
This is and has been happening everywhere in the US except for the expensive coastal metros and maybe Chicago. What you're asking for comprises the vast majority of house that's been built in the last 10 years in my city. Dozens of 5-10 story apartment complexes with nothing bigger than a 2BR.
HN and people like the guy that wrote this article live in a bubble. There's plenty of cheap housing available in most of the country. It's people renting out rooms for $5-700 a month in a suburban house.
schmidtleonard
1000%. The good solution is Georgism (perhaps with rolling leases, which are hard to manipulate, rather than LVT, which is easy to manipulate) but obviously everyone who bought into the ponzi will fight you tooth and nail so probably the best we can hope for is to slap the Nth bandaid on the problem with some NIMBY busting.
Tiktaalik
With the recent boom in tourism in Japan there's been heaps of people coming back after seeing no homeless people, pointing to Japan some utopia with all the answers, and grasping for vague socio and cultural reasons as the explanation.
The answer to why there is less visible homelessness in Japan than NA is a rather more boring one in that they simply didn't destroy their last resort low income housing as much as Canada and America did and so there remain many more options for someone in Japan to duck out of the cold at a very low cost.
f1shy
There are countries in the world where homeless are pretty good hidden, by means of extreme expensive welfare, or are moved away from big cities, or at least touristic centers.
I have no idea in Japan. As I was there I saw extremely poor people (deduced from cloths and lack of hygiene) I doubt they had an own house. Even worst, I saw middle-class neighborhoods that I would associate with a favela in Brazil (albeit very clean and organized, each flat was smaller than a space in Rio.
crooked-v
Japan's also got plenty of dubiously legal operations for that kind of thing, like "24-hour cafes" with private booths obviously set up as illegal capsule hotels.
taeric
This is one that many arguing for more building also argue against. It is popular to talk about how we can make it so that people can afford a "starter home," not so that people have a cheap place to live.
giantg2
There is no "cheap place to live" due to property taxes in most areas.
taeric
I mean... this article discusses how this used to be done? It winds up looking a lot like dormitories at schools.
giantg2
If you set it up as a charity or something, then maybe you could. Otherwise, there's still likely $100+ in property tax per occupant per month even on a dorm sized space. That's before utilities, upkeep, paying off construction, admin costs, etc. Just look at what they charge for dorm rooms, and many of those aren't even in expensive areas.
cpfohl
I'm pretty sure the Y in my city (Beverly, MA) actually still has SROs. It certainly needs more options like this...
cpfohl
Yep. But it's twice as expensive as the ones mentioned in the article.
https://www.northshoreymca.org/wp-content/uploads/sites/28/2...
Tiktaalik
This is a really great article. The root causes of our problems have been the destruction of affordable housing.
Even back in 2007 when the housing crisis was only just starting to become noticible and we didn't yet have a full blown fentanyl crisis people that worked closely in low income communities were hitting the panic button about the implications of the destruction of existing SROs and other low income housing. Despite occasionally building new social housing buildings, the pace of destruction of existing affordable housing was so great that the city was net losing housing that low income people could afford.
https://thetyee.ca/News/2007/07/10/SRO-Losses/
> “The City of Vancouver has finally acknowledged that we are losing more low-income housing than we are building, and that vacancy rates are functionally zero,” said housing activist David Eby, of Pivot Legal Society.
(Irony here is that the activist quoted here, David Eby, is now Premier of the Province. Has he built a remarkable amount of low income housing? Nope!)
neilk
Thanks for bringing Vancouver into the discussion.
We have SROs here still, and they have a contentious relationship with both the government and the population they serve. Sometimes it's hard to tell if they are good or bad, other than they're probably better than people living on the street.
For example, a few days ago it was announced that a major SRO downtown would close. It was perceived to be causing nuisances, but also, we have FIFA coming soon and many cities do this sort of "cleanup" when events like that happen.
https://www.cbc.ca/news/canada/british-columbia/vancouver-gr...
You're right that Eby has shifted rightwards somewhat. In my estimation it's more to do with where the voters are. Sometimes we're electing socialist advocates for the unhoused to be premier and then we're electing Bitcoin-happy bagel merchants to be the mayor. Make it make sense.
almosthere
I remember in 2005ish or so I knew people that rented other's Garages. This was before AirBNB, I imagine the rent was 300 max in the Bay Area. I imagine now under the new world order, it's $3000 for someone's garage.
I'm not convinced at the narrative presented here, thought it seems compelling and worthy of further research.
My understanding was that it was the tenant rights movement that killed SROs and boarding houses by making it practically impossible to keep them orderly, because it made eviction almost impossible and compliance with anti-discrimination laws presented too large a burden for low-cost housing.
And rather than being refuges for same-sex couples and generally "[offering liberation from family supervision and the constraints of Victorian mores", they were the opposite -- often being extremely stringent in "morality" clauses and forbidding mixed company after dark. They were frequently racially exclusionary in ways that became incompatible with civil rights laws.
The reality is that the situation was probably a mix of both attacks -- attacks through over-regulation and tenant rights, as well as direct attacks on SROs as hotbeds of crime and illicit or immoral behavior, but I'm curious as to the mechanics of how this came to be.