Key Takeaways
- Single-room rentals provide an important first/last step on the housing ladder, making them an essential component of the broader housing ecosystem.
- Regulators have driven single-room rentals almost out of existence since the mid-20th century, with the effect of aggravating housing scarcity and homelessness.
- In places where the zoning rules have allowed them, single-room rentals are commercially successful.
Demands for broad zoning changes to allow greater density in urban areas are growing. Not only do we need to increase the volume of housing units on the market; we must ensure a diverse and inclusive mix of units to meet the varied needs of residents.
To that end, reformers should take more interest in a tool they often overlook: the humble single-room rental. By providing an initial landing point for newcomers and a first step on the housing ladder for many, single-room rentals can be a lifeline for people who would otherwise live on the street. However, this most modest housing typology also liberates people who prefer to live independently and within their budget.
Historically, boarding or rooming houses often began as single-family homes, where the property owners may have resided at the property alongside the renters. Alternatively, long-term single-room occupancy (SRO) hotels have more units than a boarding or rooming house and are more likely to be within purpose-built structures, such as converted hotels.
An overlooked history
A quick look at the evolution of single-room occupancy underscores the value it has historically had in the housing ecosystem and its advantage regarding the current housing shortage. In America, informal single-room rentals date back to colonial times. Many delegates to the Constitutional Convention in 1787 stayed in Philadelphia boarding houses during their deliberations.
During the Industrial Revolution, single-room rentals flourished as millions of immigrants and farm workers moved to cities. Early single-room rentals provided a mutually beneficial relationship. The arrangement allowed newcomers and those who needed no-frills housing to access housing that met their immediate needs. At the same time, this arrangement would allow homeowners to supplement their income and stay in their homes during retirement or other periods of diminished cash flow.
Across society, permitting single-room rentals mitigated some effects of “housing mismatch,” the phenomenon of living in a home not ideally sized for one’s particular stage of life. A common example is a widow or retiree living in a home meant to accommodate their late spouse and multiple children; as a single-room rental operator, the owner could rent out spare rooms and provide meals to the tenants.
Starting as early as the 1880s, critics sought to push single-room rentals, and their tenants, out of cities. Businesses and critics sought fundamental changes to how cities were organized for hundreds of years, where property uses and individual incomes were intermixed to meet market demands for labor. These critics sought to concentrate single-room rentals, if they were allowed at all, in poorer or industrial parts of cities.
These critics thought that concentrations of unmarried and young people in cities, living apart from the natural supervision of their families would lead to sinful behavior. Even well-meaning reformers who believed single-room rentals were a corrupting influence on their residents still knew little about the needs and desires of the residents they purported to represent, according to the book Living Downtown: The History of Residential Hotels in the United States by Paul Groth.
Unfortunately, these efforts largely succeeded in gradually reducing availability of single-room rentals in American cities, leaving us with the affordability crisis we see today.
Small units, big impacts
In recent years, too, short-term renters have often been misunderstood by policymakers and stigmatized by the public with stereotypes about substance abuse, mental illness, and criminal activity. This combination led local governments to reduce or eliminate single-room rentals from their jurisdictions.
Ostensibly neutral regulations, such as minimum parking requirements, minimum square footage per unit, requirements for in-unit bathrooms and kitchens, and restrictions on how many unrelated persons could share a unit, restricted single-room rentals more severely than other housing types. These rules add costs and erode the efficiency of the single-room rental housing type. They also add “amenities” like parking and excess floor space that residents are not willing or able to pay for, frequently rendering the housing type uneconomical.
From 1970 to 1990 alone, U.S. cities used restrictive land use and construction regulations to eliminate 1 million single-room rentals. According to the Department of Housing and Urban Development’s 2020 census, 580,000 people were homeless in the U.S. during January 2020 – a month when visible homelessness would be at its lowest. While homelessness has myriad causes and individual struggles with homelessness are diverse, it is hard to ignore the correlation between the postwar decline in single-room rental supply and the massive increase in homelessness that began in the 1980s as the available stock of single-room rentals waned. Mass individual homelessness in its modern urban form was essentially unknown in America before 1980.
Unmet demand for low-frills housing
Few jurisdictions are currently courting market-rate single-room rentals by liberalizing land use and building regulations, and even in places that have ventured the experiment, the politics have remained difficult. Seattle legalized single-room rentals briefly. Under that ordinance, unit completions peaked in 2016 as previously-legal projects were completed.
New York City also took an incremental step toward legalizing single-room rentals in its 2016 microunit regulations. While the current regulations do not specify a minimum size across all units, they do require units to meet other building code requirements that can be smaller than the old 400 square foot minimum, including a 150 square-foot minimum main room size exclusive of any closets, bathrooms, or kitchens.
Even with these changes, other parts of the city’s regulations prohibit microunits. For example, NYC’s Housing Preservation and Development guidelines separately ban studios under 350 square feet in affordable housing developments, with the exception of some districts and for senior and “supportive housing” units, where there is a 300 square-foot minimum.
Conclusion
Today, poor policy choices and high prices lead many people to forgo their ambitions in high-opportunity regions. Others make different sacrifices that have their own knock-on effects, such as renting larger apartments with multiple roommates that crowd out larger households, like families with children. These outcomes are not a passive consequence of market preferences. Instead, they are an active result of deliberate policy decisions to restrict choice.
Single-room rentals are mutually beneficial to owners and renters. They enable people to determine what housing situation is best for themselves; they free up larger units for households that need them; and they support diversity of housing types and circumstances beyond what planners, regulators, and concerned citizens can foresee.
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