It could be a boon for New York and San Francisco, according to Emily Badger:
Around the turn of the last century, American cities were full of housing options that are largely nonexistent today: tenements, boarding houses, rooming houses, flop houses, single-room occupancy buildings or SROs–all variations on the idea of small living spaces at low cost. Some were rentable by the night. Some were built around shared amenities like showers and kitchens … All of them contribute to our grainy picture of early urban America as overcrowded, flammable, and full of unscrupulous landlords.
By contrast, most American cities today regulate the low end of the studio market, setting it somewhere around a minimum of 400 square feet in size. Likewise, building codes set a ceiling on occupancy, capping the number of unrelated people who can room together under the same roof. The effect, argues the Sightline Institute’s Alan Durning, is that we’ve outlawed the bottom end of the private housing market, driving up rents on everything above it. If we want to make cities more affordable, he proposes in a new ebook, Unlocking Home, we should look again at housing solutions that went out with the last century.