When big cities gutted their single room occupancy (SRO) inventory in the mid-to-late 20th century—and failed to replace them with Section 8 or anything else—it left a big gap in the market for cheap and flexible housing. The vanishing SRO can be blamed for the birth of the roommate and its consequent squeeze on family-friendly urban housing and—more critically—the birth of the modern homeless crisis. One poll from 1980 found that half of NYC’s homeless population had once lived in SROs. Moreover, what SROs survived the purge became de facto bastions for the uber-poor, reinforcing negative stereotypes about the housing type.
A recent report by NYU’s Furman Center is renewing interest in the SRO as a viable market-rate housing typology. They argue that small efficiency apartments with shared kitchens and baths (i.e. SRO units) can achieve development and operating costs far lower than conventional apartments; for example, per unit hard costs on SROs are 67% less than normal studio apartments.
Because of something called “Density Factor Regulation,” it’s effectively impossible for market-rate developers to build SRO units in NYC. The only SROs than can be built legally must be for supportive communities like homeless populations, disabled, etc. (Incidentally, the laws are much the same in SF.) The report recommends lifting this regulation.
Even if the regulation was lifted, SROs might have a slog ahead of them with lenders leery of any new product (even though SROs—otherwise known as residential hotels or boarding houses—have been around for centuries).
Nevertheless, with increased investor interest in housing products like coliving and ever-worsening urban housing affordability crises, it’s not a stretch to say there’s a decent market for small apartments for singles with low price points. And with a little rebranding and a tech layer to handle security, the SRO could once again provide roots for the less settled urban citizen.