I think this phenomenon is an obvious sign of incompetent government based on my experience living and traveling in several countries (not in the same sub-continent mentioned in the article).

An apartment, smaller than the hotel room (typical 4x6m) is not a proper living place, whether it's meant for single guy or a small family. I like the approach in one country, where all the apartments must fit certain size, e.g. 80sqm for a family with 2 kids. Even, for low-income income families, they still have to get at least 50sqm, government will subsidize.