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So basically allow shitty dwellings to be thrown together for the 'servant classes', while making sure the itinerant wealthy have the pick of the nicer places.

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That's not what I wrote. New housing tends to be nicer than older housing, and right now the option for people working in these place is often to commute in over long distances or basically 'hot bunk' in some cramped housing. Things are bad right now and more housing, especially housing dedicated to people living and working in an area, would help some people. At least it's an option they have rather than just getting priced out completely.

I'm all for 'right-sized' housing, of good quality, and without nonsense like parking minimums - but you did mention SROs (fine for students, but otherwise far from a good way to live).

The easiest way to fix housing right now is to ban STRs. The supply available to long term renters / home buyers would increase dramatically, quite literally over night.

I mentioned a lot of different things. SRO's are a good fit for some people. Not for others.

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