Bingo. And it's not even the exploitation. Believe it or not, it's the fact that there is no one to hold liable if things go wrong. At root, it's about on whic

Bingo. And it's not even the exploitation. Believe it or not, it's the fact that there is no one to hold liable if things go wrong. At root, it's about on which head does liability rest. You don't meet code, firefighters rush in, and the staircase collapses. Who do the cops and the firefighters go after? If it's the owner of the SRO, then no real estate investor will build one. (At least, not one that isn't up to code.) You can try to loosen the code, but the firefighters are only going to allow you to cut so much before their unions have your picture up on billboards around town as the big, bad, slumlord pushing for substandard housing. Owning a lot of real estate is not a picnic, and you learn a lot of things you never knew before about how local politics work.