SROs used to exist to fill that gap, but were largely banned over the last hundred years. The stupid thing is that now they basically exist again in the form of regular hotels, except city governments are the ones paying full price to house otherwise homeless people.
this would be interesting history to review in video format of someone walked through the before and after and the transition. This makes me think of these very old hotels which used to line a major street in my town that slowly faded away and crumbled. I wonder if they were SRO properties essentially.