Dorm style living works less for large "families", but all units do not need to and in fact should not be built to accommodate families.
Aren't we trying to make housing more affordable for the poor, not just the poor singles?
Housing for singles and the childless are different problem with different constraints than for families and thus requires different solutions. Making everything better for families inherently makes things worse for non-families. We need to do separate things to increase housing opportunities from singles and families, as well as for people merely in need of temporary housing were they can save as much money as possible versus more long term housing.
IOW, the fact that certain standards makes sense for long term comfort of families is not a reasonable basis to make those minimum standards for all dwellings.
Shared areas aside, I don't see how anyone can deny that the per unit sq footage requirements highly determine rents because they determine the cost of the land and construction per rentable unit. A 50% reduction is per occupant sq footage, means a 50% increase in the number of units built on the same land within the same building.
No one would deny that. What I'd deny is that 200 SF is a number that should be reduced. What is 200 SF? It is about 14 feet by 14 feet. That doesn't seem too large to me. That means one small bedroom, plus a tad bit more space. That isn't a lot.
So, first, we need to be clear that 200 feet is not the actual legal minimum in most of the US. Most regions have much higher minimums (Chicago its over 400), with many areas having truly absurd minimums such as 10,000 square foot lots per family with corresponding thousands of sq foot dwellings. The latter local rules are often in place to keep all but the rich out of various areas. IF we all agree to do away with most US regulations and just go by the ICC, there would probably be no disagreement, because that would lead to much more flexibility and saneness than current US and regional laws do.
When I was 20, I lived in a 150 sq foot place, including the bathroom and kitchen. It allowed me to cut my rent in half and save money to start attending community college which was my gateway that eventually led to a Ph.D. If my landlord had not violated the harmful and dumb laws of my state, that would have caused my well being and economic progress far far more harm than living in a smaller than legally acceptable space supposedly did. In fact, that small space motivated me to be outside more and at parks, improving my health. It was built out former shed attached to a house. IF the home owner couldn't have rented it as is, it would have just sat there empty. Landlords that provide tiny and comparatively cheap spaces for people are often doing their communities a service. Regulations that prevent them from doing so are harmful to the poor.
That is why I added the qualification that specifically approved exemptions could be granted with conditions, such as the max rent for such units could be set a 1 standard deviation below the mean going rate of units in the area without that exemption. Setting rents at variable levels that are relative to the local real estate market has many obvious advantages that overcome most of the valid objections people have to rent controls set at absolute values that can only be altered via legislation.
Price control would seem reasonable, and something already done. Axulus seemed to have thought he discovered the holy grail. Turned out to be just a half thought.
I agree the OP was half baked and I'm still waiting to hear from Axulus whether he agrees that such contingencies like rent-limits in exchange for case-by-case laxing of regulations is preferable to a simple blanket reduction in restrictions that will be abused by landlords in ways that yield minimal benefit to the poor.
However, most prior or existing rent controls set absolute dollar amounts rather than make the limits relative to variable market values. That's because those limits are usually just applied to whole area which means there is no local variable market to tether them to. A more sensible approach is to make the rent controls, building specific in exchange for reduced restrictions that could harm a community if allowed across the board, but have benefits and limited negatives when allowed in limited instances within a given radius.
Except when its something that is always very harmful (e.g. murder) blanket inflexible rules often do as much harm as good. We need creative, target, and flexible solutions to complex problems. We often avoid flexibility in rules because it opens the door to unfair and corrupt application. But the solution to that is flexibility that is no up to arbitrary private decisions of individual administrators, but rather tightly and visibly tethered to other easily observable and verifiable factors.