Once upon a time there were boarding houses where for a few dollars per week you can get a room and meals. Often these houses were run by a widow or other elderly person supplementing their income. These homes have been zoned out of existence.
Sure, people still rent rooms, but it has become much riskier. More often than not, offering a room for rent will put you in violation of a plethora of laws: zoning, fire codes, food safety, business license, municipal taxes. And running an out and out boarding house would be a legal nightmare.
And this doesn't take into account the way society has changed. Once society's marginal people were just economically wanting but otherwise normal. In today's world of sexual freaks, drug addled wastrels, habitual drunkards, and violence prone mental cases, renting a room out could be a terrible risky proposition. And depending on the community, running a full blown boarding house could be as dangerous as Russian roulette.
Many houses that are for rent today do not have a group of long-term roommates, but renters who come and go, somewhat akin to a boarding house with only the “room” but no “board.” Unfortunately, as you say, it can be a bad situation for people. Our daughter is renting a room in a house. A new tenant moved in this week (only the two of them) and, when our daughter came home from work, the house was thick with dope smoke. The landlord had said OK to it without telling our daughter. So she is now out looking for a new place.