Or alternatively trying to not have an area run rampant with too many people living in a house causing fire risks. Or god forbid trying to plan a city for density, resources, school locations.

Come on - zoning rules aren't some tool of repression. Sometimes they can be, but that isn't their raison d'etre.

If your housing pressure is so significant, or your poverty so extensive, that people are willing to live in unsafe, overcrowded situations, then trying to regulate that away is not very likely to improve things, but just push people into other negative situations, like illegal lets where they have little recourse to complain about problems without the risk of losing their home.