Yes and there is fierce competition for that in many larger cities, with sky-high prices to rent out a room. But they can't be offered at scale commercially because you'll never get the permits, and the only reason why you can rent these is usually because they're either operating completely under the table or via some carveouts that let property owner rent to 1 or 2 persons.

The pent up demand for this is obvious to anyone who's tried to secure a room only to have a gazillion people competing with them to pay $1000+ to rent an oversized closet to sleep in.

Studio apartments seem like a better option. Also, from a property manager’s perspective, you generally want to minimize shared spaces because they’re a pain and annoying to deal with.

I absolutely disagree. Renting a room in a single family home vastly limits the number of people you have to share those intimate spaces like a kitchen or bathroom with. You also get the option to interview and pick who you’re sharing those spaces with. I lived with housemates for many years, and in dorms during university, and dorms are not even remotely the same from a social safety and privacy perspective.