xvedejas parent
I've definitely done it in places (in the US) where locally it was not legal. But it's not like the cops ever checked and caused us trouble about it, so it's easy to get away with it if there aren't other legal issues going on.
Even where it's not legal, there's often ways around it - if one student is willing to be the "fall guy" so there's only ever one person on the lease.
The SRO bans went explicitly against a form of "hotel" really which was more individualistic.
An example is seen in Blues Brothers, before Carrie Fischer remodels it; probably to install higher density.