IncreasePosts parent
Affordable is a stretch. When they went out of business in 2014, they were charging $30/night - $900/mo. You could definitely get actual rooms in NY or even a studio apartment for that much. Yes, it will be way out in the Bronx or Queens, in not a great neighborhood, but it is certainly better than a 4x6' room with a plank in it and just a knee wall between you and a number of strangers. Obviously for a lot of people coming up with $900 at once for a deposit or whatever could be the hard part, but these rooms were more of the equivalent of pay day loans than an actual value.
Perhaps they entered a price-increase death spiral as they were saddled with free-riders as the operator in TFA says.
Even the article from 1996 is $10/day | $300/mo which would easily afford you a room in a cheaper neighborhood back then (I'll have to trust the HUD reports from 1996 since I was a child at that point with no direct experience)