This is how Japan has "affordable" housing. 300 square foot per person or less on average. Bedrooms get reused during the day by putting the bed away.

Laundry is in the kitchen or bathroom, no dedicated space. No utility closets.

No yards, no property setbacks, and for a lot of apartments no parking at all or only single stalls for some people.

You can see all of this in the way they name their rental/sales listings.

1DK means 1 bedroom, with a dining room and a kitchen. Dining room meaning that the kitchen is large enough for a table, not a separate room.

1LDK adds a living room. That's still likely under 400 square feet.

1K also exists. It's literally 100-200 square feet and a kitchen in the main area, and a bathroom. The bathroom has a clothes washer, but no dryer. Most people hang dry in their room or balcony.

We honestly should build entire towers with a hundred 1K units here within 1 block of transit hubs and no parking.

Even our micro housing is not usually this small and most zoning bylaws dont allow for anything like that.

Giving people an absolute minimum option relieves stress on the other larger units which brings overall prices down. Such buildings would be much cheaper because they use less land and as the original post mentions they have zero luxuries. It's copy paste of the simplest possible housing unit and your only customization is wall paint colour.