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Move to somewhere they can afford - simple.

I know, last time I was in one (converted motel room at Artarmon), there was barely enough room in there to change my mind.

Am I missing the point? Why would you consider leasing a room with a bathroom to 4 people (family or unrelated)? That is why they build 2 bedroom units.

NSW Fair Trading doesn't care - it doesn't inspect buildings, its role is to adminsiter the Residential Tenancies Act/Property Stock & Business Agents Act. Council may have an issue with overcrowding and body corporate will likewise. This unit will be using more than its fair share of water...