A limit on people per room or unit area would make more sense to me than a flat limit on unrelated people.

There's a lot of status (and hence, housing price) based on the nature of the people living in an area. If there are a lot of communes in an area, house prices will be lower than if the houses are mostly occupied by nuclear families. The worst is if you have a place where a lot of lowish-income, relatively transient, single males live -- and there's been trouble in lots of places when some landlord realizes that the total rent from such a situation can be significantly higher than from a married couple and one and a half kids.