https://www.youtube.com/watch?v=ejPOLhfBpy8 This is like a hotel room, a college dorm or a damn hamster cage!
While this might be OK for a single person, there should still be extra space for a separate bedroom. A kitchen-dining area as well as a proper living room. Thus, anything under 600 sq. ft. just isn't a proper 1 bedroom apartment. 2 and 3 bedroom apartments are essential for families. 4 and 5 bedroom apartments for larger families, but that gets more costly in several ways.
https://www.omlet.co.uk/guide/rabbits/should_i_get_rabbits/how_many_live_together
https://www.chewy.com/education/small-pet/rat-and-mouse/how-many-mice-can-live-together
https://medium.com/enrique-dans/the-metaverse-and-the-matrix-c7609196eddd
https://matrix.fandom.com/wiki/Pod Yes, you can live in your own excremental pee-pod. WTF?
https://www.syfy.com/syfy-wire/science-behind-the-fiction-humans-as-batteries-as-in-the-matrix-probably-not-gonna-happen This would be a totally inhumane prison setup, but its not run by people in the first place.
As AI gradually removes more jobs from people, some control-freaks might resort to implementing draconian social control measures over the disgruntled masses.