My wife and I watched this last night. Our conclusion was that there a whole lot of really dumb-ass investors out there.
The main thesis is that small, basically useless units are built to satisfy the requirements of people hoping to either flip directly or to rent to cover the difference between finance cost and eventual market value. That is they are built to the demands of the investors, both institutional and private.
How bad of an investor do you have to be to be sinking money into a dwelling that nobody actually wants to live in? And how did we get so many of them that it's impacting housing to this degree?
My opinion is that someone, somewhere has been running a con. A scheme where your market is not people who want a place to live, but people who are looking to make a profit by selling to others looking to make a profit.
Now the scheme has run its course and the most recent owners can't get out because, surprise!, nobody actually wants to mortgage their very lives for a glorified closet.