That's not how the 'black market' ones I've seen operate. And I've seen a lot from when I visited the circuit of underground artist-related events when I lived in chicago. They are shockingly common in areas with extremely high rents and an oversupply of unused commercial space.

They might subdivide it 12 ways, but there is one shared kitchen for a whole floor and maybe 2 toilets, 2 sinks and the residents are going to the laundromats. They tend to put the shared amenities on the ground floor as much as possible because it is easiest to expand them there. It beats being homeless by a long shot.

For reference, when I hauled water, we used about 60 gallons a week for a family, or about 0.05% utilization of a 3" drain pipe for a single family. You do not need much water in order to be way way better off than being homeless; 5/gal a day of non-potable water and you're pretty much in luxury comparatively and a shit-ton of people can be putting that down a 3" or even 2" drain pipe before it causes problems. A 3" pipe is the minimum that would be serving a typical floor of a warehouse, so plenty enough for a constantly used couple of shared bathrooms with a shared kitchen. Honestly even splitting it 12 ways could be overcome with some technical ingenuity (electric lock-outs to prevent more than a few in use at once, and AAVs to prevent needing a bunch of new vents).

These are all easily overcome problems for people utilizing an ounce of civil disobedience with regards to the code. And yes I have personally done all the design and plumbing and electric for multi-structure properties (though not the black market ones).