There have been similar incidents in California, although nothing anywhere close to the India tragedy. One immigrant family built a windowless room on the outside of a house, using the original window as an entry point. A fire in that circumstance turned out deadly. Window bars that do not meet the requirement that they be removable from the inside are another problem.

Many people living in a house is not uncommon around here, but there is no reason that it cannot be done safely if simple precautions are taken.

Libertarian though I am, it sure says something positive about reasonable building codes.