The setting of “The Furnished Room” is the Lower West Side of New York City at the turn of the 20th century. The United States was navigating rapid industrialization at this time in history, leading many Americans to flock to cities for factory jobs. While some people found well-paying positions, many new urbanites ended up living in poverty and therefore could not afford stable housing. This is the reason that short-term tenement housing—as seen in the story—came into being. Paying for a temporary “furnished room” rental was one of the only options for unhoused low-income people.
The fact that the story is titled “The Furnished Room” shows how, while O. Henry is ostensibly telling a story about lost love, he is setting it in tenement housing in order to make a point about the negative effects of such establishments. He is showing how such housing is just another element of capitalist dehumanization—the housekeeper did not open her doors in order to help serve the low-income theater and factory workers in New York, but to make a profit. She does not care whether her tenants live or die, as evidenced in the casual way she discusses Eloise’s suicide with Mrs. McCool at the end of the story.
Another important element of the setting is the rise of vaudeville in late-19th century New York. Vaudeville was a form of theater that featured a variety of acts, such as acrobatics, music, and comedy. Because work for vaudeville performers was low-pay and inconsistent—and often involved travel to other cities—performers (like Eloise in the story) often rented short-term furnished rooms. That the housekeeper in "The Furnished Room" brags to the young man about the various vaudeville actors who have stayed in her establishment communicates the connection between tenement housing and theater performers.
