THe basement room is almost certainly not habitable space (egress, ventilation, etc...). It would appear, however, that Acgr and his housemates are corenters of the house as a whole. As long as there is sufficient habitable bedrooms (possibly with more than one person in each one) to support the number of tenants rented to, there's no "habitability" argument. He's got a spat with his corenters about them making him sleep in the basement, but it's means nothing with regard to his oblgiations under the lease.

Now if it was a sublet, he could use that argument to break the arrangement with his "landlord" which would be the tenant of the other landlord, but it doesn't sound like that is the case here.