Boarding Houses are a form of housing for a town's citizens. A single boarding house holds five families. Unlike wooden and stone houses, people will not move into a boarding house unless they are homeless. This is especially important when considering that children must move out of their parents' house to form a new family and start producing children of their own.
Like other types of housing, boarding houses require heating to stay warm during the winter. They use as much fuel as a wooden house, but can hold 5x as many families. On a per family basis, boarding houses use 20% as much fuel as wooden houses and 30% as much fuel as stone houses. In addition, boarding hold much more fuel than other houses, requiring them to be restocked less often.
In order to use boarding houses as your sole form of housing, you must occasionally create families or your population will eventually die out of old age. To force citizens in a boarding house to form a family, simply set the boarding house to be deconstructed. This will cause all the eligible children to move out and pair up. Since they are homeless, they will move in to any available boarding houses. Don't forget to cancel the deconstruction order on your boarding houses.