The 1901 Tenement House Act was the most far-reaching of all the tenement reform bills. Along with setting standards that all but banned the construction of tenements on 25 foot wide lots (tenements erected after 1901 are often referred to as "new law" buildings), the bill required improved light, ventilation, and toilet facilities. Most importantly for the history of 97 Orchard Street and other older buildings, the legislation mandated a series of changes designed to improve conditions in pre-existing tenements. As part of these efforts, the 1901 Act established the Tenement House Commission, which undertook the detailed survey of local conditions.

The passage of the 1901 Tenement Act resulted from deteriorating conditions in the increasingly overcrowded tenement districts of New York and the alarm that these conditions incited among middle-class progressive reformers. The New York Times summarized the problems of life in tenement districts in 1896 as seen through the eyes of the reformers:

The chief objections to the old-style tenements are contracted quarters, lack of family privacy, and promiscuous toilet arrangements, inviting moral deterioration; lack of light and air, and of sanitary accommodations, insuring a large death rate, and danger from fire--that ever-present tenement horror. All of these are wickedly cruel when such houses are new; when they become old, dilapidated, infested with vermin and infected with disease germs, they are a disgrace to humanity and a menace, not only to the health of the unfortunate residents therein, but to the health of the whole community.

Under the leadership of Lawrence Veiller and the Charity Organization Society of the City of New York (CSO), the movement to improve tenement conditions broadened. Veiller believed that "bad tenement house conditions were the cause of most of the problems in our modern cities." He presented a plan to the CSO that proposed the establishment of an organization that would seek to improve conditions in tenement houses by securing new remedial legislation that would regulate new construction, assure that existing laws were enforced, stimulate the construction of model tenements, and improve conditions in older tenements.

Veiller's plan led, in 1899, to the founding of the Tenement House Committee of the CSO. The new committee attempted unsuccessfully to have new building regulations instituted in the city. Their inability to have the city pass new regulations convinced the committee that "no real progress in tenement house reform was to be made unless the whole community was aroused to a knowledge of existing conditions."

With this in mind, the committee organized an exhibition that ran for two weeks in 1900 and included photographs, maps, charts, and models of typical Lower East Side blocks, graphically illustrating conditions of overcrowding, poverty, and disease in the tenement house districts. The exhibition itself (held on Fifth Avenue and visited by over 10,000 people), and publicity that surrounded it successfully introduced its prosperous audience to the conditions that the reformers thought needed to be changed in tenement districts and led the New York State Legislature to appoint a Tenement House Commission.

The Commission's report, submitted to the governor on February 18, 1901 and to the legislature a few days later, proposed a new tenement act. So effective was the CSO and the Tenement House Commission that a new law was passed with great rapidity. On April 12, 1901, only two months after the Commission issued its report, the Tenement House Act of 1901 became law.