You cannot use the per room method. You need to calculate the square footage compared to your total living space square footage to get the percentage of the rental to apply to your expenses.
Why isn't the per room method allowed, I thought the IRS allowed that as a reasonable method. how would I calculate after getting the square footage of each space rented does this include the kitchen and living room that's used and shared with the tenants?
No, the IRS only allows usage as a percentage, not by the room count. You will apportion the common area by percentage also. For example, if the shared common area is 200 SqFT and it is used equally then 100 Sq Ft can be allocated to the rental area that is solely used for rental purposes.
For rental space, you only include space that was used EXCLUSIVELY for rental. So if you also used the space (as a 'shared' space), that does NOT count (although there is some flexibility for that for some things, such as utilities).
Once I have the room totals how do I divide the expenses?
Typically, whatever percentage of space is exclusive to the renter, is the same percentage of other expenses that can be reported on the SCH E.
So if 30% of your floor space is exclusive to the renter, then you can claim 30% of your rental expenses on the SCH E. There is one caveat though. If you have a landland telephone, the IRS says you can't claim any portion of that cost on your SCH E. (Pub 527 at https://www.irs.gov/pub/irs-pdf/p527.pdf page 16, 2nd column, 2nd paragraph). But any utilities that are exclusively for the tenant (such as a 2nd phone line) are 100% deductible.
Additionally, the shared utility must be available to the tenent for the exclusive use. For example, if you have satellite/Cable TV and there is not a cable drop/satellite box available for the exclusive use of the tenant, then you can't include any portion of that cost on the SCH E.
Now using the percentage of sq ft method is only one of the permissible methods. The other is based on the number of people. See Pub 527 page 16, 2nd column "How to divide Expenses".
Overall, I prefer to chose the method that keeps my depreciation deduction as low as legally possible. You can use SQ FT percentage for some things, and number of people for other things. But whatever method you chose for depreciation, you're stuck with. You can't change your depreciation method once a selection is made.