Why don't they?

I feel like you're trying to get a bite on that line. Obviously housing policy is a big problem here, and one that liberals love to whine about until anyone suggest that zoning laws be relaxed in their neighborhood to create low-income multi-family housing. I think Minneapolis is in the middle of an interesting experiment, as they recently banned single family housing exclusive zoning. I haven't been following it, but my guess is it will take years to get any data around it.

Personally, I like AirBnB. I like it even more since I've had kids, since staying in a hotel sucks when you can't go to restaurants for every meal due to kids, and you need separate bedrooms due to kids. Try renting a suite with a kitchenette at any hotel worth its salt. Usually not an option and when it is it's like $1200 per night. AirBnB obviously fills a niche that needed to be filled. Whether they satisfy all the appropriate tax laws and safety standards I guess should be up to local authorities.

I won't shed a tear for anyone who leverages the shit out of their personal income to get more AirBnB properties. There's no such thing as free money, and high reward is the opposite side of high risk. But as long as I can rent a condo in a desirable location when I travel with my family I'm going to do it.