What I like is that because his question was not only hard numbers but also interpersonal/relationship values the response is accordingly so.

We have already seen pay-back from this behaviour as one of these local landlords has recently referred a tenant to us.

People that see this as promoting simply are selfconcious and feel threatened and your behaviour is a very typical reaction.

What is the reasoning behind the behaviour?

As we have lawyers involved I will leave them to expose your strange behaviour on this forum.I reiterate my question, when is the more than 20 thousand dollars of rent collected and not paid to clients going to be paid.

It all starts with the type of tenant demographic that your property attracts.Now, the only reasonable thing to do is to set aside some capital for turnover when you find that a tenant is exhibiting that kind of behaviour during your inspections. 

Document the upstairs behaviour in every way you can.

This does not sound like a native OS X behaviour.

I also keep them out of trouble with the law, or at least warn them of what behaviours not to do. 

You will not change their behaviour.