I’m licensed in NJ and the practice exams had identical questions to the actual test.

Would love to hear from a tax professional to verify this. 

Verifying last 2 years of rental history very important!

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

As noted above, you need to be mindful of and verify local ordinances when renting by the room.

Is this local ordinance verified by the city and if so, what are the ways around it, like possible SB1033 and condo out the units or something else? 

Instead of relying on anecdotal evidence with your horror story, perhaps do some honest analysis instead.The vast majority of the time a tenant like this will catch up, if the shortfall was caused by a verifiable and temporary issue.

They should perform identically.

@Brandon Stiles the process steps are identical - how you execute them is different.

If your state losses are several hundred dollars or more - then pressure your CPA to verify whether these losses are worth filing current state tax returns.