The main restriction on using the Section 121 exclusion is the ownership and use test.

Are there STR restrictions in those areas ?

We have a property in prospect heights and ocean hill.

I've personally transacted on a house +ADU + JADU that was rented to three separate tenants.If I am taking the risk of breaking a deed restriction, I expect the associated discount. 

Do you know of any in Scottsdale without minimum rental restrictions?

After 3 or 4 years of the county fighting our neighbor, they passed a very restrictive ordinance that affected both the neighbors property AND our property.  

No slab houses, age restriction too i.e. expectation to be paid in full before retirement.

Or what about the syndicator who did purchase the multi-family building in your narrow investment thesis  and did bet wrong on rates but a major employer just announced significant relocation to the municipality where the apartment building is located or a restrictive zoning overlay was just enacted making it difficult to add new density or maybe its the new commercial development just anounced that is anchored by a wholefoods and exciting nightlife exeriences a block away. 

Avoid The Glen, Indian Creek, Marbach/Lakeland areas, Denver Heights, and some East side areas.

You can get something in the Heights or Montrose, but I would have to ask my 2-4 MF in appreciating market versus 4-5 BR in appreciating markets and renting the rooms out?