These people are also concentrated in major metro areas with lots of red tape on development and limited space to build anything new. 

. --- So, if you're renting out rooms and everyone shares common spaces like the kitchen and living room, you're in the clear of those ADU rules.

But yeah, you lose a lot of usable space inside; most of the ones I saw had essentially a kitchen/living/dining combo downstairs and a loft with 1 or 2 bedrooms upstairs.

Goal for SRO is parking space and no HOAs. 

The property features two 1,400 sq ft suites on the main level (one currently leased) and over 3,000 sq ft on the upper level, with 750 sq ft already occupied, 3 small office spaces (+/- 250 sq ft each), and a basement tenant with 1,400 sq ft of storage space.The building generates $6,000 in monthly gross income from its five tenants, but with full occupancy and market-rate rents, it has the potential to bring in $10,000+ per month.Given its historical significance, stunning architectural details, and location, I’m curious about your opinion: Would this property be more marketable for sale with or without the current tenants?

Also finished the basement which had a good amount of space, adding two bedrooms and moving the laundry to a closet upstairs where it made more sense.

However, the inspector mentioned that the 2nd and 3rd floors are labeled as "Artist Dwellings," though he wasn’t sure what that fully entails.He suggested applying for a special permit to present the space as artist studios or dwellings, with the hope of eventually converting them into long-term rental (LTR) apartments under that designation.

How much of the structural part of the space is covered by the tenant?  

I use mine for storage of beach toys, drying rack for swim suits, storage of extra supplies and on occasion it’s an extra parking space.  

Have friends working in this space along the Columbia River in WA/OR that oversee the data centers, and working with friendly government was key to their growth.