If your actual capital gain (net sales price minus your adjusted cost basis) is going to be larger than $131K, then we can have a conversation about a possible 1031. 

Conversely, the same two-bedroom, one-bath unit could fetch $1600-1700 under a traditional LTR arrangement without furnishing or utilities.Considering the added expenses, the MTR/STR model doesn't seem worth it for me, given the marginal increase in revenue.

I've crossed out all the new projects on the list as well as written 'CSLB $500 labor/materials limit' next to each project he wanted to start that's over that amount- despite our multiple conversations regarding just that.An interesting rather recent article:http://www.cslb.ca.gov/Media_Room/Press_Releases/2..."

Is it fair to assume that the added sqft from the ADU conversion adds value to the property? 

Ask questions and try to engage in as many conversations as possible to gather different opinions before making your own decisions.

You must find people you want to work with and initiate the conversation from your end.

I would try to address it as amicably as possible before doing anything that might turn into a war. both of you can always build a higher fence and mount the cameras on a higher pole. have a conversation with him about your Airbnb, is he doing this simply for security, or does he have an issue with you renting your place out short term?

I had a conversation with them about it and repairs/maintenance are typically when someone is living in the unit and one (1) issue needs to be addressed.

You must start the conversation from your end, because we are prohibited from contacting you first, by Bigger Pockets rules.

Rehearse your approach and conversation so you know when to guide the conversation to a predictable outcome.