Good for us (and we have made some significant upgrades), but I'm concerned on maintaining those gains and whether they would wither given the Fed's proposed hikes. 

The Biden Administration has proposed limiting Section 1031 exchange deferral to a maximum of $500,000 (single taxpayer) / $1 million (married taxpayers)

You also must understand that the direct to seller wholesaler does not have buyer or else they would have closed without me and leave my proposal off the table.

Any knowledge of regulations proposed or in effect around STRing an ADU on a property like that?

I would agree with @Will Barnard above in that you need to just go through each proposal and see where you come out on top.

We want to buy a property (old motel to convert to furnished housing) from the city at a discounted price, it was suggested that we submit a redevelopment proposal to the city council.

The proposed ordinance changes by the planning and zoning commission were too strict, and if they were to be adopted I was afraid it would significantly impact our ability to operate as a short term rental.

I question to you would then be do you think your efforts are best spent filing the police report and chasing the tenant or possible spending it speaking with your local and state legislators explaing your situation and helping them to understand the impact of the things they vote on. 

Do you foresee any legislation coming that would prevent STRs in the area?

The landlord may need an attorney if the proposed tenant files a complaint.