I don't think it would make you a bad landlord, it's not bad to pay for accommodations for good tenants, just bad to let bad tenants take advantage of you.  

@Mark Smith I include a specific declaration statement on the lease informing them that our insurance does not cover their belongings, or their accommodations during emergencies.

Yeah Oaks Escrow seems to accommodate =)

Aka Luxury accommodations and Airbnb's typical traveler are not often the same thing.

And of course I made modifications to better suit my wishes, but I left in opportunity to cure, re-inspection criteria, and that landlord will allow for reasonable accommodations (think of visually impaired tenant being unable to see or elderly tenant being unable to perform certain actions).

Meaning you mathematically adjust for the higher overhead costs; if you have a bigger rent payment due at the beginning of the month, then you need to be making more cash flow to accommodate the additional risk.

Our house should accommodate either with plenty of off-street parking, a separate basement entrance, and is an owner-occupied residence for the city STR compliance. 

I think you'd be surprised how much more money a dog owner will pay to make sure their pet has nice accommodations also.

If not, can you up your down to accommodate the commission?

If you plug the numbers into the calculator are you having the rate be refinanced at a half percentage or 1% higher to accommodate for rising rates in the future to make sure the numbers work in the future as well?