You won't get a CO with unpermitted work any other way but for very slack areas, which have all tightened up noticeably over the years.

You’re right—commercial lenders are tightening up their guidelines, and it’s becoming harder to find 10% down on jumbo loans, especially with the current market conditions. 

Adjusting some zoning restrictions and streamlining permitting processes to encourage more private development would have a quicker impact.

Here (and I'm assuming in most places), the condo association governs STR restrictions, not the local/county governments.

-Are there legal restrictions on this in NC, such as the length of the option?

Quote from @John Underwood: First thing to do is check with the city or county to make sure the ADU would be permitted to be a STR.The municipality has an application process but initial indication is that it's not overly restrictive in the area I'm looking at. 

My view on median income is that it's going to tighten(wage inflation stays 80% of core inflation, but house prices go down 10-20%, therefore rents can go up a bit) creating a better RTP to invest in RE.

Some areas might have restrictions on renting portions of a home, especially basements.

However, lol, in this last year of the lease he asked if he could get out of lease 4 months early because of financial reasons (IE: job restricted his hours wasn't making the money he used to).

No restrictions or caps on supply, and I don't expect the City to revisit this anytime soon as it was about a 3 year discussion that I think council is happy to put in the rear view mirror.