On a broader scale, if anything is in my name then if you p*ss off the government or anything like that they can take seize any and all your property in your name. 

In fact, according to a recent study, regulation “imposed by all levels of government accounts for an average of 40.6 % of development costs (NAHB, O’Leary).”

I have mixed feelings about this as I am of the opinion the government is generally not the best at administering things in the free market, however I have seen first hand some slum lording of STR's and unsafe practices.I think for now if you are in those TX markets you will have to play ball but I think they will keep pushing new rules on you until people push back.

I can't find any information on the local government website.

Sure we need more government help  I think you're missing my point.

I know they have regulations but it seems from the government website you can operate in commercial zones (C-2 C-3 C-4 C-5 UGCCC, IX, RF, RV, CX, SH).

Freddie Mac & Fannie Mae multifamily loans essentially offer low rate, high leverage, non-recourse permanent financing options that are backed by the full faith and credit of the United States government.

But city governments, schools, public libraries and first responders could face major budget shortfalls."

There are insurers, re-insurers, as well as government policy etc etc that go into rates. 

I contacted the government (province as they are in charge of this) to ask and was told that I didn't need to pay for the modifications.