It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

Many insurance policies also require re-development within two years, a near impossible timeline in a region with the coastal commission, perhaps only second to Manhattan in terms of permitting and red tape.

The city has changed Section 8 requirements multiple times lately.  

These programs offer options for less money down and in some cases DPA - Down payment assistance.As a banker for over 18+ years I am very skeptical when I hear a new name in the business only because its become tougher to lend with all of the new laws and credit/insurance requirements and regulations.  

Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit.

LIHTC properties can have requirements that stay with the property for up to 15 years.

How do you think the 2 relatives will feel about having their rent raised or being required to pay rent period?

Especially in a high interest rate environment where cash flows on long term rentals are muted and there is significant capital required to purchase and list on airbnb.I live near NYC but would invest out of state in an airbnb / landlord friendly state.

You'll need more capital and most will require a personal guarantee and personal financial backing. 

Assuming you don't have a mortgage that requires a certain level of insurance, you can get a stop-loss policy covering all the properties.